Basic Business Cents
In ancient China, the keeper of the Imperial Library, Lao Tzu, was famous for his wisdom. Perceiving the growing corruption of the government, he left for the countryside. On his way, the guard at the city gates asked Lao Tzu to write out the essence of his understanding to benefit future generations. Lao Tzu wrote the Tao Te Ching and was never heard of again. This book, generally translated into meaning, “The Way” has become one of the most influential books in history.
Toyota Motor Corporation created their version as a way of doing business called ‘The Toyota Way”. The two focal points are continuous improvement and respect for people. The principles for a continuous improvement include establishing a long-term vision, working on challenges, continual innovation, and going to the source of the issue or problem. The principles relating to respect for people include ways of building respect and teamwork. This is their guiding way for managing the business and guiding behavior.
Continuous improvement starts with sharing a long-term view with all employees so that everyone is in sync going in the same direction with regards to a vision of the future of the organization, values, and steps needed to attain the vision. In other words, a strategy shared by all.
Next is a shared understanding that the right process will produce the right results. Processes should be continually challenged for opportunities to improve by eliminating waste. Toyota lists seven types of waste; overproduction, waiting, unnecessary transport or conveyance, incorrect processing, excess inventory, motion, and defects.
The second half of the Toyota Way is to develop the people. They believe in the ability and intention of their people and enlist their aid in achieving their goals. To do this, they supply on-going training in continuous improvement and supply standard methods to be used in problem solving, process improvement, and process innovation. They are taught how to work in teams to solve problems and are judged by team achievements rather than individual efforts. The employees are challenged to recognize and solve problems.
Suppliers are treated in much the same way as employees. Toyota challenges them to do better and help them to achieve it. They provide the same training employees receive to help suppliers discover and fix problems in the supply chain, along with on-site application consulting. In effect, they become virtual partners with their suppliers to improve the total system from raw material to finished product.
Toyota trusts their people but also expect their managers to have first-hand working knowledge and understanding of the processes in their areas. In this way, consensus-based solutions can be swiftly implemented once decisions are made. Teamwork is built through mutual ownership of problems and solutions.
Anther way of explaining The Toyota Way is continued growth in the business, customers, and employees. They do this with continued challenge, improvement, and innovation of work processes and systems.
What is The Way of your organization, the guiding philosophy of doing business and treating people? Do all of your employees understand it and buy in? Do you?