One the best researched books on the Toyota icon giving an indispensable inside look into the important principles and philosophies that had been painstakingly crafted by the founders of Toyota, these are valuable gems of ideals which all owners and employees need to have on hand when undertaking sales, repairs and discussions on all vehicles made by one of the most well known brands, reputedly a former leading giant in the automotive industry in the universe.
The Toyota Way can be briefly summarized through the two pillars that supports it : “continuous improvement” and “respect for people”.
Much of Toyota’s success comes from its astounding quality reputation. Consumers know that they can count on their Toyota vehicle to work right the first time and keep on working, while most U.S. and European automotive companies produce vehicles that may work when new but almost certainly will spend time in the shop in a year or so (emphasis on numbers excluded).
What is secret of Toyota’s success? The incredible consistency of Toyota’s performance is the direct result of operational excellence. …. Its success is ultimately based on its ability to cultivate leadership, teams, and culture, to devise strategy, to build supplier relationships and to maintain a learning organization.
Toyota’s focus in the 1940s and ’50s on eliminating wasted time and material from every step of the production process – from raw material to finished goods – was designed to address the same conditions most companies faced today; the need for fast, flexible processes that give customers what they want, when they want it, at the highest quality and affordable cost. A focus on “flow” has continued to be a foundation for Toyota’s success globally in the 21st century.
Toyota’s own internal Toyota Way document talks about the “spirit of challenge” and the acceptance of responsibility to meet the challenge. The document states:
We accept challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy. We approach our work vigorously, with optimisim and a sincere belief in the value of our contribution.
We strive to decide our own fate. We act with self reliance, trusting in our own abilities. We accept responsibility for our conduct and for maintaining and improving the skills that enable us to produce added value.
Executive Summary of the 14 Toyota Way Principles :
Principle 1 – Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
Principle 2 – Create continuous process flow to bring problems to the surface.
Principle 3 – Use “pull” systems to avoid overproduction.
Principle 4 – Level out the workload (heijunka). (Work like the tortoise not the hare.)
Principle 5 – Build a culture of stopping to fix problems, to get quality right the first time.
Principle 6 – Standardized tasks are the foundation for continuous improvement and employee empowerment.
Principle 7 – Use visual control so no problems are hidden.
Principle 8 – Use only reliable, thoroughly tested technology that serves your people and processes.
Principle 9 – Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
Principle 10 – Develop exceptional people and teams who follow your company’s philosophy.
Principle 11 – Respect your extended network of partners and suppliers by challenging them and helping them improve.
Principle 12 – Go and see for yourself to thoroughly understand the situation (genchi genbutsu).
Principle 13 – Make decisions slowly by consensus, thoroughly considering all options, implement decisions rapidly.
Principle 14 – Becoming a learning organization through relentless reflection and continuous improvement.
Further excerpts:
The purpose of Toyota is not to make a quality product that will sell well and make money for owners. That is a requirement in order to achieve that mission. The true mission, according to this statement, has three parts:
1. Contribute to the economic growth of the country in which it is located (external stakeholders).
2. Contribute to the stability and well being of team members (internal stakeholders).
3. Contribute to the overall growth of Toyota.
….Toyota’s guiding principles comes from the following internal document…revised after Toyota’s global expansion, to emphasize the company’s responsibility as a global citizen. The principles here accurately express Toyota’s feeling of responsibility to its business partners for stable, long-term growth, and mutual benefits.
Toyota’s guiding principles :
Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world.
Respect the culture and custom of every nation and contribute to economic and social development through corporate activities in the communities.
Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities.
Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.
Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management.
Pursue growth in harmony with the global community through innovative management.
Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships.
Yet, with these well thought out principles and philosophies, what does it really mean for a giant corporation that has never before faced as much criticisms of its products’ reliability and performance, ridicule of its service quality, accusations of irresponsibility in safety observance amongst other unrelenting brickbats. For a start, it should mean treating most, if not all owners of less prestigious older models with due respect, looking after their smallest of needs, not wants, so they feel respected and valued. It means not looking at former customers coming to Toyota service repairers with disdain and treating such customers as hassles compared to owners and potential buyers of newer models. It means treating all owners with equal urgency and care so such owners of older models do not feel like they are diminished in stature in comparison to owners of more expensive makes of Prius, Lexus or whatever newer models Toyota has in the pipeline. Toyota must never forget that its customers are also it partners in its ‘war’ to capture markets. Its customers are its eyes and ears even if they are not the equal in expertise when it comes to vehicular knowhow. Toyota’s employees cannot be tasked with looking out for all that is happening on the roads, across the regions and beyond Toyota’s luxurious markets.
