Methodologies – Hoshinplan blog

How transparency increases happiness

Transparency is an easy word to say… “transparency” always sounds good in meetings or company retreats…

“We must be transparent, we do not have anything to hide….”

But….. as many things in the real world, being transparent is harder than saying it. Only a few companies achieve transparency, and always after a period of hard work.

However, I’m 100% sure that transparency increases happiness in companies, and, as you’ll see in this post, it is also a potent tool to achieve better results.

Let’s start from the beginning…

How to be a transparent business

If you want to build a transparent business, you first need transparent people.

The only way to have a transparent team is as a leader to intentionally manifest transparency as a principle, and encourage your team members to always be transparent.

When people in your organization are transparent, then the company is ready to follow the same path.

If you’re asking yourself how to de transparent… there are many ways.

Outside the doors:

● Be transparent about your failures and successes: blog about your business mistakes and successes.
● Be transparent on social media: share your history and day to day life.
● Be transparent about unsatisfied customers: don’t try to hide angry customers, deal with them in an open and transparent way.
● Be transparent about changes: be upfront about why you’re changing your business model, your prices, your products or anything else.
● …

Inside the doors:

● Communicate company strategy at all levels.
● Build consensus around the best approach for achieving company objectives.
● Improve communication at all levels.
● …

Transparency can make a deep impact on any business. But its main benefit is that it helps you, your clients and your team be happier, and do best business.

Why should my business be transparent

Your business should be transparent simply because, as a society, we like transparent people and transparent companies.

We are not talking about a new cool tactic. We are talking about a common sense strategy: being a real person building a real company.

Transparency is now the queen, privacy belongs to the past….

People trust companies that are transparent

The best way to build trust is to be transparent as a person and also as a company. If you disclose information, share everything and open your doors, it’s because you have nothing to hide.

If you have nothing to hide, you’ll be trusted anywhere. Transparency engenders trust in your customers, employees and suppliers.
Transparent companies achieve better results

Transparency leads to deeper relationships between all the agents involved (employees, suppliers, customers …). And that’s the way to also achieve better results. As you’ll see in the example below.

Example

There are multiple examples of “outside” transparency, see Buffer’s transparency dashboard for an example.

Finding “inside” transparency examples is not always as easy. Let’s see one:

Transparency must start at the top of the company and be extended through the hierarchy. Albert Armengol, the Doctoralia CEO, knows this to be the case and that’s the reason why he implemented Hoshin planning about a year ago in his company.

Now, with Hoshin planning, all the team members have the information at their fingertips. Strategy is open, Doctoralia is transparent and anyone on Doctoralia’s team is able to answer:

• What are the goals of the company?
• What are you doing right now to help in achieving them?

Thanks to transparency, Doctoralia achieved better results than ever and was acquired some months ago by DocPlanner.

You can read the full story about Hoshin planning implementation on Doctoralia here: “Doctoralia and Hoshinplan”.

Conclusion

When companies are transparent with employees, providers and customers… they are able to build trust and improve their internal processes.

As a result, employee happiness and customer satisfaction increases and that leads to better results.

So let’s do it, let’s be the happiest we can be with transparency.

P.s. If you liked this post, then two things come next:

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How to complete my lean canvas: step by step

If you are reading this post, it means you have taken the first step towards creating a blueprint for your business. It’s great!

However, I’ve seen many people get this far and then do nothing.

Don’t be one of them.

The top two reasons people often cite for not completing their canvases are:

I was too busy.
I needed more information/help.

Let me tell you something about it…

1. I’m too busy to complete my lean canvas

I see…. so you have time to watch “Game of Thrones” but have no time to build your canvas and take your business to the next level…. Ummm…. really? 😉

Don’t worry, you have enough time to watch series and complete your canvas because it’s super fast to create. Believe me.

If you spend over 20 minutes creating your first canvas, you are probably doing it wrong.

The goal isn’t perfection! Yes, you heard me correctly. The goal is taking a snapshot of your idea. Nothing more than this.

You’ll have lots of time to revisit and refine from the first version.

2. Need help to complete my lean canvas

Perfect! Here we are to help with it 🙂

Let’s look at every single part of the lean canvas and go step by step. This is the lean canvas model by Ash Maurya:

How to complete my lean canvas

As you can see, there’s a clear delineation down the middle, on product versus market and a brief description of each block.

Let’s see how to think/validate each block in the order that Ash Maurya recommends:

1. Problem:

Add a short description of the top 3 problems you want to solve.

