“How Toyota became #1.” A book that has great tidbits for any manager or owner. David Magee, the author, talks about the various ideologies that are ingrained within the Toyota culture. The Toyota Production System (TPS) which cuts waste and improves efficiency, is a large part of Toyota’s success. Every employee is expected to help improve every aspect of the business. If a suggestion is implemented they will receive between $5 and $2,000 depending on the value of the suggestion. In 2005 99% of employee suggestions were accepted, which totaled to almost 600,000 accepted suggestions.

“Dig deeper into Toyota’s history and one finds steady growth, much-better-than-industry-average shareholder returns, off-the-charts consumer loyalty ratings, and some of the happiest employees in the world.”

- David Magee

Not every company can implement the same concepts. Ford tried to create a new inventory system that was supposed to surpass Toyota and failed because they didn’t have the infrastructure. Toyota uses the pull technique when building cars, which means they only build as many cars as their customers demand. Toyota actually had to change their system somewhat in America because customers buy their cars off the lot. In Japan they are ordered then built for the customer – the customer pulls for the car and Toyota builds it. In America they had to build cars to sit on the lot, but they still only build to fill that next space that was taken by a customer. Ford uses the push technique – they build the cars then push them out to the dealers. The dealers have to sell them and if they can’t sell them fast enough they go on sale, which means less profit.

Ford thought they could implement the TPS system into their factories because it worked for Toyota. They didn’t look at their strengths and try to implement a concept that would fit in with their culture.

Understanding The Company’s Culture

Businesses bring in consultants that spit out ideas that have worked for other companies, but don’t tailor the ideas to the company’s culture. The excitement and money flows through the organization, at first, but eventually everything goes back to the way it was because they weren’t ready for such a shake up.

Working happy is so much more than refining a perfect system like Toyota’s; it’s understanding the culture of the the employees. When Ford tried to implement a TPS system, it shocked the employees. They were probably overwhelmed and they didn’t understand how to make it successful. My guess is they were probably told to do something a certain way, but never understood the reason behind it. They didn’t understand why and how it would help. I’m not sure about Ford’s commitment to their employees, but it did fail and it’s probably due to a lack of communication. A company’s poor communication is one of my biggest pet peeves. Every company I ever worked for rarely told me why we were making certain big decisions. They just did it and expected us to follow.

The world is evolving and businesses have to adjust their manager-employee relationships. A company like Toyota who shares their vision with their employees and gives them the ability to improve the company at every level will only get stronger. The employees understand what direction the company wants to head in and can make decisions accordingly.

“The Toyota system is teaching people to think [for] themselves and find a better way to do the job…to take individual ownership.”

- Dennis Cuneo from How Toyota Became #1

Companies have studied Toyota since the 1970’s and still have trouble implementing their ideas. I believe they don’t get the same results because they don’t look at their company’s strengths. They don’t customize the ideas to fit their own company’s culture. They want concepts that they know will work, but the problem is that these patchwork ideas don’t fit because they aren’t built for their company.

Make Small Changes

My suggestion to struggling companies is to start small and make changes in increments. Create a philosophy that doesn’t revolve around money. Focus on the employee then improve from there. Employees that understand why they do what they do and enjoy doing it will make profits.

“Simply put, winning means listening to and responding to the customer, not just telling them what they need or should want.”

- David Magee

I’ve owned a Toyota Corolla and loved it. It lasted until 204,000 miles. It’s still is my most cherished vehicle in my fifteen year driving span. I would buy another Toyota in a heartbeat and that’s the loyalty companies strive for and Toyota has achieved throughout the world.

Toyota is #1 in the car making world because they empower their employees to make their work better. GM, Ford, and Chrysler don’t even come close to creating the enjoyable work environment that Toyota has accomplished. Not every employee fits into their culture, but the ones that do thrive. Toyota doesn’t force their ways on the American employees. For instance, in Japan, Toyota has a morning exercise routine for all their employees. They tried to implement an exercise routine for the Americans and they resisted so Toyota canceled it.

