The Toyota Way: Take Time to Study, Then Implement with Speed


I like the way that David Magee, the author of “How Toyota Became #1:  Leadership Lessons from the World’s Greatest Car Company”, opened the ninth chapter of his book with the statement “making decisions is not nearly as important a making the right decisions.”

This statement is an encapsulation of the theme of the chapter, which is a description of the typical Toyota decision-making process.   It is based on collected facts, which take time to gather and properly assess.   This means that its decisions are not hastily made based on individual opinions.   However, this does not mean that Toyota is a conservative company that moves slowly.    After all the time is taken to gather facts and reach consensus, Toyota moves more quickly to implement those decisions than its competitors do.

1.  Move Forward Step by Step

Although Toyota entered the American market in 1957, it was only when it introduced its first vehicle designed specifically for the American market, the Corona, that the company starting becoming recognized for its well-built and reliable cars.    The Big 3 American car manufacturers took notice of Toyota as perhaps carving itself a niche in the American market, but they didn’t consider them as serious rivals on the same par as themselves.

However, by 1975, Toyota had passed Volkswagen to become the leading U.S. import.    Political pressure from the U.S. government to the Japanese government about the Japanese trade deficit with the United States led to pressure in turn on Japanese manufacturers to start building their products in America.    Toyota was not sure if its practice of kaizen or continuous improvement, which was nurtured in the national character of Japan and the regional character of Toyota’s headquarters in Toyota City, would translate to manufacturing facilities on American soil that were manned by American workers.

The way that Toyota researched and implemented the decision to create manufacturing plants in America can serve as an illustration of Toyota’s decision-making methods.

2.  Gather Facts Firsthand

 

The Toyota Way: Learn the Customer, Live the Customer


In the ninth chapter of his book “How Toyota Became #1:  Leadership Lessons from the World’s Greatest Car Company,” David Magee talks about always aligning a company’s strategy with the business case, meaning the fulfillment of customers’ needs.    One of the ways to do this is not to presuppose that you know what the customer wants:   you have to actively listen to the customer.

1.  Avoid Hubris

The nineteenth-century self-help expert Samuel Smiles, who inspired the original founder of Toyota, Sakichi Toyoda, believed in “business through humility.”   Another inspiration for the Toyota family, W. Edwards Deming, believed in management principles that were focused on the customer.

If you look at Toyota’s vehicle lineup, it’s pretty stable with new models occurring infrequently, but improved upgrades of the existing models occurring frequently.   This is because products are developed with direct customer research and input.

One of the times Toyota departed from this strategy was Project Genesis, where it developed models intended to attract more youthful buyers, based on Toyota’s internal beliefs about where the market was going rather than on marketplace research.   All three products within Project Genesis were canceled within five years.   The company ended up retooling Project Genesis as an independent brand called Scion that was launched in 2003.    This time Toyota learned its lesson, and recognized that significantly more market research was needed to better understand young buyers, in the same way that it had done significant market research to understand its original mainstream customers and then its luxury customers with the Lexus brand.

2.  Take to the Streets and Observe

The Toyota Way: Favor Long-Term Strategies over Short-Term Fixes


In this seventh chapter of his book “How Toyota Became Number #1″, David Magee talks about a key element of Toyota’s success, that of favoring long-term strategies over short-term fixes.   The pursuit of short-term goals is hardwired into management when their bonuses are tied to increased stock prices and quarterly profits.

1.  A Tale of Two Strategies

Now, you can say “well, it’s easy for a company like Toyota to eschew short-term fixes when they’re sitting on a mountain of cash.”   My answer to that is, “well, how do you think Toyota got that mountain of cash.  By favoring long-term strategies, that’s why!”

GM pursued unprecedented dealer incentives to meet short-term sales goals; Ford flooded heavily discounted products into unprofitable fleet sales.   And Chrysler?   I can say from my experience at Mitsubishi Motors, where I worked from 1990-2004, that they decided to follow Chrysler rather than Toyota and Honda in going towards the profitable SUV market rather than the less profitable market of hybrid vehicles.    The result?    Mitsubishi launched its new version of the SUV at a historical turning point, right before the invasion of Iraq.   When oil prices soared as a result, the market shifted away from gas-guzzlers towards more economic cars, and Mitsubishi lost the bet it had made.    There were waves of layoffs, and I ended up losing my job in the 3rd wave.    Mitsubishi bet on the wrong horse, the SUV, but the larger mistake was following the Big 3 in their pursuit of short-term profits.

Toyota has favored long-term strategies, which is not just part of their company, but is a trait of Japanese business.  For Toyota, however, this is part of the company’s cultural foundation.   Their stability comes from a long-term approach.