2. Customer Segments:

Who are the customers/users of this product/service? Can they be segmented into little segments? For example, amateur bloggers and pro bloggers.

Note: If you have multiple target customers, for example, business owners and bloggers, create a separate canvas for each one.

3. Unique Value Proposition:

What is the primary reason you are different? What is the reason your users/customers will appreciate it?

4. Solution:

What is the minimum viable product (MVP) that demonstrates the unique value proposition?

5. Key Activity:

Describe the key action that will lead users to revenue or retention.

In Hoshinplan, our key activity is “invite collaborators”. If one of our users invite their teammates, we are on the right path.

6. Channels:

List the channels you can use to reach your customer.

7. Cost Structure:

List all your costs: fixed and variable ones.

8. Revenue Streams:

Identify your revenue model – subscription, ads, freemium, etc. and outline your back-of-the-envelope assumptions for lifetime value, gross margin, break-even point, etc.

9. Unfair Advantage:

This is the hardest one to fill correctly. Most founders list things as competitive advantages that really aren’t.

The unfair Advantage is something that cannot be copied or bought.

You may think about how you can make yourself different and make your difference matter at the same time. It’s not easy to find.

So that’s it. You got it! Follow the steps and go ahead with your lean canvas. You only need 20 minutes (half of a Game of Thrones episode…).

P.s. If you liked this post, then two things come next:

1) Leave a comment and tell me if you’ve done your canvas. We love comments!

2) Tell a friend, your Twitter followers or your Facebook network about this blog 🙂

Why Hoshin planning is not only for startups

When it comes to talk about Hoshin Kanri, many people think it’s only a lean methodology for start-ups…

Ummmm… wrong…. this is not true.

The thing is:

Start-ups want to validate a business model.
Companies want to be more profitable.

So… both need to have their teams working aligned with strategy to achieve strategic goals and…

… here is when Hoshin planning does the magic!

But, let’s start from the beginning…

What is Hoshin Kanri?

Hoshin Kanri is a planning methodology that aligns the strategic company goals with the work performed by the whole team.

This methodology was created by Yoji Akao in the early sixties in Japan, so it existed 40 years before start-ups even appeared.

You can read our previous post entitled “What is Hoshin Kanri” to get more information about this methodology.

Why is it so cool?

Using Hoshin planning you’ll be sure that everybody is working in the same direction at the same time. It sounds good doesn’t it?

The reason is that with Hoshin Kanri, the strategic goals of a company drive real progress and actions at every level in the organization. And the waste that comes from inconsistent direction and poor communication gets eliminated.

I’m sure you’ve started loving it. But you’ll be totally in love at the end of the post. Keep on reading!

Hoshin in start-ups

Although Hoshin planning was not created especially for start-ups, it’s a lean methodology that has the properties to be very useful in the early stages of a company.

Why? Because a start-up needs to have the whole team focused on a one main goal: validate a business model and pivot fast when is required.

If you are building a company and want to have everybody doing the right stuff, build a Hoshinplan.com and share it with the team weekly. Albert Feliu. CEO Appszoom

So, if you want to succeed with your start-up I suggest you to start using Hoshins!

Hoshin planning in companies

As I’ve mentioned, Hoshin planning is the best way to have your whole time aligned and focused on your strategic goals, but it also has other benefits….

Let us take a look at its principles:

The strategic plan becomes focused on the things that really matter, on the main goals of your company.
Catchball: in Hoshin planning, workable plans are built through consensus between all the people involved in the project.
Progress is measured with KPIs (Key Performance Indicators).
Regular meetings are the key to keep progress on track and iterate if required.

Unless structure follows strategy, inefficiency results. Alfred Chandler.

Be Hoshin my friend

So whether you have a start-up or a company with a validated business model, Hoshin planning is the best way to be sure that all your staff is working in the same way, with the same goal.

Hoshin planning will drive your company and your internal organization to the next level.

So, do not waste your time and efforts, be Hoshin my friend 😉

P.s. If you liked this post, then two things come next:

1) Leave a comment and tell me if you are planning to use Hoshin Kanri. We love comments!
2) Tell a friend, your Twitter followers, or your Facebook network about this blog 🙂

Best lean quotes ever

Hi there,

Apply lean methodologies to your business is a long run, not a sprint…. so… you must still motivated for a long time.

Although results will probably help you stay focused and keep going, there will be for sure some bad days….

When they come, look to these lean quotes and inspire you soul to keep on the path.

(if you have a favorite quote about lean that it is not included, please comment the post with the quote and we will add it).

