How Does Toyota Do It?
(A Layman's Look At Valuing an Asset) - Part
2
By Mike Brown
In the last issue we covered 4 of the 7 statements to consider when thinking
about ‘the requirement for the
vertical movement of knowledge, skills, and capabilities of the total manufacturing workforce'. Listed here are the remaining three
and some ideas about how to make an investment in your 'most valuable asset'.
Click Here if you would like to go back and
review Part 1
5. Have you ever heard the word "depreciate"? How about
the term "accelerated depreciation"? These are accounting terms for ‘quick write-off'. I think maybe that is what we have traditionally done
in our culture (with our people) - and I think what Toyota has traditionally not done. I think in real terms (not from an accounting standpoint) we
have "depreciated" or "unappreciated" our work force for the short term gain and have failed to help them "appreciate" as a resource/asset to our
companies. This is not just a company thing - we, as individual workers, have allowed, participated, and sometimes instigated this approach. We have
grown comfortable with the idea of a ‘good job' where:
-
I don't have to think;
-
I don't have to learn;
-
I don't have to be held accountable; and if I'm real lucky,
-
I don't have to work.
I just want to be ‘appreciated' and make more money. And, many
companies went along with this. Which, leads us to where we are now. Shame on whom??????
6. I think Toyota by culture, by plan, by accident, or maybe by
necessity has done many things that are very different in how they ‘appreciate/depreciate' assets (Human and Machine) in their business. They
have done many things that have driven knowledge, performance, reliability, and responsibility down to the lowest levels of the organizational
structure. And, they focus on things that ‘appreciate' (grow) the value of those assets. The result, I believe, is thousands of ‘PhD's
in Problem Solving' at the shop floor level rather than a focus on finding the right Harvard MBA for the corner office to solve their problems. They
have successfully discovered the VALUE of an ‘appreciating asset' to the overall profitability and growth of the company. Rather than
‘depreciating assets' for accounting purposes, they have gone about a ‘value appreciating' effort for both man and machine assets. What
is the true value of a machine that is 50 years old, has been well maintained, has numerous upgrades, runs like a Swiss Watch, is paid for, and
produces a quality product day-in and day-out? Is it zero like the accountants' books say or is it invaluable because I do not have to pay for the
asset in my cost structure? What about a 50 year old man that has gone through the same upgrades? His capability will not likely be outsourced.
However, if he is only capable of doing the same job he did 25 years ago and he has not been upgraded and well maintained - he and his job are at
risk in today's economy.
7. Toyota has also found ways to link compensation to "team" and
"company" performance. Individual performance is critical - it is critical to all. So a lot of the individual performance issues get worked out
on the shop floor by all those people whose compensation is riding on each other's performance. The performance and responsibility for success rides
with the people who do the work - isn't that a novel idea. The responsibility of management is to remove any impediment to their successful
accomplishment of work and to continually upgrade them to increase their ‘value-adding' performance.
How Do I
Start?
So, given all this great information, what does a CEO/GM/Plant Manager do
given he has a business to run while he changes the world? I think Toyota would probably tell you they do not have all the answers
either. However, the search for the answers is part of the way business is done at Toyota. As an average American, I am always looking for the
KIS principle (Keep It Simple). Toyota is a ‘learning organization'. That is what they do. That is part of their
business. That is why they have an innate ability to continually improve - they are getting smarter all the time. So, what are you doing
in your plant/business to help your associates get ‘smarter all the time'? Most plants have some training -usually OJT or a crash course
to fill a square of some type. How many plants feel the need or desire to continually upgrade the knowledge, skill, and capability of their
workforce - as a requirement for compensation increase?
I do not have any data that says helping someone get smarter breeds any
loyalty or longevity. But, I bet the tie between learning & responsibility and compensation & retention would have an impact on workforce
effort and performance. So, how do you implement a much needed long term cultural change in a short amount of time? You
start.
Where Do
I Start?
You start at the top, on the plant floor, and everywhere in between. You
just start. One of the Toyota giants once said: "It is easier to act your way to Lean Thinking, than it is to think your way to lean
acting." If I can paraphrase: It is easier to act your way to a "Learning Organization" than it is to learn your way to a different "acting
organization". A good leader acts - the rest of us react.
Have you ever heard of a CMMS (Computerized Maintenance Management
System)? This is a very valuable tool most companies have to maintain and improve the reliability/value of their equipment assets. Few
companies use them well. Why? No one ever took the time to ‘learn' how to use it. It costs thousands and can save millions - but
we never took the time to ‘learn' how to use it. Why? Why? Why?-because we have disconnected learning from work.
It is not ‘required'.
Learning to
Work
A visionary leader in American manufacturing will learn how to reconnect
‘Learning to Work' (where we are always working to learn). The one that does will not be free from trials and tribulations that come
with manufacturing. But, he/she will be so far ahead of the rest of the manufacturing world that he/she will much better be able to address the
issues of a ‘flattening' world economy. And the rest of us? We will be still reacting - just like when our most critical machine breaks
down (?unexpectedly?). We have the knowledge to develop a lean management system;
we just never took the time to learn how to use it.
To paraphrase a famous
quote:
"The only thing more unfortunate than
a company that does not know about lean enterprise techniques, is one that does know and fails to use that knowledge."