2.  Make Daily Decisions That Benefit Long-Term Plans

 

The Toyota Way: Raise the Bar to Unreachable Heights


In the sixth chapter of his book “How Toyota Became #1″, David Magee explains another important ingredient in Toyota’s success story, that of kaizen, or continuous improvement.    Toyota had a established its reputation in the United States with its small, affordable efficient cars.    This chapter tells the story of how they made the quantum leap to establishing a luxury division called Lexus.

1.  The Quality Lexicon of Lexus

In the 1980s, Toyota engineers were working on a project to set an entirely new standard for luxury vehicles.  Code-named F1, the project was about giving Toyota’s customers a luxury car to “graduate” into.   At that time they were not planning a new brand, but rather on building the best luxury vehicle in the world.    Toyota engineers visited the United States in 1985 to look at the preferences of American luxury-car buyers.   They learned from the mistakes that other automakers made when entering the luxury-car market.   The result of their efforts was the LS400, which made its debut at the 1989 North American International Auto Show in Detroit.

2.  The Brand

It’s one thing to build a luxury car, but how do you sell it?    Here Toyota relied on the expertise of Robert McCurry, one of Toyota’s earliest and most respected American employees.    Among his successes were the creation of a highly loyal and interactive partnership with dealers, which led in 1986 to Toyota becoming the first non-domestic automaker to sell more than 100,000 units.   He pushed for Toyota to create its first full-size American truck in 1993.

McCurry felt strongly that introducing the LS400 luxury car into the existing vehicle lineup would confuse buyers, and minimize the company’s profitability by shortchanging the phenomenal vehicle’s potential.   A luxury vehicle needed its very own brand with unique dealers and service.   Yukiyasu Togo, Toyota’s chief U.S. sales executive at the time, who spearheaded the luxury car project, agreed with McCurry.    The “Lexus” brand was launched in the United States in late 1989 with two models.   It is now the largest luxury brand in the United States, and receives more awards for quality and customer satisfaction from J.D. Power & Associates than any other automotive brand in the world.

Here’s how Lexus beat better-established competitors like BMW, Mercedes-Benz, and Jaguar:

  • Unprecedented quiet ride while maintaining stability and control
  • Elegant interior and exterior styling with highly functional controls
  • Powerful, smooth-running engine yielding better gas mileage

Despite the successful launch of the Lexus brand, Toyota executives realized that the venture had been more costly than it needed to be, and that better planning, a more streamlined development process, and better cross-communication would all be needed in future product development.

2.  Redefine Classes with Standard-Setting Products (or Service)

 

Area Governor Club Visits: 5 Best Practices To Follow


If you’ve been selected as an Area Governor, you finished the Area Governor training back in June, or you are taking the make-up training this month.    Among your duties, you are expected to do the following:

  1. Club Success Plans–ask Clubs to provide Club Success Plans, which show what goals they plan to achieve in the Distinguished Club Program and how they plan to achieve them.
  2. Provide Guidance to Clubs–contact Club Presidents monthly to discuss their progress in the Distinguished Club Program.  NOTE:  This can be done in the Area Council meetings–see item #4.
  3. Area Success Plans–take Club Success Plans and create an Area Success Plan.
  4. Area Council–hold at least two Area Council meetings each year, but optimally once a month,
  5. Area Governor’s Club Visits–visit clubs at least twice a year, and fill out and submit an Area Governor’s Club Visit Report form for each visit.
  6. Area Speech Contests–coordinate Area Speech Contest with the Division Governor and the various clubs in your Area.

This post discusses item #5, the Area Governor’s Club Visits.

BEFORE THE VISIT

1.   Get the Club Success Plan First

If you are not familiar with the clubs in your area, the easiest way to get to know the clubs is to look at the Distinguished Club Program dashboard on the Toastmasters International website for your club (all you need is the name and/or number of the club).    This will tell you how strong the club was last year.

Then you need to ask the clubs for the Club Success Plan.   In our District, we are asking the clubs for the Club Success Plan by 7/25, because the Area Success Plan is due to the Division Governor the following week, on 8/2.

2.  Arrange your Club Visit

Once you get the Club Success Plan from the Club, then make arrangements for your club visit.    It should be done by the middle of August, so you have about a three-week window to do the visit.   When you send an e-mail to the club officers asking for the best possible date for the visit, send them a copy of the Area Governor’s Club Visit Report form.   This will let them know what information you will need from them.    A lot of the information from the Club Success Plan, the goals and how they plan to achieve them, will be required for the Area Governor’s Club Visit Report anyway.

3.  Recommend the Moments of Truth Program

Recommend that the club officers get together before the club visit and do the Moments of Truth program from the Successful Club Series that they can download from Toastmasters International.   Why?   Because it tracks very closely what is asked for in the Area Governor’s Club Visit Report.   The program has the club come up with actions the club can take to improve its quality in six different areas, all of which are exactly the same six areas that are on the Area Governor’s Club Visit Report.   In other words, if the club has thought about the questions asked in the Moments of Truth program, the club will be able to answer most if not all the questions you have in your Report form.

