Toyota's Powerful HR
In this excerpt from "Toyota Culture: The Heart and Soul of the Toyota Way," the authors discuss how the key to success at Toyota requires a production system that highlights problems and a human system that produces people who are willing and able to identify and solve them.
By Jeffrey K. Liker, Michael Hoseus and the Center for Quality People and Organizations
Saturday, November 1, 2008
Toyota Culture: The Heart and Soul of the Toyota Way
SUPPORTING THE TWO CRITICAL VALUE STREAMS: PRODUCT AND PEOPLE
The Core of Toyota Culture Is Not Negotiable
Toyota has kept its identity as a company, including its philosophy and principles, remarkably consistent for many years. Its values of trust and continuous improvement permeate its commitment to long-term thinking, developing people, standardization, innovation, and problem solving. It is a learning organization that literally thrives on its people engaging in identifying and solving problems together and achieving results that will benefit everyone.
The Toyota Way culture is the critical ingredient in the company's organizational DNA, and it allows for constructive local adaptation of a global company at the same time that it avoids the potential pitfalls of diluting the Toyota Way.
The culture at a Toyota plant in Georgetown, Kentucky is not identical to that of a Cambridge, Ontario, plant, nor is it the same as the culture in Jakarta, Indonesia. Each plant has certain unique cultural elements based on its specific context, as defined by its history, locale, leadership, and people.
However, while local culture certainly is a strong influence in the company's widespread global branches, Toyota has developed certain core principles that must be present in every Toyota operation regardless of location.
In this chapter, we summarize the human systems model around which this book has been organized. At the center of the model is the people value stream, which is essential to understanding why the Toyota Way has met with such unprecedented success. We believe that the X-factor in Toyota's ongoing success is the way Toyota develops people to not only do their jobs but to think deeply about problems and become committed to the Toyota value system.
The Missing People Value Stream
The concept of a value stream has become a common part of the vocabulary of organizations that want to improve. "Value stream mapping" may be the most used lean tool, and it can have a powerful effect on a team's ability to understand how much waste is produced in the total process of converting raw materials to finished goods.
In value stream mapping, the product's path is followed from raw material to finished goods, documenting both value-added processes and wasted steps. Value added is defined as when the part is physically being transformed to what the customer wants. Any activity that costs time and money and does not add value is defined as waste.
Value stream mapping helps team members understand how the product flows and identify the wastes in the process. For example, is it being moved about from place to place? Is it sitting in inventory? Are there quality problems creating the need for rework?
We can use this methodology on a conceptual level to understand the people value stream. In value stream mapping, there are process boxes in which value is added, and between these process boxes are inventory triangles that represent waste. It is typically found that the greater part of the life of a product is "waste" as it is being moved someplace or sitting in inventory. Imagine if you had the time to map a person's entire career, starting with when they first joined the company.
For our purposes, value is added when the person is learning and being challenged. These periods are shown as the process boxes, while every hour spent not learning is represented by inventory triangles -- waste.
A person's work may be productive, but for our people value stream, if the work does not contribute to learning and development, it will be classified as waste. We would probably expect that most of the careers mapped would exhibit a lot more waste than value-added development.
After all, most of us spend a fair amount of time doing routine work, taking breaks, or sitting in ineffective meetings. We suspect this is true at Toyota as well, but we believe a significantly larger portion of time at Toyota brings to its members value-added learning and development.
Even on the shop floor, workers who perform routine production tasks spend a great deal of time in training where they are taught the higher-level skills of their jobs. They learn multiple skills such as problem solving and group development and practice these skills regularly. They also learn more about safety and have the opportunity to become team leaders.
All of these capabilities lead to the development of an entirely new set of advanced skills.
At Toyota, the term "system" is used quite often, and the product value stream and people value stream are literally intertwined in a system that makes up the DNA of the Toyota Way. Developing people into problem solvers takes waste out of the system and leaves a leaner system in place.
Without the waste of inventory, a delay or quality problem will immediately shut down the process. This means that problems surface quickly and thus challenge team members to respond to and learn from the obstacles that they encounter on the job.
When these two value streams are connected and that DNA is reproduced, it forms the "Toyota culture," which makes it possible not only to implement but also to sustain the Toyota Way.
Problem Solving Connects the Two Value Streams
The importance of problem solving in the Toyota culture cannot be emphasized enough. It serves the very vital function of connecting the product and people value streams. If the product value stream and the people value stream make up the organizational DNA of the company, problem solving is the code that connects the two.
Without a practical and continuous problem-solving process that is used on a daily basis, there will be a gap in any company's lean transformation. Toyota emphasizes that the tools of the Toyota Production System (TPS) are designed to highlight and identify problems within its organization.
Kanban, continuous flow, and Just in Time all expose problems that one may not see otherwise. The same is true for 5S, Standardized Work, and Andon. The interplay of these systems sets company standards, thus enabling the process of identifying waste-producing, out-of-standard conditions.
