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Annual Goal Setting for Enterprises using X-Matrix?

Before I start telling you what an X-Matrix is, let me give you some context. X-Matrix is a very popular visual tool traditionally used by Japanese companies, and now by many world-wide for planning their organization’s strategy. It is part of the approach called Hoshin Kanri (Policy Deployment)

X-Matrix is a one page document that links an organization’s strategies, metrics, tactics, results and responsible people.

Once the 3-5 year strategic objectives of an organization are decided, then the X-Matrix can be used break them down to tactics, metrics, assign responsibilities and track them.

It starts at an organization level where a primary X-matrix is created and for each of the key strategies, if needed, secondary X- matrices are drilled-down.

In my experience X-matrix has been very beneficial for enterprises of all sizes. For large corporations with multiple business lines and products, then I have found there may be multiple X-matrices and that leads to lot of confusion.

One of the biggest benefits of X-matrix is that it acts as a document that forges agreement among all stakeholders on the strategies, tactics and metrics. Hence the ‘catch-ball’ happens when this document is completed. Usually this format is printed in A0 size and used for filling up the different sections.

The second benefit is that it acts as a good communication tool for management to share their plans with rest of the organization. It can be displayed in a common place for employees to see and understand the organization’s priorities

How to fill the X-Matrix?

1. Start with the ‘Strategies’ – Fill in the 3 or 4 broad strategies for the organization for the next 3-5 years.
2. Move to Annual Objectives – List down those objectives which will be accomplish by the team
3. Establish correction between Strategies and Objectives. Link up each of the ‘strategies’ to the ‘objectives’ in the intersection place with cross signs. Some recommend high(H), medium(M) and low(L) to denote the strength of correlation. This exercise can be done by the team through brainstorming or by data collection, if relevant.
4. If there are orphan strategies or objectives, then go back to second 1 and 2 and review them.

Repeat steps 1 to 4 by populating the following one after the other:

• Strategies
• Annual Objectives
• Metrics
• Tactics
• Team members

If you like to know what goes into tactical plans, how metrics are decided and how accountability and targets of metrics and goals are assigned, I’d recommend that you read my articles in ‘Strategy & Hoshin’ section

Accountability is nothing but the correlation of Tactics to Team members This entire exercise involves a lot of concentration and team effort and hence is unlikely to be completed in a single sitting. Many times, the functional heads may require inputs from their team members and hence may need more time.

For best results and especially if you are doing it the first time, I recommend you have an expert run this for you. He can educate the leadership team and at the same time get this important annual goal setting accomplished.