Toyota’s Excellence

Toyota adapts to what the customer wants as well as the employees. There are many companies that try to do the same thing, but fail to make both happy. Toyota understands that they must create a mutually beneficial relationship with their employees, customers, and suppliers to continue their success. Toyota has built cars for over 50 years without an employee strike. They also work with suppliers to reduce costs when needed, looking for a solution that benefits both parties.

The book is well worth the read and shows the accomplishment a company with a long-term vision that doesn’t just focus on profits, but on the customer’s satisfaction.

The author David Magee was kind enough to answer a couple of questions. Tomorrow I will post the short interview.

The questions he answered was…

1. Toyota has a knack for encouraging their employees to stay engaged by empowering them to improve the company. Why do you think American companies struggle to implement such a process?

2. In your book you write that Toyota thinks about long term instead of short term gains. How do you think America companies can change their culture to embrace the long term value instead of quarter to quarter success?

So check back in tomorrow and see how he responded.

You can also check out his book at Amazon or go to his website.

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Check out the short interview here:

How Toyota Became #1 and a Peek into the Short Interview with the Author

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Creating social networks within your organization will improve communication. You’ll be encouraging a “village community” atmosphere instead of cliques (separate groups) who only visit each other when they need something.

Your company can try implementing a social friendship plan. You can do this by rotating various departments to help each other work on tasks or come up with new ideas and systems. If you want your company to foster relationships, you need to create a spider web of connections that help everyone support each other.

This is different from cross-training because you are trying to create new friendships and networks that will help get around some of the red tape as well as construct a friendlier atmosphere.

You don’t want people just hanging out like it’s a mini-party and dragging down the productivity of a department, so you’ll have to figure out the best way to encourage work. You’ll probably want to foster a Teacher-pupil relationship, having the “teacher” show the various tasks that go on throughout a day. You’ll probably be surprised by how much work gets done because the teacher wants to show the pupil how intriguing or intricate their job can be within those few hours.

Creating a Village Solution

Everyone in the company should rotate around the various departments, until everyone gets a larger idea of what the other department does throughout a day.

Small Company

If you have a small company with under ten people, then try a rotation of partnerships every Wednesday morning for an hour, until everyone has had a chance to work with each other. The best way to do this is to pick half the company to rotate to another person’s job. When their time is up then switch the rotation. It should take less than two months and only 9 hours of time. You may think that it will hurt your bottom line because it’s one less hour that they are working on their task, but you must think long-term. The health of a company depends on its relationships and if a small company can stay close-knit then you’ve helped create a team that will assist each other when they are in a bind.

Medium Size Company

If you have a medium size company, between 11 – 500 employees then try rotating between three of the closest related departments.

For instance:

• Put sales with marketing and production

  • Sales needs to understand the message that marketing is putting out to the public. They also need to understand where the product/service comes from so they know how to explain the features and benefits.

• Put marketing with upper management and sales

  • Marketing needs to understand the direction that management wants the products/services to go in to create their message. They also need to understand what is working and what isn’t by communicating with sales.

• Put accounting with creative people and marketing.

  • Accounting needs to understand what the creative people have in mind, so they can explain what the budget looks like for the upcoming projects. They also need to understand the money that marketing spends and what they can do to make their money stretch farther.

By putting the departments together that have the most to learn from one another then you can create open lines of communication. You can also do this with large companies, if you feel like it would benefit the organization. People want to work together for the greater good of the company. It’s up to management to make sure that it happens.

Large Company

If you have a large sized company (greater than 501 employees) then try rotating people within their own department. A Sales department can be filled with 1000 or more people. Everything is so specialized that they might not even know what one of their co-workers is accomplishing. It will foster learning and a little competition.

By rotating a department around you can open social networks, encouraging people who want to help each other achieve success.

Your company should encourage the employees from different departments to get to know each other. It will create friendships and loyalty toward each other. What should happen is a tighter knit group, willing to support each other instead of fighting for better position. You’ll have some grumps and kill-joys in every group, but after a short period of time communication will open.

Discuss Communication Project

The most important part about trying to implement this plan is to recap the project with the employees involved. Ask them what they liked and disliked. You can use this to adjust for the next time. When they see that you are trying to create a more open and friendlier atmosphere they will be more willing to participate.