For example, if we reduce the quantity of parts brought to the production line from one day's worth once per shift to one hour's worth every hour, we will notice problems with those parts much more quickly and there will be immediate pressure to solve the problems, since there is less than one hour of parts available before we shut down. The out-of-standard condition is observed more quickly, and when it is observed, the potential consequences are severe.
The key to success is to have a production system that highlights problems and a human system that produces people who are able and willing to identify and solve them. This requires team-minded people who are not only competent enough and well trained enough to identify and solve a problem, but who also trust their supervising group leader, feel safe in identifying the problem, and are motivated to solve it.
We put mutual trust at the center of [the Toyota culture] because it is instrumental in creating an environment that both encourages the identification of problems and motivates people to solve them.
Without trust in their employers, employees are reluctant to admit to the existence of problems and learn that it is safest to hide them. Now imagine a company that has not established mutual trust: A team from the front office value stream maps the process and then implements a kanban system here and some standardized work there, and even hangs an andon light connected to a cord to stop the line.
What is likely to happen? If inventory is reduced, problems will surface more quickly, but is the worker likely to pull the cord and identify the problem? Is the worker going to try and solve the problem or throw up her hands and say it is management's responsibility?
On the other hand, if problems are hidden, the entire system of continuous improvement stops functioning and the lean systems lose their value. In the Toyota Way 2001 document, there is a sub-element called "promoting organizational learning," which includes learning from mistakes:
We view errors as opportunities for learning. Rather than blaming individuals, the organization takes corrective actions and distributes knowledge about each experience broadly. Learning is a continuous company-wide process as superiors motivate and train subordinates; as predecessors do the same for successors; and as team members at all levels share knowledge with one another.
People-Supporting Processes and Daily Management
There are many systems in place to support team members as they are developing to become committed members of Toyota. One might think that developing team members is the function of the training department which puts together a schedule of classes, but Toyota's history is rooted in learning by doing what is taught on the job by highly skilled mentors
It is more of a craft-based system. Intimate daily contact is the way the apprentice is trained. Similarly throughout Toyota new hires are immersed in living the Toyota Way daily through involvement in work groups, in a clean and safe environment, with intense communication, and guided by leaders who are there to support and teach:
1. Work Groups and Team Problem Solving -- At Toyota the old adage, "All of us are smarter than any of us," is truly practiced on a daily basis. Many companies have taught problem solving and have groups that meet periodically to make improvements,
Toyota's Powerful HR
In this excerpt from "Toyota Culture: The Heart and Soul of the Toyota Way," the authors discuss how the key to success at Toyota requires a production system that highlights problems and a human system that produces people who are willing and able to identify and solve them.
By Jeffrey K. Liker, Michael Hoseus and the Center for Quality People and Organizations
Saturday, November 1, 2008
Toyota Culture: The Heart and Soul of the Toyota Way
SUPPORTING THE TWO CRITICAL VALUE STREAMS: PRODUCT AND PEOPLE
The Core of Toyota Culture Is Not Negotiable
Toyota has kept its identity as a company, including its philosophy and principles, remarkably consistent for many years. Its values of trust and continuous improvement permeate its commitment to long-term thinking, developing people, standardization, innovation, and problem solving. It is a learning organization that literally thrives on its people engaging in identifying and solving problems together and achieving results that will benefit everyone.
The Toyota Way culture is the critical ingredient in the company's organizational DNA, and it allows for constructive local adaptation of a global company at the same time that it avoids the potential pitfalls of diluting the Toyota Way.
The culture at a Toyota plant in Georgetown, Kentucky is not identical to that of a Cambridge, Ontario, plant, nor is it the same as the culture in Jakarta, Indonesia. Each plant has certain unique cultural elements based on its specific context, as defined by its history, locale, leadership, and people.
However, while local culture certainly is a strong influence in the company's widespread global branches, Toyota has developed certain core principles that must be present in every Toyota operation regardless of location.
In this chapter, we summarize the human systems model around which this book has been organized. At the center of the model is the people value stream, which is essential to understanding why the Toyota Way has met with such unprecedented success. We believe that the X-factor in Toyota's ongoing success is the way Toyota develops people to not only do their jobs but to think deeply about problems and become committed to the Toyota value system.
The Missing People Value Stream
The concept of a value stream has become a common part of the vocabulary of organizations that want to improve. "Value stream mapping" may be the most used lean tool, and it can have a powerful effect on a team's ability to understand how much waste is produced in the total process of converting raw materials to finished goods.
In value stream mapping, the product's path is followed from raw material to finished goods, documenting both value-added processes and wasted steps. Value added is defined as when the part is physically being transformed to what the customer wants. Any activity that costs time and money and does not add value is defined as waste.
Value stream mapping helps team members understand how the product flows and identify the wastes in the process. For example, is it being moved about from place to place? Is it sitting in inventory? Are there quality problems creating the need for rework?
