Karma counts for top dog Toyota


Business – theage.com.au

Are you sick of reading about Toyota's success? I'm not.

This reporter does a pretty good job of capturing the main points of the Toyota Production System.

“… if they [visitors to the factory] are looking for Toyota's secret on the factory floor, rival car makers might be looking in the wrong place. Toyota's success is the result of management processes and culture rather than the operators' instructions hanging from every work station.”

Another amplification of the Toyota definition of lean that Norm Bodek has helped spread.

“Toyota revolves around two things. The first is ‘keizan' — continuous improvement,” said John Conomos, Toyota Australia's outgoing executive chairman.

“The second is respect for people, and not just the customer alone. Respect for the affiliate, for every supplier, even down to the competition.”

It might sound like industrial nirvana, but Mr Conomos says Toyota goes to “immense lengths” to avoid firing employees. “If the company gets into trouble, rather than fire people, you look at what management went wrong, then you move the management out and bring in people that can make it work,” Mr Conomos said.

“Don't fire, fix. Relocate, educate and improve,” he said, as though it were a company mantra.

I'm going to post a link soon to an article about the military-style rule at the Home Depot, where the mantra seems to be “fire, fire, fire” if you're not making the numbers. Keep an eye out for this article.

Here is a great example of Deming's “constancy of purpose” idea. Each time Toyota management changes, they aren't expected to radically change things or to put their own mark on things, as U.S. executives tend to do, even when they're taking over a successful company.

“The board (of directors) changes every year. Last year, on June 23, the entire EVP (executive vice-president) structure, and the president and the chairman, changed in a pre-determined rotation.

“There was no shock to the organisation,” Mr Conomos said. “People didn't wonder what the hell these new people were going to do. The sharemarket didn't go into spasm. The suppliers were not shocked.”

It sounds like a production line for executives — a stultifying process that could lead to more of the same thinking. Mr Conomos dismisses the suggestion.

“It still provides the opportunity for innovation, and stimulus for executives. And there is a massive amount of personal satisfaction because they move these people around the corporation, around the world.”

Last point (and there are still more goodies in the article): I knew that Toyota didn't care much about chasing cheap labor, they locate near their customers (that's a great lesson to learn from, one we read about yesterday). But, I never knew about their move into that workers' paradise known as France.

But the industry was gobsmacked in 2001 when Toyota decided to set up a plant in France, a notoriously difficult market to crack owing to trade barriers and a suspicion of anything Asian. And, on top of all that, the French industrial relations track record was famously bad.

“That bewildered everybody,” Mr Conomos said. “Why would you go there? Why didn't others do it? Attack the French market? Attack Europe from France? It was an unheard-of strategy.”

The car made at that plant, the Yaris, was voted European Car of the Year, and the plant has since doubled in capacity.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


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