Toyota

The Arrogance of Success

May 22, 2024 By Nagesh Belludi Leave a Comment

The Arrogance of Success: Contentment Often Leads to Stagnation Don’t look in the rearview mirror and expect that what led to past success can lead to new success. Human nature is such that we don’t like to contemplate letting go of the skills and behaviors that “got us here.” The arrogance of success is to assume that what you did yesterday will be sufficient for tomorrow. Contentment often leads to stagnation.

Have a learning mindset. After every win, be critical—even faultfinding—and try to understand what made you successful in each case with brutal self-honesty. Was it luck? Was it skill?

Idea for Impact: Let success be a brilliant teacher in the areas where weaknesses must be addressed.

How Toyota Thrives on Imperfection

March 25, 2024 By Nagesh Belludi Leave a Comment

Toyota's Reflection Ritual: Perfecting Success with 'Hansei' The Japanese seamlessly blend their way of life with business, offering valuable lessons for the rest of us. Central to their culture is “Hansei“—deep self-reflection to acknowledge mistakes and plan prevention strategies. Hansei is practiced ad infinitum and consistently. It’s vital for personal and professional growth, both individually and collectively.

Toyota exemplifies this approach. Even after success, every team holds reflective “Hansei-Kai” meetings, akin to After Action Reviews (AARs.) The notion of everything being flawless is actively discouraged; instead, the culture stresses that “no problem is a problem.” If the team fails to identify any issues, it suggests they didn’t exert enough effort to meet expectations (highlighting areas for improvement,) lacked critical or objective analysis, or perhaps needs to cultivate more humility.

The Tyranny of Best Practices

May 9, 2022 By Nagesh Belludi Leave a Comment

By all means, acquaint yourself with the management practices of Dell (in supply chain management,) Toyota (quality control,) Ryanair (working capital,) or whatever company is the present-day shining exemplar of the pertinent best practices. But beware of the risks of taking their best practices out of context and applying them to your business.

Some advantages are unlikely to be accrued by borrowing fashionable ideas from other companies. It makes sense, for example, to study how Apple’s innovations have changed the world, but the visionary in Steve Jobs can’t be replicated.

Best practices can offer deceptively simplistic solutions. Some of them aren’t implementable—even relatable. You can try replicating Google’s policy of allowing employees to spend 20% of their time on their own ideas; that initiative isn’t likely to transform a company designing gasoline engines.

Many of the basic principles of innovation are universal. But management methods succeed—or fail—in a specific context. A company’s industry, maturity, location, and leadership structures influence this context. Unless you develop a thorough understanding of all the factors that have contributed to others’ success, there’s a risk that you’re learning the wrong lessons.

Idea for Impact: You can’t truly become another company. You can only become a better version of yourself, not an inferior version of someone else. Be inspired by others’ best practices, but don’t imitate them blindly.

What Elon Musk and Jeff Bezos Learn “On the Floor”

November 26, 2020 By Nagesh Belludi Leave a Comment

Leaders can learn a great deal on the frontlines, not only about the inner workings of the products they produce and the services they offer but also about their employees:

Tesla CEO Elon Musk sees being on the production line and understanding it an integral part of his job. Musk famously declared, “I have a sleeping bag in a conference room adjacent to the production line, which I use quite frequently.” He has helped his California factory hit its production goals—even “real-time triaging cars at the end of the line trying to get to the root cause of what the issues were.”
Amazon requires its deskbound managers to attend two days of call-center training. CEO Jeff Bezos said in 2007, “Every new employee, no matter how senior or junior, has to go spend time in our fulfillment centers within the first year of employment. Every two years they do two days of customer service. Everyone has to be able to work in a call center. … I just got recertified about six months ago. The fact that I did a lot of customer service in the first two years has not exempted me.”
Subway Restaurants’ chief development officer Don Fertman appeared incognito as a “sandwich artist” for a week on the popular CBS Undercover Boss reality TV show in 2010. Fertman remarked that this ground-level perspective offered managerial empathy and led to better decisions. Subway’s senior-level executives are now required to spend a week every year in the field, becoming aware of how their choices influence franchisees and customers.