Best lean quotes

There is nothing so useless as doing efficiently that which should not be done at all. ~Peter Drucker
The world we have created is a product of our thinking; it cannot be changed without changing our thinking. ~Albert Einstein
If you don’t know where you are going, you will probably end up somewhere else. ~Lawrence J. Peter
Improvement usually means doing something that we have never done before. ~Shigeo Shingo
If you do not know how to ask the right question, you discover nothing. ~W. Edwards Deming
Not everything that can be counted counts, and not everything that counts can be counted. ~William Bruce Cameron
An environment where people have to think brings with it wisdom, and this wisdom brings with it kaizen [continuous improvement]. ~Teruyuki Minoura
Who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery. ~Harold Wilson
What gets measured, gets managed. ~Peter Drucker
The price of light is less than the cost of darkness. ~Arthur Nielsen
You must have long-range goals to keep you from being frustrated by short-range failures. ~Charles C. Noble
Never confuse movement with action. ~Ernest Hemingway
A bad system will beat a good person every time. ~W. Edwards Deming
When solving problems, dig at the roots instead of just hacking at the leaves. ~Anthony J. D’Angelo, The College Blue Book
Don’t tell people how to do things, tell them what you need done and let them surprise you with their results. ~ General George Patton
Success is not checking a box. Success is having an impact. If you complete all tasks and nothing ever gets better, that’s not success. ~Christina Wodtke
Add your favorite quote here. Let us know on the comments below 😉

P.s. If you liked this post, then two things come next:

1) Leave a comment and tell us another lean quotes. We will add it at the list!
2) Tell a friend, your Twitter followers, or your Facebook network about this blog 🙂

What is Hoshin Kanri?

It’s possible that you’ve heard about Hoshin Kanri as one of the lean methodologies used in start-ups and successful companies but…..

… you don’t know how to use Hoshin Kanri in your business… and you are not 100% sure if it can be helpful….

ok, that’s fine, you need more information so…. let’s learn more about Hoshin Kanri and how to implement it.

I’m sure that you’ll love it as much as we do.

Are you ready? Let’s go!

What is Hoshin Kanri?

Hoshin Kanri is a Japanese strategic planning process that aligns 3 different things:

The strategic company goals.
The plans of middle management.
The work performed by the whole team.

With one main goal: to ensure that every single person in the company is working in the same direction at the same time.

By using Hoshin Kanri:

The strategic goals of a company drive real progress and actions at every level in the organization.
The waste that comes from inconsistent direction and poor communication gets eliminated.

Hoshin Kanri creates a natural flow of information that runs through the entire company: goals, results and KPIs travel from the top down and from the bottom up.

How to implement Hoshin Kanri in my company

Well, if you are still reading, you’re on the right path 😉

But let’s see how you can implement Hoshin Kanri in your company step by step:

Step One – Create a Strategic Plan

The first step is to build the strategic plan. Here are some tips to create one:

Five goals, not more: Focus on a small number of goals (five or less) as that makes it far more likely that you will achieve them successfully, rather than waste your resources and energy on dozens … if everything is important; nothing is important.
Every goal must have an owner: Every goal should have an owner/coach with the skills and authority to monitor the goal until the end.
Revolution & Evolution: goals can be evolutionary (incremental goals achieved with continuous improvement) or revolutionary. Both are important for improvements.
Effectiveness First: strategic goals must be effective: do the right things to bring the company to the next level.
Right KPIs: Key Performance Indicators (KPI) are important for tracking your progress so… choose them carefully!
Consensus: consensus between the different actors is very useful because it creates a sense of shared responsibility for the plan and significantly more buy-in from everybody. It also provides another perspective and feedback that helps to build more informed strategies.

Building your lean canvas can be very helpful for building your strategic plan. See our post about “How to create my lean canvas step by step” and learn how to do it.

Step Two – Develop Tactics

Tactics must be developed to achieve the goals defined in the strategic plan. It is at this point that the process of “catchballs” begins.

A process of back and forth exchange between all management members to be sure that:

The strategy and goals are well understood.
There is great alignment between tactics and strategy.
The KPIs are the correct ones.
The purpose for the catchballs is to build consensus around the best approach for achieving an objective.
Catchballs help develop the cascade of subordinate objectives because it’s a back and forth exchange of information between the people who will be most influential in achieving the goals, and the people who are responsible for achieving them.

Using catchballs is also helpful to get a higher degree of commitment for achieving the objectives.

