This blog will wrap up the discussion on deployment frameworks but not on the entire deployment phase. I'll open it again with the usual background information.
Let’s examine how a fictional company, Concentric Circle Corp (CCC), a mid-sized technology firm looking to scale its business, can use Balanced Scorecards, OKRs, or Hoshin Kanri to Drive Success.
One of the first steps to successfully executing a strategy is selecting the correct short-term goals and having a concise and understandable tool to share progress with the organization. In this regard, every company, whether a startup, SMB, or established enterprise, needs a clear and focused strategy deployment framework. Without one, even the best-laid strategies fall apart in execution.
At CCC, the leadership team has established three key short-term goals for the upcoming year, all in line with the company’s BHAG and supporting strategy.
Sales Growth: Improve customer acquisition and retention to increase revenue by 15% while maintaining profitability. In parallel, they will also identify and complete due diligence on two acquisition targets, at least one of which is in a new vertical where CCC does not currently compete.
Technology Innovation: Upgrade internal and external systems to enhance efficiency, application performance, readiness for advanced AI applications, and data security.
People Development: Launch a leadership training program to develop future company leaders to support best-in-class employees at all levels.
Setting goals is one thing—tracking, measuring, and achieving them is another. To ensure alignment and execution, CCC is evaluating three popular strategy deployment frameworks:
3. Hoshin Kanri (Policy Deployment)
Hoshin Kanri, or Policy Deployment, originated in Japan in the 1950s and 1960s as part of Total Quality Management (TQM) practices. It was influenced by management principles from Dr. Deming and later refined by companies like Bridgestone Tires and Toyota. It was Bridgestone who coined the term in the 1960s.
Hoshin Kanri is a structured approach that ensures the top-down alignment of goals. It is commonly represented through the X-Matrix, a visual roadmap for goal deployment.
The elements in an X-Matrix are typically:
Strategic Goals (Why): Align with the organization's long-term vision.
Annual Objectives (What): Translate into measurable goals.
Improvement Priorities (How): Define actionable steps to achieve objectives.
Metrics to Improve (Measure): Track success through quantifiable indicators.
Departmental Goals: Ensure alignment across teams and individuals.
How CCC could use Hoshin Kanri:
1. Sales Growth
Strategic Goal: "Specific set of market and segment choices"
Annual Objectives (Top-Level Objectives):
Achieve 15% revenue growth while maintaining a net profit margin above X%.
Increase customer retention rate by X% through improved engagement strategies.
Identify and complete due diligence on two acquisition targets, one in a new vertical.
Top-Level Improvement Priorities:
Enhance customer acquisition by refining marketing strategies and targeting new markets.
Expand customer loyalty programs to improve retention.
Build a cross-functional M&A team to evaluate acquisition targets.
Develop an integration plan for new acquisitions.
Key Metrics to Improve:
Revenue growth: +15%.
Customer retention rate: Increase by X%.
Lead conversion rate: Improve by X%.
Acquisition due diligence completion: 100% (for two targets).
Cascaded Goals (By Department):
Sales & Marketing: Increase lead generation and conversion rates by X%. Expand digital campaigns to target untapped customer segments.
Finance: Develop financial models and profitability analysis for acquisition targets. Ensure resources for M&A processes.
Operations: Create a framework to integrate acquired businesses within X months of closure.
M&A: Identify and evaluate two acquisition targets. Conduct due diligence and make strategic recommendations.
2. Technology Innovation
Strategic Goal: "Become the premium, best-in-class provider for speed, reliability and offerings in our industry."
Annual Objectives (Top-Level Objectives):
Replace outdated systems to improve operational efficiency by X%.
Ensure all critical applications are AI-ready by year-end.
Enhance cybersecurity measures to reduce security risks by X%.
Top-Level Improvement Priorities:
Upgrade the internal CRM system to improve customer service and sales efficiency.
Implement an AI-readiness roadmap and integrate AI-enhanced tools into operations.
Implement advanced data protection measures based on security audit findings.
Optimize IT infrastructure to reduce downtime and improve performance.
Key Metrics to Improve:
IT downtime: Reduce by X%.
CRM efficiency: Improve sales/service response times by X%.
AI tool implementation: At least one tool is operational.
Cybersecurity risk reduction: X% reduction.
Cascaded Goals (By Department):
IT: Replace CRM and upgrade infrastructure to reduce downtime by X%.
Operations: Implement AI-powered tools to improve workflow automation.
Cybersecurity: Conduct quarterly security audits and deploy new security protocols.
HR: Provide training for employees on new AI tools and systems.
3. People Development
Strategic Goal: "Maintain, retain, and develop leading experts in their respective domains."
Annual Objectives (Top-Level Objectives):
Design and launch a leadership training curriculum.
Enroll the first cohort of high-potential employees in the program.
Establish a mentorship program with senior leaders for ongoing development.
Top-Level Improvement Priorities:
Finalize the program structure, including modules, timelines, and outcomes.
Partner with external training providers to enhance program quality.
Establish criteria to identify high-potential employees for enrollment.
Implement mentorship matching and evaluation processes.
Key Metrics to Improve:
Leadership training program launch: Complete by [specific date].
First cohort enrollment: X employees.
Training completion rate: X%.
Leadership competency improvement: Increase by X% (measured through 360° feedback).
Mentorship participation: Pair X% of participants with mentors.
Cascaded Goals (By Department):
HR: Finalize program design, identify participants, and oversee enrollment and tracking.
Leadership team: Serve as mentors and provide feedback to participants.
Operations: Coordinate schedules to ensure minimal disruption to workflows during training.
IT: Support program delivery through a learning management system (LMS).
Below is an example of what an X-Matrix would resemble with the above elements.
Pros of Hoshin Kanri:
✔️Ensures company-wide alignment of goals.
✔️Encourages structured problem-solving.
✔️Displays clear ownership.
✔️Useful for companies with multi-year strategic objectives.
Cons of Hoshin Kanri:
❌Can be too rigid for fast-changing industries.
❌Requires strong leadership and buy-in at all levels.
As you can see, this matrix contains a lot of information. While many view the cohesive cascading of goals to KPIs as an advantage, others can be overwhelmed by all the information. I’ve seen leaders remove themselves (even subconsciously) from this process as they found it too daunting. Tread carefully, though, and realize it is a powerful tool.
Which Framework is Right for CCC?
I dislike these questions - even more when no clear answer is given. So, I will go out on a limb.
I've seen the best results using a BSC at a company level and OKRs at department levels. Why? The ability to control the number of priorities and the holistic view a BSC offers at a company level combine nicely with the strength of detail and cadence that OKRs offer.
I can say this more comparatively. If CCC values simplicity and agility, OKRs might be the best fit. If they want a holistic tracking system, BSC could work well. If they require tight alignment across all levels, Hoshin Kanri is the way to go. My experience with the latter is that it can tend to overwhelm people who are uncomfortable and unfamiliar with the approach. For CCC, based on its size and maturity, I would initially lean towards OKRs as the more straightforward framework and only bring in something complementary in successive years if more traction is needed or more value can be provided.
That might not be the answer you’re looking for, but all frameworks can help you deploy and accomplish your goals. And speaking of frameworks, you don't need to focus solely on these three, although they are amongst the most popular. Other frameworks exist (4DX and OSGM, to name two).
The final key takeaway? The best framework is the one that fits your company’s culture and execution style. Don't overlook these crucial aspects of deployment.
Up next on deployment, we will discuss how to communicate the goals across the organization to achieve success.
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