“Westerners are often eager to blame others when something goes wrong. The attitude of “the buck stops here” is the exception, not the rule. It is just the opposite within Toyota. The greatest sign of strength is when an individual can openly address thing that did not go right, take responsibility, and propose countermeasures to prevent these things from happening again.” - Jeffrey Liker, “The Toyota Way.”
If you’ve been watching the news at all over the past couple years you’ve seen Toyota that has come to dominate the global auto industry, surpassing GM last year to become the world’s largest carmaker. As GM and Ford have struggled to keep their heads above water, cutting thousands of jobs and closing factories, Toyota has been expanding and profiting along the way.
While the American companies have been pointing to an undervalued yen as the source of their fall from the top, I think the answer to this power shift has much more to do with organizational culture and leadership than currency issues. Simply put, Toyota is a better company.
Much has been written about the organizational culture of Toyota in the last two decades, but one factor stands out from the rest as a key to their success – kaizen, the Japanese term for constant improvement.
Kaizen teaches individual skills for working effectively in small groups, solving problems, documenting and improving processes, collecting and analyzing data, and self-managing within a peer group. It pushes the decision making (or proposal making) down to the workers and requires open discussion and a group consensus before implementing any decisions. pg 24, “The Toyota Way” (emphasis mine)
The philosophy of kaizen is something that is of great benefit not only to businesses, but churches, non-profits and civic groups as well. It seems like a no-brainer, yet few organizations really practice it. Why? Here are some thoughts.
5 Barriers to Kaizen:
1. Insecure Leadership – Kaizen means that procedures and philosophies are continually questioned, debated and changed. If the leadership can’t handle having their ideas challenged on a frequent basis then the organization is destined to become irrelevant. Leaders must be secure enough to know that the free debate of ideas is healthy and necessary and does not represent a personal attack on their authority. This isn’t to say they shouldn’t be the final authority on decisions, only that they must allow input from others and not be surprised or upset when their ideas are tweaked or replaced for something better.
2. My Way or the Highway – A demand for unquestioned obedience and “my way or the highway” attitude will also squash kaizen, producing a reluctance to bring forth a new ideas out of fear of reprisal. A dictatorship may work in organizations with a handful of people, but it is impossible for one person to possess all the knowledge necessary to run a complex system. It is the front-line workers that will have the best view of what needs to be changed and their voices must be heard for kaizen to happen.
3. Fat on Resources – This may seem counterintuitive, but often times it is the overabundance of resources that keeps an organization from recognizing the need for improvement. If you have too many resources then waste is ignored and issues are solved by more money, more committees and more positions rather than solving the underlying problem.
After WWII, much of Japan’s economy was destroyed and Toyota faced the hard decisions that come with many problems and few resources. They couldn’t afford any waste so they had to invent a new production system that would later be known as “Just In Time.” Lack of resources forced Toyota to innovate. *Side note: Marc Andreesen has some great points regarding raising too much money as a startup here.
4. Unmotivated or Ill-equipped employees – One thing that interested me about Toyota is their hiring process. While many companies approach filling assembly line jobs as simply a numbers game Toyota seeks out highly talented and motivated employees to fill even the most basic of positions. They understand that people are more important than machines and need incentives to keep from slipping into the “lifer” mentality, as my friend Akshay put to well. By hiring quality people and constantly providing them with training and education opportunities they also ensure that kaizen will be skillfully applied by their front-line employees.
5. Promotion by Numbers - If your promotion emphasizes toeing the line more than it does improving the organization, kaizen will be severely restricted. In order for a company to continually adapt it must reward the mavericks, the innovative thinkers who question the norm and create new ways of doing things. These people may not always fit the polished image that many organizations desire in their upper echelons, but if these people are marginalized, rather than promoted, a dangerous precedent will be set that going with the flow pays more than trying to make a change.
Resources:
Kaizen – Wikipedia
“Toyota ‘world’s largest carmaker’” – BBC News
“The Toyota Way” by Jeffrey Liker
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This is a wonderful article. (Surprisingly, the Japanese credit the Americans for having started them of this part…if I am not mistaken.)
I read the book, Kaizen, quite some time ago and must brush off the dust and re read it.
I remember a statement in the book that many employees of Canon, the camera juggernaut, earned enough rewards from their Kaizen contributions to fully furnish their homes.
