MSNBC on 24 April 2007 reported: “through a shrewd combination of investing in environment-friendly vehicles, offering sharp new models and wooing drivers with brand power, Toyota has toppled GM from the top global sales spot for the first time ever.”
Harvard Business Review, June 2008, reports on “Contradictions that Drive Toyota’s Success.” (by Hirotaka Tekeuchi, Emi Osono, and Norihiko Shimizu) “Toyota Motor Corporation has become one of the world’s greatest companies because of Toyota Production System (TPS)…enables the Japanese giant to make the planet’s best automobiles at the lowest cost and to develop new products quickly.”
What is Toyota’s secret?
Reaching for the stars—Toyota sets “near-unattainable goals.” For example, “consider the company’s strategy: Meet every customer need and provide a full line in every market.” This runs counter to Michael Porter’s strategy of “choosing what not to do.” Additionally, Toyota’s goals are “purposely vague” to force exploration, innovation, and collaboration to meet them.
Consider the goals stated by Toyota’s president, Katsuaki Watanabe:
“Build a car that makes the air clean [not just less dirty], prevents accidents [not just reduces accident’s], makes people healthier and happier when they drive it [not just a car that gets you from place to place], and gets you from coast to coast on one task of gas [not just incrementally improving gas mileage].”
Have you ever seen anything like these goals in your organization’s strategic plans?
I highly doubt it. But imagine how your enterprise would change culturally and competitively overnight if you did!
Of course, Toyota’s strategy of Kaizen—continuous improvement—is part of their unending desire to succeed and not be satisfied. They view improvement as not something you achieve, but as something you continuously strive for.
We can apply Toyota’s reach goals and Kaizen philosophy to making enterprise architecture planning more effective too. We need to stop conveniently “planning” on things we are working on now or for which we have a head-up that are just around the corner. Sure it’s easy to plan with 20-20 hindsight and it helps us to achieve our unit and individual performance plans and gets inappropriately recognized and rewarded, but this is really a short term outlook and not one that will drive organizational success. Instead, like Toyota, we need to set goals that are stretch goals for the organization, and which make us go beyond our comfort zones, so that we can truly work to break out of the box and differentiate ourselves and our organization from the status quo and the limits of our imagination. Setting the bar truly high and then not settling for anything less than continual improvement is a long term strategy for success and one that needs to be genuinely encouraged and rewarded.
Here’s another important aspect of Toyota’s success:
Employees are highly valued— “Toyota views employees not just as pairs of hands, but as knowledge workers.” Ideas are welcome from everyone up and down the organization. “Employees have to operate in a culture where they constantly grapple with challenges and problems and must come up with fresh ideas…when people grapple with opposing insights, they understand and come up with effective solutions.” In fact, at Toyota, “employees feel safe, even empowered to voice contrary opinions and contradict superiors.” There is a culture of open communications, and a tremendous value is placed on personal relationships and networking. Additionally, value is placed not on results, but for “how much trust and respect the manager has earned from others,” and “refusing to listen to others is a serious offense.”
This concept of valuing employees and listening to them can shed light on how we need to develop effective enterprise architecture and sound governance; whereby, we provide all major stakeholders a voice at the table–to participate in and influence planning, decision making, and innovation. This is the way to achieve higher returns and lower risks. We need to stop planning and making decisions on the whims of the few or based on gut, intuition, and politics. We must cultivate information sharing, collaboration, and elevate people as the quintessential element of our enterprise’s success.
“Toyota’s culture…places humans, not machines, at the center of the company. As such, the company will be imperfect, and there will always be room for improvement.”
People are flawed, but our endeavors make us great!