DURING THE VISIT

4.   Area Governor Visit

Ask the club officers if there are any members receiving awards or getting any accolades for achievements on the day of your visit.   Ask if you can be the one to give the award; this will be a tremendous morale boost for the person getting the award(s).   It also shows that you are there not to “tell the clubs what to do”, but rather you are there to help the clubs and their members achieve their goals.   Ask if you get have a few minutes on the agenda to introduce yourself to the club.

AFTER THE VISIT

5.  Follow Up!

If there are any items which the club officers cannot answer at the time of the visit, then you need to follow up with them so that your report is complete.    You could go back for a second visit, but the second half of August is usually taken up by the Club Speech Contests.   So your follow up will have to be by telephone and/or e-mail.

Many Area Governors are so eager to do their visits that they try to bring the Report form with them and have everything answered at the meeting.   Trust me; it is almost impossible to do!

Once you get a draft of the report, share it with the President BEFORE you send it to the District.   If they have any additions, amendments, or dispute any of your findings, you can clear this up BEFORE it becomes “public knowledge.”

In this way, if you follow these steps, your visit will be spent more in making connections rather than your becoming a scribe as if you are auditor.    Try them and see your standing as an Area Governor rise in the eyes of both your clubs and your Division Governor!

A Tale of Two Trainings: Towards a More Effective Toastmasters Leadership Institute


As a new Area Governor, I went to the first District Executive Committee (DEC) meeting of the new Toastmasters year, which goes from July 2014-June 2015.    The DEC meeting took place in the morning, and I carpooled with someone who had to stay for the afternoon in order to go to the make-up Area Governor training.    I had gone the previous month, but rather than just sit in the cafeteria while she went through her training, I decided to join in the training and my experience led me to the revelation that is the subject of this post.

The Area Governor training I went to in June was the tradition training that District has put on in the past.   We got a huge stack of documents, each of which was explained by a lecture given from a Powerpoint presentation.

The Area Governor training I went to today was a kind of experiment.   Since all the Division Governors had completed their training in June along with most of the Area Governors, the District leadership tasked them with taking over the training of the remaining Area Governors.    Their approach was more interactive, enjoyable, and left a deeper impression than the training in June.

1.  Interactive Training

Rather than present material from a presentation, there was a brief introduction to the material of each section followed by

  • questions from the Division Governors to individual Area Governors
  • breakout brainstorming sessions where each small group would come up with items that answered the question posed by the Division Governors to each group
  • more dynamic presentation styles where the Division Governor would move throughout the meeting space, and reflect back what each person said in order to reinforce it

2.  Enjoyable

One of the reasons why it more enjoyable was because the Division Governors would break up the hour-long sessions by small, five-minute bathroom or networking breaks, or sometimes short sing-a-longs to get the group to interact in a fun way.    This increased the attention paid to the material, and started the Area Governors to interact with each other.

3.  Impressionable

The breakout sessions created a lot of input from the various Area Governors.   For example, in answer to the question “what can you do to further your club’s educational and leadership goals”, I had thought of about half-a-dozen items to answer the question, but by the time we all put our heads together, we had about two dozen items, divided into six categories.    Then one person from the group had to present their findings, or a small summary of them, to the group.

Of course the material reinforced what I had already learned in the June training.   But the June training consisted of one source of information (District leaders) dispersing to individual Area Governors, who were left to struggle with the material on their own.   Here, Division governors were dispersing information to Area Governors as individuals and as small groups.   This had the Area Governors interact with each other and reinforce the material, or answer each other’s questions.   This ultimately saved time, because in the June session, a lot of the time at the end of the session was taken up by a lot of questions from confused Area Governors.   In today’s session, we answered a lot of our own questions, and so the number of questions the Division Governors had to answer at the end of each session was a lot fewer than in June.

I just thought that today’s way of training Area Governors could be carried over into the training of Club Officers in the Toastmasters Leadership Institute.    I hope that I can get involved with the next TLI and try to use these methods to enliven and enrich the TLI that takes place in the winter of this year!

The Toyota Way: Improve Quality by Exposing the Truth


In the fifth chapter of David Magee’s book, “How Toyota Became #1″, David Magee describes the next important component of the Toyota Production System, that of not just exposing defects, but identifying their root causes.    It is only by eliminating the root causes that you will eliminate the defects once and for all.

Toyota team members are taught three core steps to ensure quality:

  1. Speak up immediately when problems are recognized, no matter what.
  2. Ask why (at least five times), to reach the root cause.
  3. Go to the source of the problem and see for yourself.

1.  Pull the Cord (or Pay the Price)

 

 

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