Opening social networks should also improve company retention. People stay with a company when they feel they are a part of a family atmosphere. Over time, as the program progresses, the villagers will encourage change and adapt new ideas as they learn from each other.

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We are meant to celebrate. It’s a given right that many companies don’t use to their advantage. Every company that I’ve worked for has implemented some kind of celebration in its culture, but they were usually far and few in between.

• One company celebrated every quarter.

• Another company sporadically did it maybe six times a year.

• Another company implemented an employee happy hour.

• The largest company I ever worked for had only one celebration a year.

I had a co-worker who once told me, “We should celebrate every day because who knows if we’ll be this lucky tomorrow.”

She was right. One of us might get a new job or become sick and wish that we had the same group of people to work with. Why not celebrate in small ways to keep the morale of the whole group going?

Mini-Party Ideas

Here are a few ideas for a mini-party that will only take fifteen minutes.

• Buy ice cream for your team.

  • It’s cheap and fun.

• Celebrate a birthday with a card and some decorations.

  • Noise makers are always fun. They also let the rest of the office know that work should be enjoyable.

• Tell your team a joke

  • Getting the laughter going releases endorphins which induce pleasurable feelings, making people feel relaxed.

• Give hand-written compliments to each member of the team.

  • Making people feel special will create loyalty.

• Share a personal story.

  • Making your co-workers or employees a part of your life makes you look human and approachable, like someone they can confide in or who can help improve the work environment.

Making the Mini-Party Happen

You don’t need to celebrate every day, otherwise you’ll run the risk of creating a boring routine. I had a company that tried to implement “Compliment Friday.” We would blow up balloons and attach a thank you with each one. The first time we implemented the compliment program, it lasted three months, and eventually it faded away. We tried to re-implement the program and it only lasted for two months. It became a chore to think of some random compliments every Thursday afternoon so they would be ready for Friday morning. I tried to convince the powers that be that they should only do it once a month to build up tension and excitement, but they didn’t go for it. The program never resurfaced while I was there.

Whether you are a manager or one person out of a team of fifty, you can create a “mini-party” program if you just take the initiative. The hard part isn’t getting anyone on board, but finding someone on the team willing to take control to make sure that it doesn’t become a stagnant process.

If you are the manager I suggest that you rotate turns on your staff (and that includes you, too). You can create a sign-up sheet with your name at the top of the list. You’ll probably have a few that will sign up right away. Try to encourage everyone to participate, but don’t push anyone to do something that they don’t want to. Make sure that you allow them a small budget, so they can purchase mini-party materials if needed. Then see what happens. If they don’t take to it very well then you probably have to start creating a little motivation for them to do it. Like all great coaches, you will need to build up the event as something that everyone is looking forward to or create a little peer pressure for everyone to join in. If they still don’t participate then remind them that it’s something that should be fun and it’s a part of their job. There is only so much you can do with a downer, and if they fail to come through then leave them off the list in the next rotation and just document it in their file. This will probably only be a select few because most people want to create a fun environment.

Mini-Party Rules

Always make rules depending on the team. If you have a team that gets carried away make sure that the party only lasts for a half hour. If your team doesn’t want to convene in one place, make sure that they understand that they have to at least attend for a few minutes before they go back to work. Every team will require individual rules that help them understand the “mini-party” system. Some teams will want to do it every week. Some may only want it once a month. Regardless of that you decide to implement, make sure you are consistent. It will make the difference between success and failure.

If you aren’t a manager and you want to implement such a program, you will probably do it by yourself for the first few weeks or months, but eventually people will start joining in. I’ve seen an employee that always threw mini birthday parties for her co-workers and when she left the rest of the team began chipping in because they wanted to keep the tradition going. It was nice to see how close they had become because of one employee. Her department was one of the few teams that didn’t have high turnover.

Work Productivity Will Improve

Whether you are a manager or an employee, you can implement a mini-party program and start reaping the rewards. You’ll eventually start seeing a community of employees working together to make the mini-party an event that everyone wants to be a part of so they can feel connected to the group. It won’t happen overnight and it will probably take a few months to become a part of the culture, but once it does you’ll see improved productivity and happier employees.

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