Friday, July 13, 2007

The Toyota Way

Here comes my second Japanese inspiration after i read the interview of Katsuaki Watanabe, President of Toyota in Harvard Business Review (HBR) July-August 2007 issue.
The first one was after seeing the Japanese movie Floating Weed, which gave birth to this blog.
While the first inspiration was romantic, people might think that Toyota inspiration cannot be so. That is what I also thought untill I finished reading the interview.

Before we go to the interview here is the success story of Toyota, which speaks for itself:
-It has overtaken GM as the largest automaker in the world. Sale expected to be 9.34 milion cars in 2007.
-Its market cap is one and half times more than that of the combined mkt cap of the Big Three of USA.
-It is the most profitable car maker. It made a profit of 13 billion$ in 2006-7, while GM and Ford made losses.
-Thomas Stewart the editor of HBR says " Toyota is the best car maker on the planet"

How did Toyota achieve this?
It is by the Toyota Way.
What is it? Watanabe has explained this in the interview.

It is " Continuous improvement( Kaizen) " and "respect for other people"
Kaizen is, of course, well known. The respect for other people comes out clearly in the interview. Watanabe has quoted his juniors in some parts of the interview " As our vice president said..".
Normally it is the juniors wo quote the boss. So it is not just preaching but practice. Watanabe says "there is no genius in our company". He means team work.

The root of the Toyota Way is to be dissatisfied with the status quo. If the rate of change by continuous improvement is slow, the Toyota people resort to revoltionary change or radical innovation called as Kakushin. While there is continuity in Kaizen, there is discontinuity in Kakushin.

Toyota employees are "T" type people. The vertical stroke is for deepening and intensity, while the horizontal top is to widen horizons. So they employment is for long term to deepen ( It takes 20 years to produce a T type manager) and the managers are allowed to switch jobs to learn other things. There are 2000 coordinators to train the employees around the world in the Totota Way.

Watanabe's approach to BRIC countries is a sample of the Toyota Way of thinking.
He has no plans to compete with the herd in the fast growing markets of China and India for low-cost vehicles. He says " As people in BRICs look for better cars, as roads are built and as energy efficiency becomes more important... we should let the market come to us ".

What is the vision of Watanabe for a dream car?
To produce cars that can excite,entertain and evoke emotions...
oops... this is romance... passion...

My admiration for Toyota and the Japanese have gone up. But of course it does not diminish my passion for Latin America. This reminds me of the Brazilian Japanese ( about a million in Brazil) who have been assimilated in Brazil in the last about a hundred years. How does the japanese police detect illegal Brazilian japanese in japan. During midnight patrolling of streets if they come across a house with loud music and partying noise.. Caramba.. here they are !

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