"Toyota's Real Secret"

John Teresko

Industry Week

February 2007, pp. 36-42

The labor productivity gap between the most-effective and least-effective North American auto manufacturers is continuing to narrow. While Toyota still holds the edge in applying lean practices, this article argues that a larger proportion of that edge is increasingly coming from lean product development practices. Increasing product variations highlight the need for product design/production collaboration increases. Toyota has moved the lessons of the Toyota Production System upstream to product development.

The article includes a list of the 13 principles of lean product development as identified by James Morgan and Jeffrey Liker in their recent book titled "The Toyota Product Development System":

1. Establish customer-defined value to separate value-added from waste
2. Front-load the product development process to explore thoroughly alternative solutions while there is maximum design space
3. Create a level product development process flow
4. Utilize rigorous standardization to reduce variation, and create flexibility and predictable outcomes
5. Develop a chief engineer system to integrate development form start to finish
6. Organize to balance functional expertise and cross-functional integration
7. Develop towering competence in all engineers
8. Fully integrate suppliers into the product development system
9. Build in learning and continuous improvement
10. Build a culture to support excellence and relentless improvement
11. Adopt technologies to fit your people and process
12. Align your organization through simple visual communication
13. Use powerful tools for standardization and organizational learning

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"Maximizing Your Return on People"

Laurie Bassi and Daniel McMurrer

Harvard Business Review

March 2007, pp. 115-123

Over the past ten years, the authors of this article have developed a set of 23 "Human Capital Management" (HCM) elements that predict performance across a broad array of organizations and operations. These elements fall into five major categories: leadership practices, employee engagement, knowledge accessibility, workforce optimization, and organizational learning capacity. A survey (included in the article) has been designed to assess an organization on its "maturity" in each of these 23 elements. Empirical research has shown that different elements have varying degrees of importance in different companies.

Under "Leadership Practices", the elements are:

• Communication—the extent to which the communication of management is open and effective;
• Inclusiveness—the extent to which management works collaboratively with employees and seeks the employees' input;
• Supervisory skills—the abilities of Supervisory management to provide feedback, remove barriers, and inspire confidence;
• Executive skills—the abilities of Senior Executives to provide feedback, remove barriers, and inspire confidence;
• Systems—the effectiveness of leader development and transition systems.

Under "Employee Engagement", the elements are:

• Job design—the extent to which the work taps the skills of employees and is well-organized;
• Commitment—employees are recognized, their jobs are secure, and the possibility for advancement exists.
• Time—Employee do not regularly suffer from quantitative work overload so they can do their jobs well and have work/life balance;
• Systems—There is a continuous evaluation system for employee engagement.

Under "Knowledge Accessibility", the elements are:

• Availability—Job-related training and information can be readily accessed;
• Collaboration—Teamwork is encouraged and enabled;
• Information sharing—Best Practices are shared and improved;
• Systems—There are good systems for collecting and disseminating information.

Under "Workforce Optimization", the elements are:

• Processes—Well-defined work processes and effective training;
• Conditions—The physical and social environment supports high performance;
• Accountability—High performance is expected and rewarded;
• Hiring—Skill is the primary hiring basis; new hires complete a thorough orientation;
• Systems—There is an effective employee performance management system.

Under "Learning Capacity", the elements are:

• Innovation—New ideas are welcomed and encouraged;
• Training—Training is practical and supports organizational goals;
• Development—There are formal career development plans for employees;
• Value and support—Leaders show through their actions that learning is valued;
• Systems—A learning management system automates aspects of training.

Findings from the survey can be used in conjunction with performance measures to identify the HCM factors that are most important in driving business outcomes. The organization should focus its HCM development efforts in these areas.