@ fathersez,
I definitely want to read the book Kaizen, sounds interesting. I admit that I am very new to the concept, just discovered it in “The Toyota Way,” but it makes so much sense that I want to learn more about it.
That’s interesting that the Japanese credit the Americans, I hadn’t heard that. Do you know where it originated?
Thanks so much for your kind words and comments…and also for the book tip!
-Cameron
I have read Kaizen and try to apply it to my own life and company. The idea being that I want all of my employees to be active members of the company. By engaging and empowering each and every employee our company spends less time managing and more time creating value.
The book I read was Kaizen: The Key To Japan’s Competitive Success.
It was a fascinating read, unfortunately I can’t find it in my home library. I must given it to someone and forgotten about it.
On the crediting to Americans – I may be wrong, but I think the Japanese quest for quality that was ignited by an American. Mr. Edwards Denning. And the rest is history. They started on TQM and conquered the world. The following article is a good snap shot of TQM, and Kaizen is a pillar of TQM.
http://www.isixsigma.com/library/content/c031008a.asp
Sorry if I sound “lecturely?”, but Kaizen is a subject I absolutely love.
Kaizen, American companies are beyond that, what happen at GM & Ford is they don’t have the cheep labor forces and in America the motto is not “Above all my Job is the most important thing in my life”
Toyota is also another over rated company that if we had to work at the plant in Japan and live in Japan, we would jump off a bridge.
This is democracy in practice – or it could be.
Its funny how Americans are surprised that not long ago they were the ones you would learn from if you wanted freedom/s, openmindedness, brave thought.
Now you are in a pit of stupidity. Too many resources??? you’ll learn….
@ John galt,
I love your words, “By engaging and empowering each and every employee our company spends less time managing and more time creating value.” So true!
@ fathersez,
You don’t sound “lecturely” at all, it’s always awesome to find subjects that readers are passionate about because it drives such a good discussion.
@ john,
Is labor really that much cheaper in Japan? I’m not being sarcastic, I really don’t know. I know it is in places like China and Vietnam, but Japan has a much higher standard of living, so I wonder if that is really the case. Also, isn’t part of the problem the huge union force active in GM and Ford?
Sorry if I don’t wrap my arms around your argument on first glance, but I am always skeptical of blaming cheap foreign labor when the problem is almost always much deeper than that. Maybe in the end Toyota is winning because their cars don’t break as much.
@ Carl,
We all find ourselves in a pit of stupidity every now and then. Also, would love to hear a better explanation of your last few words, “Too many resources??? you’ll learn…” What exactly do you mean?
-Cameron
I do consulting in the Lean Manufacturing / Kaizen realm – primarily with automotive OEMs and Suppliers, but have also worked with Lawn & Garden and Health Care.
Workers will resist until 1-It’s clear that jobs are not being lost with the program (normal attrition is just not back-filled which creates the labor savings), and 2-they find out the new process changes are easier to use, the plants are cleaner (much less wip and scrap), and quality begins to improve – which front-line workers know will ultimately protect their jobs.
Management, as noted, on the other hand is not amused by Lean / Kaizen – at least Middle Management (Executives and Owners are intently interested in improving the company and are the necessary champions of the project). Many managers feel threatened because the processes they are expert at will be changing (they probably got promoted because they were the “best at that old process” of the other workers). The best story I heard was to imagine trying to take a food bowl from a junk-yard dog – it has the best chance of resisting change. The Executives/Owners of the company must be strong Champions – which will be tested when the middle managers run to them to halt the progress for any number of excuses. There is also some job fear in this – Managers also fear losing jobs since 1-why didn’t they implement this stuff the consultants are proposing (which shows up as ‘oh we tried that before and it didn’t work’)? and 2-if the work force is slimmer, will the question be posed that there are too many managers? Again, as for the line workers, it’s an attrition game. People move, retire, or leave for other jobs all the time. What sustains a company during the initial stages is the usual 50-70% reduction in inventory and purchases that happen in the first wave of improvements – and the excess capacity generated by the plant that can be sold to more customers absorb the excess labor pools.
Many look at Lean / Kaizen as cost reduction programs (ie labor reduction and resist) but these techniques really enable a company to be more competitive and expand capacity with very little excess cost. Where they were choking on their current business they suddenly begin to realize their costs are lower and they can take on more sales – thinning all those fixed costs even more.