We can use this methodology on a conceptual level to understand the people value stream. In value stream mapping, there are process boxes in which value is added, and between these process boxes are inventory triangles that represent waste. It is typically found that the greater part of the life of a product is "waste" as it is being moved someplace or sitting in inventory. Imagine if you had the time to map a person's entire career, starting with when they first joined the company.
For our purposes, value is added when the person is learning and being challenged. These periods are shown as the process boxes, while every hour spent not learning is represented by inventory triangles -- waste.
A person's work may be productive, but for our people value stream, if the work does not contribute to learning and development, it will be classified as waste. We would probably expect that most of the careers mapped would exhibit a lot more waste than value-added development.
After all, most of us spend a fair amount of time doing routine work, taking breaks, or sitting in ineffective meetings. We suspect this is true at Toyota as well, but we believe a significantly larger portion of time at Toyota brings to its members value-added learning and development.
Even on the shop floor, workers who perform routine production tasks spend a great deal of time in training where they are taught the higher-level skills of their jobs. They learn multiple skills such as problem solving and group development and practice these skills regularly. They also learn more about safety and have the opportunity to become team leaders.
All of these capabilities lead to the development of an entirely new set of advanced skills.
At Toyota, the term "system" is used quite often, and the product value stream and people value stream are literally intertwined in a system that makes up the DNA of the Toyota Way. Developing people into problem solvers takes waste out of the system and leaves a leaner system in place.
Without the waste of inventory, a delay or quality problem will immediately shut down the process. This means that problems surface quickly and thus challenge team members to respond to and learn from the obstacles that they encounter on the job.
When these two value streams are connected and that DNA is reproduced, it forms the "Toyota culture," which makes it possible not only to implement but also to sustain the Toyota Way.
Problem Solving Connects the Two Value Streams
The importance of problem solving in the Toyota culture cannot be emphasized enough. It serves the very vital function of connecting the product and people value streams. If the product value stream and the people value stream make up the organizational DNA of the company, problem solving is the code that connects the two.
Without a practical and continuous problem-solving process that is used on a daily basis, there will be a gap in any company's lean transformation. Toyota emphasizes that the tools of the Toyota Production System (TPS) are designed to highlight and identify problems within its organization.
Kanban, continuous flow, and Just in Time all expose problems that one may not see otherwise. The same is true for 5S, Standardized Work, and Andon. The interplay of these systems sets company standards, thus enabling the process of identifying waste-producing, out-of-standard conditions.
For example, if we reduce the quantity of parts brought to the production line from one day's worth once per shift to one hour's worth every hour, we will notice problems with those parts much more quickly and there will be immediate pressure to solve the problems, since there is less than one hour of parts available before we shut down. The out-of-standard condition is observed more quickly, and when it is observed, the potential consequences are severe.
The key to success is to have a production system that highlights problems and a human system that produces people who are able and willing to identify and solve them. This requires team-minded people who are not only competent enough and well trained enough to identify and solve a problem, but who also trust their supervising group leader, feel safe in identifying the problem, and are motivated to solve it.
We put mutual trust at the center of [the Toyota culture] because it is instrumental in creating an environment that both encourages the identification of problems and motivates people to solve them.
Without trust in their employers, employees are reluctant to admit to the existence of problems and learn that it is safest to hide them. Now imagine a company that has not established mutual trust: A team from the front office value stream maps the process and then implements a kanban system here and some standardized work there, and even hangs an andon light connected to a cord to stop the line.
What is likely to happen? If inventory is reduced, problems will surface more quickly, but is the worker likely to pull the cord and identify the problem? Is the worker going to try and solve the problem or throw up her hands and say it is management's responsibility?
On the other hand, if problems are hidden, the entire system of continuous improvement stops functioning and the lean systems lose their value. In the Toyota Way 2001 document, there is a sub-element called "promoting organizational learning," which includes learning from mistakes:
We view errors as opportunities for learning. Rather than blaming individuals, the organization takes corrective actions and distributes knowledge about each experience broadly. Learning is a continuous company-wide process as superiors motivate and train subordinates; as predecessors do the same for successors; and as team members at all levels share knowledge with one another.
People-Supporting Processes and Daily Management
There are many systems in place to support team members as they are developing to become committed members of Toyota. One might think that developing team members is the function of the training department which puts together a schedule of classes, but Toyota's history is rooted in learning by doing what is taught on the job by highly skilled mentors
It is more of a craft-based system. Intimate daily contact is the way the apprentice is trained. Similarly throughout Toyota new hires are immersed in living the Toyota Way daily through involvement in work groups, in a clean and safe environment, with intense communication, and guided by leaders who are there to support and teach:
1. Work Groups and Team Problem Solving -- At Toyota the old adage, "All of us are smarter than any of us," is truly practiced on a daily basis. Many companies have taught problem solving and have groups that meet periodically to make improvements,
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