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"What It Means to Work Here"

Tamara Erickson and Lynda Gratton

Harvard Business Review

March 2007, pp. 104-112

The authors define a signature experience as "a visible, distinctive element of an organization's overall employee experience. In and of itself, it creates value for the firm, but it also serves as a powerful and constant symbol of the organization's culture and values". The concept of a signature experience grew out of the authors' research with companies having highly-engaged employees. They found a wide variety in company philosophies and practices. Over time, the authors came to be convinced that this variation was, in fact, a key part of what set these companies apart from organizations that had been less successful in engaging their employees. The organizations with highly-engaged employees excel at expressing what makes them unique. They hire people who will enthusiastically fit in to their uniqueness, and these employees are highly-engaged.

The authors identify a number of general principles that the most effective companies use for creating, supporting, and preserving their company's unique employee experiences:

• Target a segment of potential employees—The company must methodically identify individuals who would buy into the organization's culture and adapt to the way the company works
• Address specific business needs—Some companies create signature experiences that express the culture and values of the organization. GE's "work-out" might be an example
• Identify and preserve your history—Historical traditions can exemplify what the organization is all about
• Share your stories—"War stories" and tales of success and failure serve to illustrate what is valued and expected at the company
• Strive for consistency—All elements of the overall employee experience need to be aligned;
• Have the courage of your convictions—Be willing to accept that your employment proposition will not appeal to everyone

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"Applying Six Sigma to Sales and Marketing"

Michael Pestorius

Quality Progress

January 2007, pp. 19-24

The author states that Six Sigma usage has evolved from its start in manufacturing to applications in finance and information to its most recent usage in transactional processes such as sales and marketing. though there may be less control over variables in process like sales and marketing, that does not mean that Six Sigma should not be used or that the results will not have value. A small improvement in each step of sales and marketing will result in a large improvement for the overall process.

Some of the sales processes that could make use of Six Sigma are:

• Selling a product to the customer
• Interviewing and hiring successful sales representatives
• Training sales representatives on both the sales process and the various products and services about which they are expected to be experts
• Defining the most efficient way to manage a sales representative's sample stock
• Identifying and nurturing the most profitable customers and territories
• Moving marketing materials through copy review

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"Getting the Best Out of People in the Workplace"

Les Landes

Journal for Quality and Participation

Winter 2006, pp. 27-29

The author of this article argues that you cannot really motivate people, but you can create an environment that encourages them to be motivated. The author says the correct question to ask is "How can I get the best that people are willing and able to contribute to the success of this organization?"

The article identifies the following keys to achieving this goal:

• Find a match between what the organization needs and appropriate aptitudes, skills, and knowledge
• Provide clear goals, expectations, and responsibilities
• Provide meaningful rationale and benefits
• Clearly define processes
• Provide support structures
• Provide a guidance system to assure people stay on track
• Utilize constructive responsibility
• Practice patience and reinforcement

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People and Systems

John McNeil, GP
 

Teresko's article refers to Morgan and Liker's "The Toyota Product Development System: Integrating People, Process And Technology". This book and Liker's "The Toyota Way" emphasize that a most important factor behind Toyota's success is the way they develop and value people. Indeed, 7 of the 13 points from Teresko's summary focus on people development and learning. Bassi and McMurrer, and also Landes, provide us with direct indicators or drivers of motivation and performance. Why, one might almost jump to the conclusion that people are critical to organizational success. Well, "Duh"!

At GP we are "people" people, but we're also process people, and when we are looking to improve motivation and performance at our Operational Excellence group, we usually put on our process spectacles. They are the ones that enable us to see for miles and miles, across value streams, through organizational boundaries, and along time series of customer-critical measures.

This serves us well when it comes time to work on problems. As our article summaries point out, not only the source of improvement, but also the root cause of problems, can invariably be found in people. But rather than focus on people errors (learning errors, memory lapses, inconsistency, application errors, omission errors, bad decisions), we focus on the processes that guide and encourage and limit people in doing what they do. By converging everyone's thinking on the system, on routine and improvement responsibilities, on driving the value stream, we avoid dwelling on individuals' shortcomings and look instead for ways that the organization can work as a learning whole to improve performance. We jump to the conclusion that normal people in a great system can do great things, like Toyota. Well, "Duh"!

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