It’s not about national culture – it’s about understanding the business of manufacturing competitively.
John
Private Productivity Consulting, LLC
@ John,
I can’t tell you how excited I was to see this comment because it’s rare that you get insight from someone that is an expert in the field. Like I said above, this is my first exposure to Lean/Kaizen so these were just my initial thoughts after reading a bit. I’m so glad that you could add and expand Kaizen and give some real world application.
I can imagine there are many barriers to coming in and helping change the direction of a company. I don’t envy you, haha!
Which companies in America today do you feel understand and implement Lean/Kaizen the best?
-Cameron
I really liked JS’ comment as well. Especially the part about champions leading an initiative. Without someone of authority supporting a (seemingly) difficult transition, there is little in the way of change. Internal credibility is at issue here.
I run across similar change management issues in health care, trying to get folks to adapt to a more electronic world. Health care is far behind many industries and seniority politics still plague its organizational ladder. Buy-in comes from champions. All you need is that one person backing your belief, philosophy, whether it be kaizen or six sigma, and most people will jump on board. Diamonds in the rough I tell ya!
The person credited with starting the Japanese on the business model being discussed is Edward Deming. His ideas of valuing employees and their input over assembly line efficiency were ridiculed in the 50′s by many in corporate america. Looks like he had the last laugh.
Excellent article. Just touches the tip of the iceberg that lies behind closed american Corporation doors. At times they almost seem to all be in bed together. Like Oil companies forcing us to buy Hybrid cars with high prices at the pump then tell us we have too many cars on the road using fuel. At$2.00 per gallon wer there half as many caars on the road so now we pay $4.00. When will huge Corps get a grip. If americans decide they dont want Hybrids they will walk to work its just the way they are. Reminds me of the starving Irish in the 1800s and the Quee n of England saying “well let them eat cake”
explanation @ Cameron
By too many resources, I was pointing to your very fine article ( #3) and more generally to the US.
As you mentioned, in times of abundance who cares how things are going, its going better than ever.
Frame this on the USA, you will have around 50-60 years of “who-cares” attitude on how things are going.
Suddenly a nation that lit up in a world of darkness, is burdened with corruption at the peaks of power, anxiety in the middleclass, and widespread poverty just below.
To put it short, I think its very difficult to make long term improvements in times of prosperity.
I just finished reading the book, “Kaizen”, and have begun to read “One Small Step Can Change Your Life”. This philosophy/business practice was first created in depression era America. In 1940, the US realized it needed to send military equipment to the Allied Forces, so the factories had to step up quality production quickly. Trouble was that most of the experienced workers and supervisors had been sent off to war. Many of the factories had to hire women (most who had never done factory work). So the US Gov established a Management training program called Training Within Industries (TWI) and offered it to us companies. It focussed on continual improvement by small steps. In other words, finding hundreds of little things to improve within the company, using the cooperation and input of all employees. The result was that the equipment was of excellent quality and flew out of the factories in record time. Quality and efficiency were the focus. And the employees were very proud of their acomplishments. Dr W Edward Deming was the most vocal proponent of the training. He was a statistician who developed a theory of constant improvement. After the war was over and the veterans returned home to their jobs, Deming was egnored and most facory work returned to the status quo.
However, General McArthur went to Japan to rebuild their smashed economy. Granted, it was nothing impressive to begin with. Japan produced mostly toys, because no one wanted their poorly produced products. Management had slack practices, and employee morale was low even before the war. But McArthur knew their economy needed to recover so North Korea didn’t get any bright ideas of overthrowing Japan. So the US Gov. sent the same trainers to Japan that had trained the US companies. At the same time, the US Air Force held Management training as well, focusing on quality control, small steps to improvement, and veiwing employees as assets for input. Japan ate it up. They recognized that they were being trained by the country that not only was instrumental in winning the war, but also had a reputation for exporting quality products. They took this info to their places of business and began implementing it. In the 1950′s, Japan invited Dr Deming to review their progress and add his input. The Japanese have since then so embraced this as the way of doing business, they made it their cultural philosophy and have named it Kaizen.
The US was foolish to not continue what it had begun; perhaps too opulent to care. But now that the economy has taken a turn for the worse, US companies cannot afford to egnore the oportunities they have to increase their efficiency and product quality. The competition is too tight.
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