Idea for Impact: The frontlines offer leaders unfiltered information

Leaders, don’t risk the ego trap of losing touch with the frontline experience.

Venture out of the office and work directly with frontline employees. Even do the work of those they lead for a while. You’ll break down the hierarchy and glean a valuable new perspective.

Don’t forgo the frontline advantage—that’s where problems are discovered, and solutions are born.

Lessons from Toyota: Go to the Source and See for Yourself

October 8, 2020 By Nagesh Belludi Leave a Comment

Firsthand, on-the-frontlines observation can offer critical insights that facilitate informed—and inspired—decision-making.

The Japanese approach to problem-solving calls this Genchi Genbutsu (literally “go and see for yourself.”) Sometimes called “get your boots on,” it’s not unlike the notion of management by walking about (MBWA.)

Genchi Genbutsu Refers to a Disposition Than a Specific Action

Genchi Genbutsu is rooted in the idea that any report, say, about a problem on the shop floor, is an abstraction. It’s separated from its context, and therefore generalized and relativized.

Secondhand information tends to misrepresent reality enough to give you a false sense of conviction. The only real way to understand a problem is to see it on the shop floor and get the full breadth and depth of information to make the right decision.

For that reason, any solution concocted at headquarters, where the report is received and the problem diagnosed from a distance, is doubly abstracted from the source.

Genchi Genbutsu isn’t a license for management interference, but to understand the problem, unearth the root cause, and help those doing it to resolve the issue.

Genchi Genbutsu Case Study: Toyota Sienna and the 53,000-Mile Roadtrip

When Yuji Yokoya was appointed the chief engineer for the 2004 Toyota Sienna minivan, he had never designed a vehicle purposely for the North American market. He traveled 53,000 miles across North America to monitor and discover what was wrong with the previous Sienna models. He drove the Sienna and competitor’s minivans through every state in America, every province in Canada, and every state in Mexico. in February 2003, Forbes noted,

In Memphis, Yokoya’s minivan was blown into the next lane crossing the Mississippi from Tennessee to Arkansas. Fix: Yokoya reduced the van’s wind resistance by narrowing the gaps between panels and adding plastic shields under the wheel wells to redirect air.

In Yukon Territory, road noise on the Alaska Highway prevented conversation between the driver and rear passengers. Fix: Yokoya stiffened undercarriage to reduce twisting and added sound-dampening material to the frame.

A culture of on-the-spot problem solving is so ingrained in the Toyota culture. According to company lore,

In the mid-’70s, Toyota had just introduced a four-speed automatic transmission. It was very unusual to have an automatic transmission fail, if ever. It seemed indestructible. When Dr. Shoichiro Toyoda [scion of the founding family and chairman of Toyota 1992–99] visited a dealership, the dealer complained that a car just came in with a transmission that had failed. Dr. Toyoda, in his pressed suit, walked over to the technician, got in a dialogue with him, walked over to the oil pan where he’d drained the oil from the transmission, rolled his sleeve up, and put his hand in this oil, and pulled out some filings. He put the filings on a rag, dried them off, and put them in his pocket to take back to Japan for testing. He wanted to determine if the filings were the result of a failed part or if it was residue from the machining process.

Genchi Genbutsu Case Study: Medtronic and the Bloody Catheter

In the late ’80s, when Bill George became CEO of medical equipment manufacturer Medtronic, he discovered that its catheter sales weren’t good enough. His engineers had said the product was first-rate and improving.

When George visited an operating room to observe a surgical procedure, Medtronic’s catheter fell apart in the surgeon’s hands as soon as he inserted the balloon catheter into the patient’s femoral artery. The surgeon extracted the catheter from the patient. In a fit of rage, he hurled the blood-spattered device across at George, who ducked to avoid injury.