Toyota needs to put the welfare of its existing customers as the top priority in its fight to regain respect and understanding from the world’s automotive market. Why is this the most important philosophy that Toyota must ingrain in the mind of EVERY single employee across every continent? Because everything will age and as newer models become relegated lower values who is to say that owners of prestigious models today will not face the same attitudes as owners of older makes face today. Toyota must remember good times like bad ones do not last forever. When sales were skyrocketing and its top executives were having the best times of their employment, Toyota was more focused on winning battles rather than capturing the hearts and minds of its partners, its existing customers. Granted the majority of the thousands of Toyota’s employees were truly honest and hardworking middle class people seeking a respectable living for themselves and their families. However, when cost minimization and profit maximisation are coupled with other aggressive goals of being the world’s number one in sales and beating north American, European and other brands in recognition, the burden of shouldering increasing responsibility and work load with thousands of new vehicles being flooded into the markets monthly, most of the ’smaller people’ within Toyota were possibly shouldering increasing burden on servicing more load than they were maximally able to handle. It would be incredibly surprising if this aggressive phenomenon did not taken its toll on the quality of service, optimal delivery time and customer relationship at all. Even if an organisation owns the best technology amongst its peers, better psychological and capital advantages the outcomes of battles fought will ultimately depend on the resilience and morale of its troops. As officers, Toyota’s top executives were too busy scanning the battle fields for positions of its competitors, seeking to gain grounds by destroying the markets of as many competing brands and models as possible, forgeting that as grounds are won they can soon be lost if hearts and minds are not aligned with the conqueror’s visions as many failed military expeditions have shown. In the near term, the question Toyota needs to ask is not whether it will EVER be number one again but whether it can regain the trust of existing customers on not only on the safety, versatility and performance of its vehicles, models but how it can provide the best solutions to customers, richer or the less rich when it comes difficulties faced on the roads. Toyota employees must endeavor to treat its customers as partners in its quest to redeem itself of mistakes whether perceived or real. Toyota needs to instill on its ALL its employees to provide its assistance to all owners of its makes rather than let them flounder in a sea of unscrupulous contract vehicle repairers most which are unsupervised in quality of service and lack the professionalism that is synonymous with past Toyota philosophies. In this small but meaningful way, Toyota employees wherever they are when answering quickly cries for help will be able to build fast the critical rapport that is crucial to Toyota’s survival as a reliable and friendly car maker whose focus is not restricted only to profits as it grows but to lifelong partnerships. In that regard, Toyota can gain a fast headway in improving its dire position today by engaging all its global centres in community and welfare projects to improve not only society’s perception of its brand which would indirectly impact on its sales in time. With increased participation in any society which Toyota will become an organisation seen to be not only reaping the fruits of profits but sowing the seeds of friendship, becoming a truly important player in shaping the social landscape of any market where it operates, improving the lives of not only its workers but also the less fortunate. Toyota’s officers need to remember when the fortress is captured and the riches seized, the most valuable thing conquered peasants can offer is their loyalty.We all participate in weaving the social fabric; we should therefore all participate in patching the fabric when it develops holes. ~Anne C. Weisberg
Some links on current news on Toyota recalls:
http://www.reuters.com/article/idUSTRE61D2TS20100222?loomia_ow=t0:s0:a49:g43:r1:c1.000000:b30963140:z0
http://www.google.com/hostednews/afp/article/ALeqM5jgvT8IvclOe1jb1D1gtVIUeXVqew
http://afp.google.com/article/ALeqM5gDEfBDomghpBKS1lUt-pj1PoWdIg
http://www.economist.com/opinion/displaystory.cfm?story_id=15498249
http://www.msnbc.msn.com/id/35516838/ns/business-washington_post
http://www.reuters.com/article/idUSTRE6183UL20100209?loomia_ow=t0:s0:a49:g43:r1:c0.145223:b30407840:z0
http://www.marketwatch.com/story/toyota-president-to-testify-before-us-congress-2010-02-18
One the best researched books on the Toyota icon giving an indispensable inside look into the important principles and philosophies that had been painstakingly crafted by the founders of Toyota, these are valuable gems of ideals which all owners and employees need to have on hand when undertaking sales, repairs and discussions on all vehicles made by one of the most well known brands, reputedly a former leading giant in the automotive industry in the universe.It describes the way Toyota uses operational excellence as a strategic weapon, the Toyoda family’s culture and Toyota’s extensive and indepth production system which emphasises elimination of waste, how the Lexus was developed with ‘no compromises’, development of the Prius for the new century, the priority given to long term philosophy at the expense of short term financial goals, its use of right process to produce right results, adding value to the company by developing partners and people and its continuous improvement learning (Kaizen) which involves relentless reflection (Hansei). Some of the more interesting excerpts :
The Toyota Way can be briefly summarized through the two pillars that supports it : “continuous improvement” and “respect for people”.