Step three – Communicate the plan

If you want to achieve your goals, everyone involved must be informed, particularly the people who will be implementing the plan and working on its various objectives and tactics. They have the key to the success of the plan.

Yes, you may think this is obvious but only a few companies spend the time and effort to do it properly. Communication must be a continuing activity to keep everyone on track and involved in any changes to the plan.

A Flat Management Structure is better for Hoshin: the fewer levels there are, the easier it is to cascade goals down. And the fewer opportunities there are for strategy to be lost in several hierarchical levels.

Step Four – Take Action

This is the step where goals and plans are transformed into results, where real action occurs.

Therefore, managers should stay closely connected to the activities and catchballs between the people involved to ensure that activities are aligned with tactics and strategy.

Step five – Review and Adjust

As part of regular management meetings, you must monitor the plan and be prepared to act when the plan starts deviating from the path.

Progress should be tracked continuously at regular meetings (monthly for example). These progress checkpoints provide an opportunity for tactics adjustment and their associated operational actions.

That’s the way to be sure that the planned activities are occurring as described, to identify cause analysis and take corrective actions when necessary.

These 5 steps seem simple and a thing of common sense, but they make the difference between success and failure in Hoshin planning. Do not taken them for granted because it will be a big mistake.

Why Hoshin planning

People perform best when they have a purpose: when they understand what to do and why it’s so important.

Hoshin planning can help to create that purpose, providing focus and drive your team towards specific goals. It is the best way to create a shared vision of the strategic plan (the destination) and the associated tactics to get there.

Make sure as many team members as possible have the opportunity to understand why the strategic goals are so important and how the tactics and operational details can help to achieve them.

Hoshin Kanri is an extremely valuable lean tool and your company can benefit from its principles:

Strategic planning focused on the things that really matter.
Catchball: building workable plans through consensus.
Measuring progress with KPIs that will drive the desired behaviour.
Using regular meetings to keep progress on track.

So…. what are you waiting for? Are you ready? Start your free trial in Hoshinplan and discover the best tool for lean your company.

P.s. If you liked this post, then two things come next:

1) Leave a comment and tell me if you are planning to use Hoshin Kanri. We love comments!
2) Tell a friend, your Twitter followers, or your Facebook network about this blog 🙂

How Darth Vader could have conquered the galaxy with Hoshinplan

This morning I was reading an article on Forbes entitled “Five Leadership Mistakes Of The Galactic Empire” by Alex Knapp.

Even though the article has some criticism from the Star Wars fanatics for not being strict enough with the original plot I thought it taught a couple of good lessons about bad leadership. And not only that, I realized that the Hoshin Kanri method and the Lean philosophy can actually be used to overcome them.

Let’s review how to overcome each mistake.

Mistake #1: Building an organization around particular people, rather than institutions

Knapp states that the biggest mistake of the Galactic Empire was to focus in preserving all the power for the Emperor and a few of his chosen lackeys. They disband the Galactic Senate in A New Hope and in the Return of the Jedi the Emperor’s only advisor is Darth Vader.

Knapp also highlights the complete distrust he has in his organization, as the only successor he considers is Luke Skywalker, a key individual from a rival organization.

Solution #1: Have a transparent plan

In the Hoshin Kanri methodology one of the key aspects is transparency. Everyone should know the plan, not only the top management. In the Galactic Empire example losing a few key individuals such as the Emperor and Darth Vader was enough to (almost) eliminate the entire organization as no one else was able to continue their plans.

The solution is to move from telling your teams what to do to explaining the whole strategy and making sure that everyone sees how their work contributes to the achievement of the overall goals.

At Hoshinplan you can create an overall plan, as well as some children plans linked to that. In this way, no matter how big your organization is, everyone can trace back from their specific tasks to the overall long-term objectives for the company.

This strong alignment of everyone’s work to the whole strategy and the complete transparency of the overall plan minimizes the risk of failing due to losing an individual.

Mistake #2: Depriving people of the chance to have a stake in the organization

Forbes’ article continues by noting that by consolidating his power, the Emperor also deprived his employees from a key motivation: the feeling of contributing to the success of the organization.

They removed the idea of democracy by disbanding the Galactic Senate. And they also eliminated any guiding ideology by forbidding any reference to the Force.

Solution #2: Involve everyone in the creation of the plan

Not only the plan should be completely transparent, but everyone should also have contributed to it. In the Hoshin Kanri methodology, the process starts with a strategic plan crafted by the top management (e.g. conquer the galaxy by building a Death Star), but then all the levels of the organization contribute to the plan in a process called “catch-ball”.

