Help Manual


Sigma Magic Help Version 15

Hoshin Analysis


A lot of times companies fail not because of lack of strategy but due to lack of execution. Creating a vision is easy but implementing it is far more difficult. Hoshin Kanri is a strategic planning method derived from the Japanese lean companies that tie execution with strategy. Hoshin matrix is a one-page visual of your objectives, measures and targets, and action items. There are four quadrants in the Hoshin matrix: breakthrough objectives, annual objectives, top-level improvement priorities, and action programs or targets to improve. All four quadrants feed each other and show the alignment between the different elements. This ensures organizational buy-in and hence the chance of success is increased.

Hoshin helps ensure that the organization stays focused and committed to the direction because everyone can see the big picture of how things tie together. It ensures the vision is tied with the selected activities. It ensures that annual goals are clear and helps an organization focus on the vital few instead of focusing on too many projects using a shot-gun approach.

To add this tool your workbook, click on Lean and then select Hoshin Analysis.


Click on Analysis Setup to open the menu options for this tool.


A sample screenshot of the checklist menu is shown below.
Input Dialog
Checklist: The input dialog box asks a set of questions with respect to the Hoshin plan that you are creating. This is just a checklist to ensure that you have thought about all the aspects of creating the Hoshin plan.
  • Ensure that before you create the Hoshin, your vision, mission and values are aligned to your desired state. Since, the starting point of the Hoshin is your mission and vision.
  • After you complete the Hoshin plan, you should ensure that the 3-5 years objectives are really breakthrough objectives. Without a proper stretch target to the organization, you may not be able to achieve all that you can for your organization.
  • In addition to developing breakthrough objectives, they should be realistic as well. If the targets are not practically achievable, then your organization may lose hope and not plan to accomplish those objectives.
  • Ensure that you have properly translated the 3-5 year objectives to your annual objectives. Watch out for the hockey stick type plans where the majority of the objectives are accomplished in the future and not in the immediate future.
  • After the Hoshin plan has been developed at the top level, you will need to cascade it through the lower levels in the organization and they can develop their own Hoshin plans. This will ensure that the entire organization is working towards the same goals.
  • Finally, it is not just about creating the plans. Once you have taken the time to create the plans, you also need to have a regular cadence to review the results and check against the plans so that you can course-correct if required.
View Example: Click on this button to open the example file. You can view the example to get an idea of how to fill out this tool or you can use the example as a starting point and modify it to meet your project needs.
Help Button: Click on this button to open the help file on this topic.
Cancel Button: Click on this button to exit without saving any changes.
OK Button: Click on this button to save changes and update your analysis results.
On the worksheet, you will need to enter the Hoshin plan. This plan should ideally be created by the senior management working closely and ensuring proper inputs and feedback from all team members. The best way to fill out the Hoshin matrix is as follows:
  • First, fill the bottom portion of the Hoshin matrix which lists the major, top-level goals that the senior leadership team has created. This is your 3-5 year strategy and all your annual objectives, targets and actions should be aligned to reach these organizational objectives.
  • Next, you will need to translate the 3-5 year breakthrough objectives to your annual objectives. Hoshin helps you break down big objectives into yearly outcomes for your teams. You will need to think about which of these objectives you will need to accomplish first to meet your targets.
  • Next, fill out the top portion of the worksheet which are your top-level improvement priorities. These make up the high-level to-do list for your team. These are the top-level priorities that your management needs to ensure that the delivery and can be part of their annual incentive reviews.
  • The improvement priorities are measured against the final set of measurable targets to improve. Different teams may have different targets to improve. To ensure organizational focus, only the most important elements should make it to the top-level Hoshin matrix.


If you click on the Verify button, the software will perform some checks on the data you have entered. A sample screenshot of the dialog box is shown in the figure below. Verify The objective of this analysis as well as any checks that are performed is listed in this dialog box. For example, the software may check if you have correctly specified the input options and entered the required data on the worksheet. The results of the analysis checks are listed on the right. If the checks are passed, then they are shown as a green-colored checkmark. If the verification checks fail, then they are shown as a red-colored cross. If the verification checks result in a warning, they are shown in the orange color exclamation mark and finally, any checks that are required to be performed by the user are shown as blue info icons.


Click on Compute Outputs to update the outputs. There are no specific calculations for this tool. If you have answered all the questions in the input dialog in the affirmative, then the Hoshin matrix tool will indicate that the plan is okay. Outputs There are no specific results to interpret. If there are any errors on the Hoshin plan worksheet, they are highlighted so that you can fix these errors. When all the errors have been cleared then an OK text is displayed at the top of the worksheet. The most important output of this exercise is the annual plan that you create with your leadership team with specific measurables and targets to improve which can be rolled out and executed by your team.


Here are a few notes regarding this analysis:
  • In the current tool, the number of rows of data you can enter for each side of the Hoshin matrix is 10. It is intentionally kept small so that you can focus on the most important elements.


Following examples can be found in the Examples folder within the software.
  • Select a department and create a Hoshin plan for that department (Hoshin 1.xlsm).