Much of Toyota’s success comes from its astounding quality reputation. Consumers know that they can count on their Toyota vehicle to work right the first time and keep on working, while most U.S. and European automotive companies produce vehicles that may work when new but almost certainly will spend time in the shop in a year or so (emphasis on numbers excluded).
What is secret of Toyota’s success? The incredible consistency of Toyota’s performance is the direct result of operational excellence. …. Its success is ultimately based on its ability to cultivate leadership, teams, and culture, to devise strategy, to build supplier relationships and to maintain a learning organization.
Toyota’s focus in the 1940s and ’50s on eliminating wasted time and material from every step of the production process – from raw material to finished goods – was designed to address the same conditions most companies faced today; the need for fast, flexible processes that give customers what they want, when they want it, at the highest quality and affordable cost. A focus on “flow” has continued to be a foundation for Toyota’s success globally in the 21st century.
Toyota’s own internal Toyota Way document talks about the “spirit of challenge” and the acceptance of responsibility to meet the challenge. The document states:
We accept challenges with a creative spirit and the courage to realize our own dreams without losing drive or energy. We approach our work vigorously, with optimisim and a sincere belief in the value of our contribution.
We strive to decide our own fate. We act with self reliance, trusting in our own abilities. We accept responsibility for our conduct and for maintaining and improving the skills that enable us to produce added value.
Executive Summary of the 14 Toyota Way Principles :
Principle 1 – Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
Principle 2 – Create continuous process flow to bring problems to the surface.
Principle 3 – Use “pull” systems to avoid overproduction.
Principle 4 – Level out the workload (heijunka). (Work like the tortoise not the hare.)
Principle 5 – Build a culture of stopping to fix problems, to get quality right the first time.
Principle 6 – Standardized tasks are the foundation for continuous improvement and employee empowerment.
Principle 7 – Use visual control so no problems are hidden.
Principle 8 – Use only reliable, thoroughly tested technology that serves your people and processes.
Principle 9 – Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
Principle 10 – Develop exceptional people and teams who follow your company’s philosophy.
Principle 11 – Respect your extended network of partners and suppliers by challenging them and helping them improve.
Principle 12 – Go and see for yourself to thoroughly understand the situation (genchi genbutsu).
Principle 13 – Make decisions slowly by consensus, thoroughly considering all options, implement decisions rapidly.
Principle 14 – Becoming a learning organization through relentless reflection and continuous improvement.
Further excerpts:
The purpose of Toyota is not to make a quality product that will sell well and make money for owners. That is a requirement in order to achieve that mission. The true mission, according to this statement, has three parts:
1. Contribute to the economic growth of the country in which it is located (external stakeholders).
2. Contribute to the stability and well being of team members (internal stakeholders).
3. Contribute to the overall growth of Toyota.
….Toyota’s guiding principles comes from the following internal document…revised after Toyota’s global expansion, to emphasize the company’s responsibility as a global citizen. The principles here accurately express Toyota’s feeling of responsibility to its business partners for stable, long-term growth, and mutual benefits.
Toyota’s guiding principles :
Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world.
Respect the culture and custom of every nation and contribute to economic and social development through corporate activities in the communities.
Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities.
Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.
Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management.
Pursue growth in harmony with the global community through innovative management.
Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits, while keeping ourselves open to new partnerships.
Yet, with these well thought out principles and philosophies, what does it really mean for a giant corporation that has never before faced as much criticisms of its products’ reliability and performance, ridicule of its service quality, accusations of irresponsibility in safety observance amongst other unrelenting brickbats. For a start, it should mean treating most, if not all owners of less prestigious older models with due respect, looking after their smallest of needs, not wants, so they feel respected and valued. It means not looking at former customers coming to Toyota service repairers with disdain and treating such customers as hassles compared to owners and potential buyers of newer models. It means treating all owners with equal urgency and care so such owners of older models do not feel like they are diminished in stature in comparison to owners of more expensive makes of Prius, Lexus or whatever newer models Toyota has in the pipeline. Toyota must never forget that its customers are also it partners in its ‘war’ to capture markets. Its customers are its eyes and ears even if they are not the equal in expertise when it comes to vehicular knowhow. Toyota’s employees cannot be tasked with looking out for all that is happening on the roads, across the regions and beyond Toyota’s luxurious markets.