This is a back and forth exchange with top management to make sure that everyone understands the strategy and goals, that the plans of every department have a strong alignment with the global strategy, that the indicators are appropriate and at the end, that everyone believe that their plans are achievable.

Having everyone involved in the plan creation and ensuring that all the objectives are agreed upon between the managers, and the people that will work to achieve them, increases people’s motivation and commitment to the plan; therefore, maximizing the chances of success.

Mistake #3: Having no tolerance for failure

Not once does Darth Vader use the Force to choke to death some of his employees when they make mistakes. I have to admit some of these mistakes are huge ones.

At the beginning of The Empire Strikes Back, imperials try to eliminate the rebels in that have concentrated in planet Hoth. Admiral Ozzel brings the Imperial Fleet too close to Hoth, allowing the Rebel Alliance to detect them; thus, quickly beginning its defense, frustrating the attack.

Even though this is clearly a big mistake, by choking him, Vader kills innovation, participation and improvisation. No one would dare to think big and take risks if the result in case of not achieving the objectives is being choked to death.

Solution #3: Objectives should be a guide not a performance management tool

Hoshin is a Japanese word that can be decomposed in two words: Ho and Shin. The first word, Ho, means direction and Shin means needle. Thus, Hoshin is a needle to point the direction or a compass. It is not meant to be used to judge, praise or punish individuals, but to make sure all the efforts in the organization are aligned.

If in the above mentioned “catch-ball” process, where the indicators’ target values are to be agreed between the managers and the employees, the result of not achieving them would be to be choked to death (or to be paid less); the employees would never agree to have ambitious goals; thus, leading to lower performance.

Target values are to be used to learn. If a target value is not reached, it means one or more of the hypotheses used to set that value were wrong, and they should be reviewed, leading to a higher understanding of the current market situation and the company’s capabilities.

Mistake #4: Focusing all of the organization’s efforts into a single goal and failing to consider alternatives

Again citing Knapp’s article: “When it came to the success of the Galactic Empire, the Emperor had one single idea that he was absolutely obsessed with: building the Death Star. […] This single minded obsession with one way to succeed is something that undermined not only the Galactic Empire, but also many other organizations throughout history”.

Solution #4: Divide your plan into areas, objectives and indicators

A Hoshin plan is divided into strategic areas, making it easier to cover all the aspects of your strategy. Even though building a Death Star might be a key objective one should not forget about all the other aspects of the organization.

The Emperor and Vader could have created an area for “Planet Destruction” or “Fear” where the task of building a Death Star would have been top priority but they could have also created areas for “Team morale”, “Intelligence” or “Innovation”.

By covering different strategic areas, Hoshin avoids the temptation of obsessing with a single task and neglecting some other aspects that may be paramount for your success.

Mistake #5: Failing to learn from mistakes

The Galactic Empire devoted a huge amount of time, money and effort to build the first Death Star, only to have it destroyed by the rebels just after its first mission – blowing up Alderaan.

After such an enormous failure the only response of the top management of the Empire was to start building a newer, bigger Death Star to be the new target of the Rebel Alliance. In the second case, the Death Star wasn’t even completed before the Rebels managed to destroy it again.

Another example according to the Forbes article: As we mentioned in Mistake #3, Vader Force choked Admiral Ozzel, in the hope that this punishment would serve as an example for the rest of his employees, leading to a performance improvement.

Soon after that, captain Needa failed to capture the Millennium Falcon and Vader Force choked him again. It’s unclear that this fear-based method had a positive effect on employees’ performance yet Vader continued to use it anyways.

Solution #5: Make continuous improvement a habit

Another key aspect of the Hoshin Kanri is continuous improvement. Progress should be tracked continuously and reviewed on a regular basis (e.g. monthly).

These checkpoints should be used to adjust the plan. In a Hoshinplan you could create new tasks that were previously undetected or delete tasks that no longer make sense.

Additionally, you should also review the indicators’ target values to incorporate new learnings as discussed in Solution #3. At my former company (InfoJobs), we presented the progress to the whole company once a month and made a deep review of the plan each quarter.

A Hoshin plan should be a live plan adapting to the circumstances. When the first Death Star was destroyed, the plan should be have been reviewed, alternatives should have been considered and maybe a better solution would have come up rather than building another even bigger Death Star.

Luckily for the Rebel Alliance nor the Emperor or Vader discovered Hoshin Kanri. 🙂

Want to conquer the galaxy? Start using Hoshinplan today.