The toughest and most basic challenge for companies that want to learn from Toyota is how to create an aligned organization of individuals who each have the DNA of the organization and are continually learning together to add value to the customer.
Will Rogers, American social commentator, said, “We are a great people to get tired of anything awful quick. We just jump from one extreme to another.” I am afraid that is what most companies are doing with lean manufacturing. It is just one more thing to jump into and one more thing to jump away from when the next fad comes along. If there is anything to learn from Toyota, it is the importance of developing a system and sticking with it and improving it. You cannot become a learning organization by jumping willy-nilly from fad to fad.
The Toyota Way model was intentionally built from the ground up, starting with a philosophy. And the philosophy starts with the chief executives of the organization. What should their goal be? To build an enterprise for the long term that delivers exceptional value to customers and society. And this requires long-term thinking and continuity of leadership. It may take decades to lay the foundation for radically transforming the organization’s culture.
What do we know about changing a culture?
- Start from the top—this may require an executive leadership shakeup.
- Involve from the bottom up.
- Use middle managers as change agents.
- It takes time to develop people who really understand and live the philosophy.
- On a scale of difficulty, it is “extremely” difficult.
What if the top does not understand and embrace the new philosophy? I asked Gary Convis, president of Toyota Motor Manufacturing, Kentucky, the following question: “If you were a middle manager or even a vice president passionate about implementing the Toyota Way in your company and the senior executives did not strongly support it, what would you do?” His answer was blunt:
I would be out looking for better pastures (laughter), because the company may not be around long enough for me to get my pension. Actually, that’s a good question. Now, there could be a change in the top management. Maybe somebody up in the board recognizes that lean is not happening and needs to. Like General Motors did. … I think the board said, “Wait a minute, we’ve been giving these guys rope and we’ve been giving them time and we don’t see the direction.” At some point in time they decided enough is enough. The new direction was set and new priorities were set and resources were established.
So a prerequisite to change is for top management to have an understanding and commitment to leveraging the Toyota Way to become a “lean learning organization.” This understanding and commitment extends to building the lean systems and culture and, the most difficult for Western companies, sustaining and constantly improving the system. These are really two different skills, and even Toyota struggles with the balance, particularly in overseas operations.
This insight led me to develop the model, which illustrates the minimum level of leadership commitment needed to start on the lean journey—to learn from Toyota’s model of a lean learning enterprise. Answer these three questions:
- Are top executives who run the company committed to a long-term vision of adding value to customers and society in general? If the commitment is simply to short-term profitability, the answer is “No,” so go directly to the short-term tools box (the equivalent of “go directly to jail” in the game Monopoly).
- Are top executives who run the company committed to developing and involving employees and partners? This includes key suppliers. If people are viewed as expendable labor and suppliers are viewed as sources of cheap parts, the answer is “No,” so go directly to the short-term tools box.
- Will there be continuity in top leadership’s philosophy? This does not mean the same people need to run the company forever, but they need to develop their successors with the company’s DNA to continue the philosophy. If leaders turn over every time there is a crisis or if the company is bought out every decade with a new cast of characters installed as leaders, the answer is “No,” so go directly to the short-term tools box.
If the answer is “No” to any of these three questions, top leaders should pick and choose from whatever tools are out there to improve processes for the short term, make a bundle of money, and go do something else. This is tantamount to admitting the company will never be a learning enterprise, or a great company, and is interested only in cutting and slashing waste to look good for the short term. But beware, because whatever tools are implemented, they deteriorate over time and the company will suffer in the long term. As Convis said, nobody’s retirement income will be secure.
Note that there is a feedback loop from “begin lean journey” back to the original question of top leadership’s commitment to a long-term vision that has to be continually challenged. Let’s consider two examples that illustrate the importance of sustained leadership commitment. One was a great success but is now on the way to deteriorating because of a top leadership change and the second is a work in progress.