Toyota success driven by contradictions

EXTREME TOYOTA
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By now, most of us figure we understand what makes Toyota Motor Corp. so successful. We've heard about - and Canadian companies have copied - its just-in-time inventory control, continuous improvement approach, and kaizen becoming a familiar word. And, awed by the fact Toyota can let any employee stop its production line to avoid producing defects, our companies have more cautiously tried to empower workers.


But after six years of research into Toyota, with unprecedented access to its people and plants, three professors at Hitotsubashi University, one of Japan's top business schools, have decided Toyota's secret is more complex than has been assumed. Indeed, they found it like peeling an onion but never getting to the centre.


There are six operating contradictions the researchers teased out and highlight because they seem central to Toyota's success:


Moving gradually and taking big leaps: The company known for slow, tortoise-like improvements, through kaizen, also took a grand leap forward for the auto industry with the hybrid car Prius.


Cultivating frugality while spending huge sums: Toyota's penny pinching rivals that of Wal-Mart Stores Inc., from its humble headquarters to its very low dividend payouts to paying executives on the low end of the compensation scale. But it is not shy about spending large sums on research and development, manufacturing facilities, brand equity, dealer networks, and human resources development.


Operating efficiently as well as redundantly: Toyota is the epitome of operational efficiency in many ways despite activities, such as big meetings, staff deployment, and the "up-and-in" policy, that would be considered inefficient.


Cultivating stability and a paranoid mindset: The company has experienced stable growth for 50 years and is known for its enduring cars, such as the Corolla and Camry, that maintain an image of stability. But its executives thrive on paranoia, constantly issuing messages about not being satisfied, and seeking Utopian goals. For instance, chairman Hiroshi Okuda has called for building a car that can make the air cleaner as it runs and can travel from one coast of North America to the other on one tank of gas.


Bureaucratic hierarchy while allowing dissent: The company is very hierarchical but, throughout the ranks, people speak up, confident that constructive criticism will be welcomed.


Maintaining simplified and complex communication: A web of networks aims to connect everybody, but the company expects communications themselves to be simple. This is exemplified by the use of a single 11-by-17-inch sheet of paper as a simplified format for presentations, forcing people to think through and focus their message.



http://www.theglobeandmail.com/servlet/ArticleNews/freeheadlines/LAC/20080806/CABOOKS06/business/ROB_Managing

Shows why Toyota is so difficult to emulate.

Fan

wtf
this just scrambeled mah brains XD
lol never looked at it like this lol

This goes to show Toyota isn't just a company with company policies. Obviously it is but its more than that. Its a culture and mentality, it runs deeper than a building with walls and people in it that just come and go day in and out. Its a cultural way of thinking. I think others can adapt but only can do so much. Cause like I said its not only a sub-culture in Japan (Toyota) but also its Japanese culture as well. :thumbsup:

This goes to show Toyota isn't just a company with company policies. Obviously it is but its more than that. Its a culture and mentality, it runs deeper than a building with walls and people in it that just come and go day in and out. Its a cultural way of thinking. I think others can adapt but only can do so much. Cause like I said its not only a sub-culture in Japan (Toyota) but also its Japanese culture as well. :thumbsup:

I agree. It sounds like what is being described is the particular -- and perhaps even a bit peculiar -- corporate culture of Toyota. Any large, successful organization, if studied closely enough, will have seeming peculiarities in their cultures also. I am sure that Coca-Cola has its own particular culture different from Pepsi; Volkswagen has its own particular culture different from Ford or GM of Europe; and BMW has its own particular culture different from Mercedes-Benz.

Moving gradually and taking big leaps: The company known for slow, tortoise-like improvements, through kaizen, also took a grand leap forward for the auto industry with the hybrid car Prius.This sounds like a confident company that knows when it can afford to take risks. Do not take risks if you don't have to, but doing so occasionally -- if it is in line with your corporate vision and where you believe the world is going -- may pay big dividends.

Cultivating frugality while spending huge sums: Toyota's penny pinching rivals that of Wal-Mart Stores Inc., from its humble headquarters to its very low dividend payouts to paying executives on the low end of the compensation scale. But it is not shy about spending large sums on research and development, manufacturing facilities, brand equity, dealer networks, and human resources development. The richest people are those who know how to save a penny. And by saving all those pennies, you then have money to spend on what counts, and as a automotive company, you spend it on automotive research and development.

Operating efficiently as well as redundantly: Toyota is the epitome of operational efficiency in many ways despite activities, such as big meetings, staff deployment, and the "up-and-in" policy, that would be considered inefficient.This sounds like a cultural peculiarity. Toyota seems to be an organization run by consensus. It would be difficult to achieve consensus without large meetings. Why question it? It obviously works for Toyota, and that is what counts.

Cultivating stability and a paranoid mindset: The company has experienced stable growth for 50 years and is known for its enduring cars, such as the Corolla and Camry, that maintain an image of stability. But its executives thrive on paranoia, constantly issuing messages about not being satisfied, and seeking Utopian goals. For instance, chairman Hiroshi Okuda has called for building a car that can make the air cleaner as it runs and can travel from one coast of North America to the other on one tank of gas.If keeping employees on their toes and looking over their shoulders is considered to be paranoia, then be it. Perhaps that is what has made it possible for Toyota to achieve stability, because everybody is constantly looking at what the competition are doing and what the public wants, and so Toyota is able to constantly keep the Corolla and Camry current with what people are looking for.

I do not consider the Utopian goals to be a sign of paranoia; I consider that to be a vision that keeps everyone actively focused on the same goal. Any large organization needs this, otherwise it would sink into complacency, and what happens when a car maker slips into complacency? It becomes GM.

Toyota has this "across North America on a single tank of gas" vision. Hyundai has the vision of breaking into the world's Top 5 car makers. Volkswagen has the vision of becoming #1 by 2018. Who are we to question these visions? It matters not what the vision is; it only matters that the organization has a vision that can rally the troops.

Bureaucratic hierarchy while allowing dissent: The company is very hierarchical but, throughout the ranks, people speak up, confident that constructive criticism will be welcomed.A set hierarchy is a Japanese cultural trait. Allowing everyone and anyone to speak up and speak out may not be, but it obviously works for Toyota, and is part of the policy of consensus decision-making.

Maintaining simplified and complex communication: A web of networks aims to connect everybody, but the company expects communications themselves to be simple. This is exemplified by the use of a single 11-by-17-inch sheet of paper as a simplified format for presentations, forcing people to think through and focus their message.In an organization as large as Toyota, even with its "speak up" policy, how is the little guy on the production floor in Cambridge, Ontario going to be heard by the President in Toyota City, Japan, if there are no formal communications channels that allow the little guy to be heard? Formal communications channels and policies can also make the message easier to understand and digest: focus on what you want to say.

Maintaining simplified and complex communication: A web of networks aims to connect everybody, but the company expects communications themselves to be simple. This is exemplified by the use of a single 11-by-17-inch sheet of paper as a simplified format for presentations, forcing people to think through and focus their message.
so no powerpoints with endless animations and sound effects? haha