The Hoshin Kanri X-Matrix By I-nexus

The Hoshin Kanri X-Matrix: The What, How, Why, Benefits and more In today’s world, especially with remote working, organizational alignment and focus and accountability of agreed goals is paramount to success. This blog looks at a superb tool for helping you to achieve both alignment and focus: the Hoshin X Matrix.

Written by: Carolyn Gibson, Senior Strategy Advisor

In my previous blog, What is Hoshin Kanri, I explained how Hoshin Kanri (sometimes called Policy Deployment) helps organizations to construct, deploy and deliver on their strategic goals.

The X-Matrix is Hoshin Kanri’s powerful visualization aid that is used to manage the detailed strategic planning. It has many similarities with other strategy planning tools such as the Balanced Scorecard, OKRs and OGSM. However, the X-Matrix has several key differences that make it head and shoulders above the rest in terms of building alignment, accountability and focus. If you are now wondering why, read on.

What is an X-Matrix?

A typical X-Matrix (sometimes simply known as a Hoshin Matrix), as pictured below, is traditionally stored in an Excel file or printed on an A3 piece of paper.

To someone who has never seen an X-Matrix before, it can look complex.

However, it has a simple but powerful underlying structure - what is called a rhetorical wheel.

It unfolds around a point in the center of the square, where the company’s vision is displayed.

It then moves South and clockwise: from your vision, to your three-year objectives, to your one-year objectives, to your next quarter’s priorities or goals.

It has containers for all the elements necessary to plan your strategy, including, on the East face, how the priorities will be measured, and who will be accountable for their achievement.

How to build your X-Matrix

Building the X-Matrix requires both lateral and vertical thinking, both creative brainstorming and logical deduction.

Breakthrough Objectives and the South Face

With an eye on the vision, the management team considers various Breakthrough Objectives (what the company not just wants but needs to do in the next three years to achieve its vision) but must then select only three to place on the South Face.

Annual Objectives and the West Face

The team then brainstorms and debates which Annual Objectives will make the difference or not between success and failure of each Breakthrough, and places just three per Breakthrough on the West Face.

Priorities and the North Face

Often at this point functional leaders and other key team members are brought together to brainstorm and determine the key priorities in the next 100 days to achieve the Annual Objectives - and to agree how success will be measured and who will be accountable.

These are put on the North Face, with the measures and accountable owners on the East Face.

Interdependencies, Catchball and Evolution

In each corner - Southwest, Northwest and Northeast, dots are placed in the intersections to show the causal links and relationships between the strategic elements.

The creative process is in collectively, as a team, adding and subtracting the different elements, within the limitations of the diagram.

Hoshin relies on this process, called catchball, to fully explore potential objectives, detail what each means in terms of measures and actions, and then make the hard decision to select or amend only the ones that are most likely to drive the vision forwards.

Adding, detailing, amending and subtracting elements reveals the strategy over the course of the planning process.

The benefits of using the X-Matrix for strategic planning

The X-Matrix has some powerful features that other strategy planning and deployment tools such as A3s and value stream maps do not: •

It forces your organization to focus on a small number of goals: choosing what not to do is crucial, meaning that priorities are set and resources will be maximized

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Using catchball, it creates both organizational alignment around and individual accountability for those choices

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It shows the clear linkage from vision through to the next quarter’s goals (“improvement priorities”) and, once again, means that any disconnects can be easily identified and goals or projects questioned based on whether they truly support the strategy

•

By asking for the clear measurement of success, it forces people to describe and create SMART goals.

As a result, it forces you to ensure your journey towards your vision is supported by focused activity this quarter, and that all activity this quarter is supportive of your vision.

Any other activity (e.g. those ubiquitous pet projects) must be shelved or killed.

Warning: 3 things the X-Matrix doesn’t help you do

The X-Matrix is a planning tool, but time and time again I have seen it used for other purposes to which it is less well-suited. Please be warned that: 1. The X-Matrix is NOT a communications tool

The average person in the organization does not want to have to look round and round the X-Matrix to find his or her goal or activity for the quarter.

2. The X-Matrix is NOT a performance management tool Good performance management requires tracking progress over time, and there is no space for that on the X-Matrix.

Hoshin Kanri has other tools available for Strategy Execution which I will introduce in upcoming blogs.

3. The X-Matrix is NOT suitable for tracking business as usual or Continuous Improvement activities It is for managing major strategic initiatives.

It is perfectly reasonable that each area of the business has key improvements it wants to make, regulatory requirements to meet, and other daily work to deliver.

All of these are important to the day to day running of the business, but they do not need to appear on the X-Matrix, they can indeed appear in a Bowling Chart / Targets To Improve dashboard.

Common challenges with a traditional Hoshin Matrix execution The process is designed to ensure the right people are engaged at the right time to make the right choices. It is resource intensive by design, creating commitment and alignment.

When executing the Hoshin X-Matrix using traditional tools such as Excel or A3 paper, you typically face challenges such as: •

Some companies require visibility of Breakthrough targets on their X-Matrix.

In a static Excel X-Matrix, it becomes near impossible to visualize the breakthrough targets, and cascaded annual targets without conflating both the objectives and the targets.

•

For large organizations it can be difficult to visualize the overlap of activities between different business areas, meaning that gaps in the strategy are easily missed

Be sure to download our X-Matrix template and how-to guide for more challenges to be wary of.

X-Matrix Excel Templates and Software

Due to its format, the X-Matrix can be awkward to manage and display in Excel, although it can be done.

For a detailed guide on how to create an X Matrix in Excel, and accompanying template, be sure to download our Hoshin X-Matrix pack: