The Way

 Basic Business Cents

The Way

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?

Advanced Strategic Improvement Practices

 Basic Business Cents

Advanced Strategic Improvement Practices

The leaders in performance improvement practices shared their techniques and philosophy at a conference in the Twin Cities last month. Attendees came from not only as far away as Florida and Manitoba but also from Bemidji and Park Rapids. Speakers represented industries from banking, medicine, food, education, manufacturing, government, and even consulting. Methods used to improve performance are applicable no matter what the industry or type of business.

Professionals in the field of performance improvement sometimes refer to the little q-quality of products or services, and big Q-quality of processes and systems.

Little q is the traditional view of quality of inspecting after the fact the quality of products and services. Inspection is too late; the poor quality detected has already been produced. It is a measure of waste and rework, warranty costs, dissatisfied customers, and rework. Management and employees look at little q as the responsibility of the quality department.

Big Q involves the quality of the performance of the entire organization and is the responsibility of leadership. It is viewed as the continuous improvement and innovation of the processes and systems that produce the products and services. Transformation of big Q does not happen accidentally. It starts and ends with leadership.

This conference was about big Q.

The CEO of a major healthcare facility said the goal in healthcare is to achieve a better outcome for the patients, not money.  Having said that, he also said there is 30-40% waste in healthcare. Lean Thinking Techniques is one of the solutions to eliminating that waste.

A consultant and former General Manager of a manufacturing company who is a supplier to Toyota shared that the Toyota Way is to combine continuous improvement with respect for people. Their management focus is in three areas:  Growing the Business, Satisfying Customers, and Growing People. The latter has two elements, teach and coach a standard problem solving method and challenge and coach people to solve problems.

A state government official discussed the need to learn how to change the culture of the organization. He divided that effort into three parts; rely on data for decision-making, develop a learning organization, and share goals.

Several presenters focused on the need to challenge the status quo, constantly looking for better ways.

The truly encouraging fact from this conference is the recognition of the presenters that a change in the culture of the organization is required if the performance improvement journey is to endure over time. Many organizations in the past have made the mistake of introducing the tools of performance improvement without adequately communicating to all employees the reasons why and the importance of the effort.

A good system of improvement will make sure we are working on the right things, we are addressing the issues with the right tools, and engage all employees with the knowledge of the system. In this way, behavior and culture are changed to ensure continuous improvement and innovation is sustained over time.