Toyota needs to put the welfare of its existing customers as the top priority in its fight to regain respect and understanding from the world’s automotive market. Why is this the most important philosophy that Toyota must ingrain in the mind of EVERY single employee across every continent? Because everything will age and as newer models become relegated lower values who is to say that owners of prestigious models today will not face the same attitudes as owners of older makes face today. Toyota must remember good times like bad ones do not last forever. When sales were skyrocketing and its top executives were having the best times of their employment, Toyota was more focused on winning battles rather than capturing the hearts and minds of its partners, its existing customers. Granted the majority of the thousands of Toyota’s employees were truly honest and hardworking middle class people seeking a respectable living for themselves and their families. However, when cost minimization and profit maximisation are coupled with other aggressive goals of being the world’s number one in sales and beating north American, European and other brands in recognition, the burden of shouldering increasing responsibility and work load with thousands of new vehicles being flooded into the markets monthly, most of the ’smaller people’ within Toyota were possibly shouldering increasing burden on servicing more load than they were maximally able to handle. It would be incredibly surprising if this aggressive phenomenon did not taken its toll on the quality of service, optimal delivery time and customer relationship at all. Even if an organisation owns the best technology amongst its peers, better psychological and capital advantages the outcomes of battles fought will ultimately depend on the resilience and morale of its troops. As officers, Toyota’s top executives were too busy scanning the battle fields for positions of its competitors, seeking to gain grounds by destroying the markets of as many competing brands and models as possible, forgeting that as grounds are won they can soon be lost if hearts and minds are not aligned with the conqueror’s visions as many failed military expeditions have shown. In the near term, the question Toyota needs to ask is not whether it will EVER be number one again but whether it can regain the trust of existing customers on not only on the safety, versatility and performance of its vehicles, models but how it can provide the best solutions to customers, richer or the less rich when it comes difficulties faced on the roads. Toyota employees must endeavor to treat its customers as partners in its quest to redeem itself of mistakes whether perceived or real. Toyota needs to instill on its ALL its employees to provide its assistance to all owners of its makes rather than let them flounder in a sea of unscrupulous contract vehicle repairers most which are unsupervised in quality of service and lack the professionalism that is synonymous with past Toyota philosophies. In this small but meaningful way, Toyota employees wherever they are when answering quickly cries for help will be able to build fast the critical rapport that is crucial to Toyota’s survival as a reliable and friendly car maker whose focus is not restricted only to profits as it grows but to lifelong partnerships.In that regard, Toyota can gain a fast headway in improving its dire position today by engaging all its global centres in community and welfare projects to improve not only society’s perception of its brand which would indirectly impact on its sales in time. With increased participation in any society which Toyota will become an organisation seen to be not only reaping the fruits of profits but sowing the seeds of friendship, becoming a truly important player in shaping the social landscape of any market where it operates, improving the lives of not only its workers but also the less fortunate. Toyota’s officers need to remember when the fortress is captured and the riches seized, the most valuable thing conquered peasants can offer is their loyalty.
We all participate in weaving the social fabric; we should therefore all participate in patching the fabric when it develops holes. ~Anne C. Weisberg
Some links on current news on Toyota recalls:
http://www.reuters.com/article/idUSTRE61D2TS20100222?loomia_ow=t0:s0:a49:g43:r1:c1.000000:b30963140:z0
http://www.google.com/hostednews/afp/article/ALeqM5jgvT8IvclOe1jb1D1gtVIUeXVqew
http://afp.google.com/article/ALeqM5gDEfBDomghpBKS1lUt-pj1PoWdIg
http://www.economist.com/opinion/displaystory.cfm?story_id=15498249
http://www.msnbc.msn.com/id/35516838/ns/business-washington_post
http://www.reuters.com/article/idUSTRE6183UL20100209?loomia_ow=t0:s0:a49:g43:r1:c0.145223:b30407840:z0
http://www.marketwatch.com/story/toyota-president-to-testify-before-us-congress-2010-02-18
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