This “Bloody Catheter” incident helped Medtronic fix faulty products and spurred a thorough overhaul of Medtronic’s engineering, sales, and problem-solving processes. George later recalled,

Field reports are a dime a dozen. There’s no emotional association with them. But when you’re in a medical environment like an operating room, all your senses-sight, sound, smell, taste-are working. It’s a totally different experience than reading a field report.

Idea for Impact: If you haven’t experienced something firsthand, your knowledge about it is probably suspect

Even in the information age, not all knowledge you need can be at your fingertips. Go to the source. Be where the action happens. Don’t forego the power of emotional input.

Small Steps, Big Revolutions: The Kaizen Way // Summary of Robert Maurer’s ‘One Small Step Can Change Your Life’

June 18, 2019 By Nagesh Belludi Leave a Comment

Most intentions for change seek a transformative change—something significant to be achieved once and for all, in a short period. “Big, bold steps” is the mantra of many a self-help book or motivational guru du jour.

Real change, however, takes time and is difficult. You become overwhelmed with the magnitude of the effort and persistence required to lose twenty pounds, save up for retirement, change jobs, or stabilize a sinking relationship.

As with most New Year resolutions, you’ll meet with success temporarily, only to find yourself slipping back into our old ways as soon as the initial burst of enthusiasm fades out.

Gradual Improvement, Not Radical Change

UCLA clinical psychologist Dr. Robert Maurer’s One Small Step Can Change Your Life: The Kaizen Way (2004) conceives transformative change as an endless, continuous process of gradual improvements.

By breaking daunting tasks into absurdly little steps, you feel little resistance to change.

To initiate a worthwhile exercise regimen, for example, Maurer suggests that you start exercising by marching in front of the television for one minute for a day or two. Then, little by little, ask, “How could I incorporate a few more minutes of exercise into my daily routine?” Such modest questions help you seek the next proverbial baby step and “allow the brain to focus on problem-solving and action.”

To tidy up your home, pick an area of your home, set a timer for five minutes, and tidy up. Stop when the timer goes off. [This is similar to my ’10-Minute Dash’ technique to overcome procrastination.]

One small step leads to the next, which leads to one more, and so on—finally leading you to your goal of transformative change.

“Little Steps Add Up to Brilliant Acceleration”

Maurer relates this approach to Kaizen, the famed Japanese system of obsessive tinkering and continuous, incremental improvement. This idea is actually American in origin—it was brought over by American efficiency and quality experts such as W. Edwards Deming who were helping Japan rebuild its industrial strength after World War II.

Kaizen involves making continual, small adjustments to production techniques to not only improve speed and quality, but also save resources. That is to say, it is a relentless pursuit of perfection by breaking it down into incremental improvements.

At companies that have embraced Kaizen and other Total Quality Management (TQM) approaches, employees come to work every day determined to become a little better at whatever it is they are doing than they were the day before. Katsuaki Watanabe of Toyota, the poster-boy of TQM, has acknowledged,

There is no genius in our company. We just do whatever we believe is right, trying every day to improve every little bit and piece. But when 70 years of very small improvements accumulate, they become a revolution.

Small Kaizen questions help you determine the next baby step and allow the brain to focus on problem-solving and action

“Little and often” empowers you to “tiptoe past fear”—your brain stops putting up resistance because it is tricked into thinking that you’re embarking only on something minuscule.

All changes are scary, even positive ones. Attempts to reach goals through radical or revolutionary means often fail because they heighten fear. But the small steps of Kaizen disarm the brain’s fear response, stimulating rational thought and creative play.

You can thus triumph over fear and the subsequent inaction that fear causes.

Small steps rewire your nervous system, create new connections between neurons so that the brain enthusiastically takes over the process of change and you progress rapidly toward your goal.

