andon, kanban, kaizen

The open secret of success: Toyota turns the concept of innovation on its head, shares it and still wins

Excerpt:

According to Matthew E. May, the author of a book about the company called “The Elegant Solution,” Toyota implements a million new ideas a year, and most of them come from ordinary workers. (Japanese companies get a hundred times as many suggestions from their workers as U.S. companies do.) Most of these ideas are small — making parts on a shelf easier to reach, say — and not all of them work. But cumulatively, every day, Toyota knows a little more, and does things a little better, than it did the day before.

The system doesn’t necessarily preclude missteps — in 2006, Toyota ran into a series of quality problems — and it’s possible that the focus on incremental innovation would be less well suited to businesses driven by large technological leaps. But, on the whole, the results are hard to argue with. They’re also phenomenally difficult to duplicate.

In part, this is because most companies are still organized in a very top-down manner, and have a hard time handing responsibility to front-line workers. But it’s also because the fundamental ethos of kaizen — slow and steady improvement — runs counter to the way that most companies think about change. Corporations hope that the right concept will turn things around overnight. This is what you might call the crash-diet approach: starve yourself for a few days and you’ll be thin for life.

The Toyota approach is more like a regular, sustained diet — less immediately dramatic but, as everyone knows, much harder to sustain. In the 1990s, a McKinsey study of companies that had put quality-improvement programs in place found that two-thirds abandoned them as failures. Toyota’s innovative methods may seem mundane, but their sheer relentlessness defeats many companies. That’s why Toyota can afford to hide in plain sight: It knows the system is easy to understand but hard to follow.


Comment: Good read.