Illustration by Lars Leetaru
Sam Walton discovered the advantages of centralized checkout counters by taking a 500-mile bus trip to visit a competitor in 1951. In the 1960s, Taiichi Ohno, the father of the Toyota production system, trained his managers by having them stand in a small circle on the factory floor for eight-hour stints simply observing the manufacturing process. Today, Jeff Immelt, CEO of GE, spends 60 percent of his typical 100-hour workweek on the road.
Great leaders understand something that is often lost in today’s world of global connectivity, where a surfeit of data is accessible with a few keystrokes. Computer-generated reports certainly play an important role in management, but the critical, visceral insight needed for effective leadership can come only from firsthand contact. The best executives get out of their offices and away from their computer screens to observe their frontline employees, competitors, customers, and suppliers on the job.
Most business gurus tout cleverly titled management concepts while ignoring this relatively simple practice. Pick your program: Lean Six Sigma, Servant Leadership, Strategic Sourcing, Disruptive Innovation. This list of possible strategic business initiatives has a lot in common with the diet books forever topping the bestseller lists. Each promotes itself as a silver bullet; most deliver benefits, but rarely to the extent advertised; and few prove sustainable over the long run. Diet fads and management fads alike offer recipes for success but rarely get at the fundamental changes needed to deliver more than temporary improvement.
In the case of weight loss, medical science has shown that exercise, not dieting, offers the key to sustained improvement. Exercise burns calories but, more important, it builds muscle mass and fundamentally improves the body’s metabolism. With exercise, any number of diets can produce good results.
We believe that in business management, the analog to exercise is firsthand observation. Executives and companies that have ingrained a culture of face-to-face, on-the-spot problem solving have a superior “metabolism.” They create products and services that solve real customer problems, adopt ideas from others and make them their own, collaborate with suppliers to eliminate waste, and engage the hearts and minds of their entire workforce. Their new “diets” stick, and improvements last.
To get the most out of a regimen of firsthand observation, consider the following principles.
Go and See
No company embraces the principle of firsthand observation more than the Toyota Motor Corporation. A philosophy of genchi genbutsu, literally translated as “go and see,” permeates the organization from the manufacturing floor to product development and even corporate staff functions. Toyota’s executive in charge of real estate visited every single property now in Toyota’s vast global portfolio of land and buildings before approving any of the investments.
The chief engineer for the 2004 Sienna minivan had never designed a vehicle specifically for the North American market, so he set out to drive in all 50 states and every province of Canada and Mexico. The insights he gained on his trip led him to redesign the popular minivan, making it bigger but easier to handle, at a price US$1,000 lower than the previous version. His observations of North American driving conditions led to enhancements of the turning radius and side-wind stability. The team also expanded the number of cup holders and storage pockets, pointless in the Japanese market where trips are shorter and riders rarely eat in the vehicle, but popular with Americans.
A culture of on-the-spot problem solving dates back to the early days of Toyota and its founding family. According to company lore, Toyota founder Kiichiro Toyoda once reprimanded a factory worker who was bemoaning the failure of his grinding machine. Toyoda rolled up his sleeves, pulled a handful of sludge from the oil pan, and challenged the worker to solve his own problems by getting his hands dirty. To this day, Toyota managers develop deep expertise over their careers and are expected to be true experts of the domains they manage.