Minimalist, steady, incremental change helps your brain overcome the fear that impedes success and creativity

To avoid failure at keeping your resolutions despite your best intentions, don’t push yourself to somehow become different rapidly. Instead, pledge to achieve positive, enduring life changes one powerful baby step at a time.

Other prominent insights in Maurer’s One Small Step Can Change Your Life:

“Small actions satisfy your brain’s need to do something and soothe its distress.”
“If you are trying to reach a specific goal, ask yourself every day: What is one small step I could take toward reaching my goal?”
“Small actions are at the heart of Kaizen. By taking steps so tiny that they seem trivial or even laughable, you’ll sail calmly past obstacles that have defeated you before. Slowly—but painlessly!—you’ll cultivate an appetite for continued success and lay down a permanent new route to change.”
If you hit a wall of resistance, “don’t give up! Instead, try scaling back the size of your steps. Remember that your goal is to bypass fear—and to make the steps so small that you can barely notice an effort.”
When we face crises, “the only concrete steps available are small ones. When our lives are in great distress, even while we are feeling out of control or in emotional pain we can try to locate the smaller problems within the larger disaster … to help move us slowly in the direction of a solution. But if we are blind to the small, manageable problems, we are more likely to slip into despair.”

Recommendation: Speed-read One Small Step Can Change Your Life: The Kaizen Way. It will help if you or a loved one is stuck in the rut of goal failure.

Take really small steps towards every significant change you want to make. The cumulative benefits of small improvements do have the power to produce large, transformative change. Let Kaizen be a routine that is never done.

Learning from the World’s Best Learning Organization // Book Summary of ‘The Toyota Way’

November 27, 2017 By Nagesh Belludi Leave a Comment

Toyota is the World’s Most Benchmarked Company, and for Good Reason

Toyota’s cars are reputed for their reliability, initial quality, and long-term durability. It is the pioneer of modern, mass-production techniques and a paragon of operational excellence. Even if its reputation has taken a beating in the last few years because of the uncontrolled acceleration crisis and major product recalls, Toyota’s long-term standing as the epitome of quality production is undeniable.

Toyota measures and improves everything—even the noise that doors make when they open and close. As cars roll off assembly lines, they go through a final inspection station staffed by astute visual and tactile inspectors. If they spot even a simple paint defect, they don’t just quietly fix the problem merely by touching up the paint to satisfy the customer or their plant manager. They seek out systemic deficiencies that may have contributed to the problem, and may hint at deeper troubles with their processes.

World-Class Processes, World-Class Quality

As Jeffrey K. Liker explains in his excellent The Toyota Way, the genius of Toyota lies in the Japanese expression ‘jojo‘: it has gradually and steadily institutionalized common-sense principles for waste reduction (‘muda, mura, muri‘) and continuous improvement (‘kaizen.’) Liker, a professor of industrial engineering at the University of Michigan (my alma mater) has studied the Toyota culture for decades and has written six other books about learning from Toyota.

Liker establishes the context of The Toyota Way with a concise history of Toyota Motor (and the original Toyoda Textile Machinery business) and the tone set by Toyota founders Sakichi and Kiichiro Toyoda. Quality pioneers such as Taiichi Ohno, W. Edwards Deming, and Joseph Juran instituted groundbreaking philosophies that shifted Toyota’s organizational attention from managing resource efficiencies in isolation to managing the flow of value generated by the Toyota Production System (TPS.)

“No Problem is the Problem:” How Toyota Continuously Improves the Way it Works

Liker devotes a bulk of his book to the distinct elements of Toyota’s foundational principles: continuous flow, minimal inventory, avoidance of overproduction, balanced workload, standardized tasks, visual control, etc. He drills down to the underlying principles and behaviors of the Toyota culture: respect people, observe problems at the source, decide slowly but implement swiftly, and practice relentless appraisals of the status quo. Liker states, “Toyota’s success derives from balancing the role of people in an organizational culture that expects and values their continuous improvements, with a technical system focused on high-value-added flow.”

