“Using WHAT?!” I know, I know. I lost you with those strange words. And I also know I risk losing you irretrievably if I tell you that Hoshin Kanri is a Six Sigma strategy tool used to ensure the whole company pushes in the same direction. But I’ll take the risk, because the start of a new year is a great time to use Hoshin Kanri for marketing goal setting.
As an endurance athlete, I know that results take time. So, I’m not surprised if my first post on Six Sigma and inbound marketing hasn’t convinced you of the role Six Sigma can play in improving marketing strategy and execution. I respect your skepticism.
So PLEASE STOP READING this article UNLESS any of the following challenges apply to you:
- Communicating how your team supports the company strategy.
- Creating a high performance team.
- Ensuring everyone knows where they stand relative to achieving goals.
- Holding your team accountable for the achievement of targets.
- Fostering innovation at all levels of your team.
Still reading? That’s what I figured.
Hoshin Kanri Background
Hoshin Kanri was developed in Japan as part of the quality effort of the 1950s. Translated literally as “compass management,” it is a process for setting strategic direction that leverages the collective expertise of everyone on a team.
Hoshin Kanri differs from other approaches in two critical ways. First, in Hoshin Kanri, two way communication is key. Top management sets the overall direction, but delegates as much as possible to the front line teams to determine HOW best to achieve the goals. Second, Hoshin Kanri calls for a Plan-Do-Check-Act cycle to regularly measure actual results against the plan, and to take corrective action for root causes.
How to Use Hoshin Kanri for Marketing Goal Setting
Here are five critical steps to using Hoshin Kanri for marketing goal setting.
Step 1: Build the annual strategy & corporate goals
The executive team builds the annual corporate strategy, including SMART goals for the critical few metrics that define corporate success. For B2B software companies, these generally include revenue, new customer acquisition, and new product launch.
Step 2: Cascade the company goals to the departments
Department heads support the corporate strategy by identifying goals for their teams that align directly to the corporate goals. Some departments coordinate to achieve mutual goals, such as marketing and sales for revenue and customer acquisition targets. Bi-directional communication among departments and the executive team solidifies goals and inter-dependencies.
In this step, marketing identifies goals for demand generation, awareness, and sales enablement. For a B2B software company, marketing is normally expected to build pipeline for 15-30% of new revenue. This translates into a goal for number of leads in the marketing funnel, based on average sales price, sales cycle, and historical conversation ratios of marketing programs.
Step 3: Use the team to identify supporting tactics
Here is where Hoshin Kanri really drives innovation through two way communication. With so many variables to consider, the entire B2B marketing team is needed to identify the best tactics to support the goals. Leverage the expertise of those who run the programs, execute SEO and SEM, and build the content and messaging. When complete, the marketing plan identifies tactics, timeframes, projected costs, and expected results for each element.
Step 4: Link achievement of metrics to individual performance
The best way to ensure the marketing team remains focused and aligned is to directly tie achievement of the target metrics to individual team members’ performance. Use the performance management system to tie variable compensation to goal attainment. A combination of shared goals and specific goals ensures the marketing team works together, while each individual strives to hit the numbers for which she is responsible.
Step 5: Measure and adjust regularly
Regular comparison of actual results to plan is a fundamental aspect of Hoshin Kanri. Frequently measure key marketing metrics to determine whether tactics are working as planned. The metrics will vary, but should include both inputs and outputs. Investigate any variance from the plan, and analyze the dependencies between causes and effects. For example, if a webcast didn’t achieve the target audience, was the problem the content, the promotion, or the outreach?
The Benefits of Using Hoshin Kanri for Marketing
Once you get beyond its name, you can see the benefits of using Hoshin Kanri for marketing goal setting. Understanding how marketing contributes to the company goals. Clear focus on achieving targets. Constant analysis of achievement vs plan. Employee engagement in building the plan.
Despite its reputation for being cumbersome and overly techie, Six Sigma has much to offer to marketing. Today’s marketers need to be both creative and analytical. Hoshin Kanri is one tool that can help achieve this balance.
What do you think? Have you used this approach? What was your experience?