Tuesday, July 8, 2008

Contradictions @ Toyota's - The Japanese Odyssey

Came across this interesting article in HBR about Toyota's interesting outlook to how they look at both "Soft innovation" and "Hard Innovation" when it comes to the organization DNA . It goes without a doubt that the organization has mastered both and it seeps down to grass root levels.
"Soft" is all about the organization management style and how it breeds effectiveness at all levels despite being a huge and gives a feeling of huge mammoth which is going to come down in troubled times.
The company views employees as knowledge workers and not just a pair of hands and hence at all levels they accumulate immense amount of "Chie" -the wisdom of experience. Six major contradictory tendencies were noticed in a research by the authors of this article , which influence this organization culture.
  1. Toyota moves slowly yet it take big leaps 
  2. Toyota grows steadily , yet it is a paranoid company 
  3. Toyota  operations are efficient , but it uses employee's time in seemingly wasteful ways
  4. Toyota is frugal but it splurges on key areas 
  5. Toyota insists on internal communications to be simple , yet it builds complex networks
  6. Toyota has a strict hierarchy, but it gives freedom to push back 
While in most organizations Goals are very clearly thought out and debated and set with an intent to achieve it with as much precision as possible , In Toyota the contradiction is the Goal is set more with an intent of direction and again most times it is fairly "impossible" to achieve . This trait could be pushing most managers to stretch as much as possible and prevents rigidity from creeping in.

Also another important aspect being when you are doing business beyond Japan the home country the culture which it  has imbibed is to ensure that in each country it customizes vehicles to the extent it is required in that country . It is not about tinkering with one type fits all. In-fact this aspect led to the organization replacing " Made in Japan" label with "Made by Toyota".

Experimentation : The concept of setting near impossible goals is well mitigated with the culture of experimentation. That is break down the major Goal into smaller packets of manageable challenges and then experiment using strict routines . It has refined the Plan Do Check Act (PDCA) model into Eight stepped Toyota business process . Many a times it helps the employees to break the status Quo; 
  • Clarify the problem
  • break down the problem
  • Set a Target
  • Analyze the root cause 
  • develop the counter measures 
  • see counter measures through 
  • monitor both results and processes
  • Standardize the successful process
Similarly the A-3 report is a standard in Toyota and forces all to capture the most essential information needed to solve a problem and it is proliferated across the organization.

As Toyota expands rapidly new products new markets  , challenges any organization is bound to come across is how do the ethos percolate across the organization down to root levels and across all levels . Again the when it comes to Toyota and the research done by the authors of this article clearly found patterns about the organization behavior which could be articulated by usage of the following terminologies :
Genchi Genbutsu , which essentially means "Have you seen it yourself?" Toyota encourages each of its senior executives to go down to the factory line, the dealerships etc and experience the same.
A few others like the conventional aspects like "Teamwork" , Positive mindset and Customer focus are also practiced with great deal of sincerity across the organization. 
However, a few aspects which need to be admired and other organizations need to try and emulate are the ones related to how you treat under performers . The focus which is there on re-skilling people and literally having a statement etched that Toyota does not believe in Job cuts even in a poorly performing market situation.
During Evaluation ,Toyota gives lot more emphasis to process performance and learning over results. The company looks at how the person has achieved the goals rather then the goal itself.  A few of the unique criteria it adopts which are very fuzzy and subjective  :
  • Jinbo : How you command respect amongst your peers , juniors and seniors. Very difficult to judge this unless you have worked very deeply with the person
  • nebari tsuyosa : Adhesives strength , how resolute or persistent are you ?
Despite being a very large and mammoth Enterprise , it still functions like a small town company , there are many other subtle aspects which help in achieving the same. All about the emphasis given Human networks or what Toyota describes as the Nerve System.

Openness is manifested even in the way offices are designed which have no partitions (obeya ) and Mieruka ( Visualization ). The later means having posters on the wall for all of them to see . Let us Yokoten  means open side ways ! ... share among your peers as well ....

Give freedom to to voice contrary views : Confronting your boss is acceptable , bringing bad news to boss is encouraged and ignoring the boss is often excused.

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