Companies that have tried to emulate Toyota have struggled not with understanding its management tools but with putting into practice the mindset and the organizational discipline that permeates everything Toyota does. “Understanding Toyota’s success and quality improvement systems does not automatically mean you can transform a company with a different culture and circumstances.”

Book Recommendation: Read The Toyota Way. As Liker observes, “Toyota is process oriented and consciously and deliberately invests long term in systems of people, technology and processes that work together to achieve high customer value.” The Toyota Way is comprehensive and well organized, if tedious in certain parts. It can impart many practical pointers to help improve the operational efficiency of one’s organization. Peruse it.

Postscript: I’ve taken many tours of Toyota’s Georgetown, Kentucky, factories and a few associated suppliers—once as part of a lean manufacturing study tour organized by Liker’s research group and other times privately. I strongly recommend them for observing Toyota’s matchless culture in action on the production floor. I also recommend the Toyota Commemorative Museum in Nagoya for a history of Toyoda Textile Machinery and Toyota Motor and their management principles.

How Smart Companies Get Smarter: Seek and Solve Systemic Deficiencies

August 26, 2016 By Nagesh Belludi Leave a Comment

At Toyota, as cars roll off the assembly line, they go through a final inspection station staffed by astute visual and tactile inspectors. If these inspectors spot a paint defect, they don’t just quietly fix the problem merely by touching up the paint to satisfy the customer or their plant manager.

As part of Toyota’s famed kaizen continuous improvement system, floor workers identify the systemic causes that led to the specific defect on the specific car. They then remedy the root cause of the problem so it won’t happen again.

Fostering an atmosphere of continuous improvement and learning

Most companies cherish employees who are watchful of problems and take it upon themselves to detect and solve problems without criticism or complaint. A software company, for example, may treasure a programmer who observes an unforeseen coding mistake, and swiftly develops a patch to keep her project moving forward.

In contrast, companies like Toyota who are obsessive about quality improvement, organizational learning, and developing collective intelligence don’t reward or tolerate such quiet fixers.

At companies that have adopted the kaizen philosophy, continuous improvement originates from the bottom up through suggestion systems that engage and motivate floor employees to look out for systemic problems, raise quality concerns, and help solve those problems. These companies encourage their employees to actively seek small, simple, and incremental improvements that could result in real cost savings, higher quality, or better productivity. According to Taiichi Ohno, the legendary Japanese industrial engineer identified as the father of the Toyota Production System, “Something is wrong if workers do not look around each day, find things that are tedious or boring, and then rewrite the procedures. Even last month’s manual should be out of date.”

Idea for Impact: To develop collective intelligence and build smarter organizations, discourage employees from heroically patching up recurring problems. Instead, encourage them to find, report, analyze, experiment, and fix systemic problems to prevent their recurrence.

Toyota

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Idea for Impact: The frontlines offer leaders unfiltered information

Wondering what to read next?

Genchi Genbutsu Refers to a Disposition Than a Specific Action

Genchi Genbutsu Case Study: Toyota Sienna and the 53,000-Mile Roadtrip

Genchi Genbutsu Case Study: Medtronic and the Bloody Catheter

Idea for Impact: If you haven’t experienced something firsthand, your knowledge about it is probably suspect

Wondering what to read next?

Gradual Improvement, Not Radical Change

“Little Steps Add Up to Brilliant Acceleration”

Small Kaizen questions help you determine the next baby step and allow the brain to focus on problem-solving and action

Minimalist, steady, incremental change helps your brain overcome the fear that impedes success and creativity

Wondering what to read next?

Toyota is the World’s Most Benchmarked Company, and for Good Reason

World-Class Processes, World-Class Quality

“No Problem is the Problem:” How Toyota Continuously Improves the Way it Works

Wondering what to read next?

Fostering an atmosphere of continuous improvement and learning

Wondering what to read next?