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 / Summer 2008 / Issue 51(originally published by Booz & Company)


Jeffrey Liker: The Thought Leader Interview

Mike was also told to “think about solving the problem at hand. If the problem is retention of people, we have to ask, ‘What can we do to retain our people?’” The problem-solving mentality is very keen within Toyota. If people are leaving, the solution is not to give up. It is to understand the root cause and do more to eradicate it.

In Toyota’s view, you don’t have a problem without a standard. Someone might tell his or her boss, “We’re not meeting our delivery date” or “Our meetings are not happening on time.” And the boss would say, “What is the standard? What would be acceptable lateness?” or “Why is lateness a problem? What is the result of lateness?” As long as the standards are clear, the organization can focus on continuous improvement and ultimately raise those standards. A company that wants to learn from Toyota has to learn an equally robust type of problem solving. It’s hard to imagine a company thriving that doesn’t have a good problem-solving process.

S+B: How is Toyota’s investment in people reflected throughout the organization — not just in its leadership?
Toyota has what we call in Toyota Culture a “people value stream.” It starts with selecting and attracting the right people. Within the value stream, a new employee’s first responsibility is to learn the basics of the job. A lot of fundamental skills are required to do any job in Toyota. After these basic skills are mastered, the employee should start to improve on the practices that he or she learned and on the work that he or she does. In this second stage, which could be called “engagement,” employees are actually engaged in improvement. The final step is what we call “inspire”: Employees become committed to their jobs and identify themselves in this way: “I’m part of Toyota, and I’m going to accomplish my per­sonal goals through this company.”

All of this — not just the people investments but the deep cultural organizational change required to implement lean systems — is a tall order for many Western companies. But nobody said that transformation would be easy. The demands for excellence, streamlining, and lean processes are uncompromising. They are not just business demands; they are also cultural and social. When you think about it, perhaps the most daunting part of implementing this system is that even at Toyota, the originator of lean production, it has been difficult work.

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Author Profile:

Jeffrey Rothfeder is a senior ­editor at strategy+business and a former editor at Bloomberg News, Business Week, and Time Inc. His latest book is McIlhenny’s Gold: How a Louisiana Family Built the Tabasco Empire (Collins, 2007). 
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