The Crucial Battle
Toyota is showing record results again in the car industry both in terms of sales and operational profitability. Yet, Akio Toyoda, it’s President is quoted in several outlets saying: “Over the next 100 years, there is no guarantee that automobile manufacturers will continue to play leading roles in mobility… A crucial battle has begun — not one about winning or losing, but one about surviving or dying.”
This sounds like paranoia – and a tad histrionic.
But Toyoda also has a method about how to go about leading this battle: “This is an era in which the correct answers are unknown,” he continues. “Knowing that the customer comes first, we need to have people who understand the workplace well enough to lead with quick judgment, quick decisions and quick action through genchi genbutsu (on-site learning and problem-solving) as they see fit in response to all kinds of situations. To create forms of mobility to which people can feel intimately connected, and to be able to provide the freedom and joy of mobility to all people, everyone working for Toyota will unite in spirit and continuously take up new challenges.”
Optimism and dedication. What it says is “we have a method, we mean it.”
I’m often asked: “what’s it like to practice lean with CEOs?” the questioner usually means “how do you get them interested in workplace details and lean tools?” The truth is I don’t try. What it’s really like is a lot of observation and discussion. Observation on the gemba of how things really work, how people understand their jobs and how they solve their own problems, which is first a test of their manager’s attitude towards “bad news first” (actively being interested in people’s problems and helping them solve them) as much as a test of the person’s initiative, ingenuity, and job experience.
The discussion, however, is mostly about clarifying the challenges the company faces: what is the competitive game? Is it changing? How well are we playing it? What are we missing? What do we need to change? Where do we start learning what we need to change?
This discussion will not happen with just any CEO. Many top executives are content to chat about their past results. A few, those who get interested in lean, genuinely feel that regardless of how positive their results have been in the past, they are right now in a crucial battle for surviving or dying (the paranoia), that they don’t know what they don’t know and what the correct responses should be (reasonable enough) and that if they involve everyone in the company in better understanding the purpose and details of their jobs relating to customer satisfaction and operational processes and in coming up with new, better ways of doing things, smarter answers will emerge (the optimism). The resulting driving motivation could be called “paranoid optimism.”
Within that setting, CEOs naturally get interested in the lean tools and change activities – this is where they see their people at work both measuring better what truly happens in real life, a dialogue with reality, and also evaluating how well their own managers demonstrate creativity and a willingness to work together (as opposed to solve the problems for their own functions at the expense of their colleagues and the company as a whole). The lean tools are structured activities to reveal and manage talent.
Interest in the tools is not so much the problem. Discussing the “crucial battle” is far more difficult: What is the battle? What are the open fronts? Who are the players (many competitors are not competing firms, but competing alternatives)? Where are we strong? Where are we weak? Where do we not have a clue? What are the large knowledge gaps we need to explore? This is a difficult discussion because of a well-known cognitive bias: on its own, the mind reduces complex, messy, open-ended problems to the part it feels it can solve, so the discussion soon devolves into “how can we fix this or that existing process?” which defeats the purpose of thinking wider to look for the whole “crucial battle” battlefield as much as we humanly can. And then try practical stuff at the workplace.
Many senior executives you meet assume all is known (without realizing they do), and their focus is on coming up with the right action plan and executing it with discipline. When it doesn’t work out the way they hoped, they interpret this as a lack of managerial oomph and pressure the organization in doing the same thing more intensely.
The executives drawn to lean intuitively get that understanding the situation, “grasp the situation” in lean terms, is an every day job. We never have a complete picture and things change all the time, so we need to work at it and work at it and work at it. Execution and delivery, in this perspective, is the perfect place to hear what reality has to say – quality and delivery issues are a dialogue with reality. The reality of customers tastes and usages, the reality of material operational processes and friction. Practicing lean at executive level means finding the right problems by looking into every problem (problems first!), facingthe really hard points the company will have to pivot on, framing them in a way that everyone can understand – as Akio Toyoda does when he shifts the frame from “selling cars” to “freedom and joy of mobility” – so that everyone can participate in forming new, previously unthought-of of, solutions, and shaping them one change at a time.
The starting point to this aggressive competitive approach is nonetheless a feeling, a hunch, an emotion: no matter how good yesterday was to us, tomorrow is a crucial battle in a universe of uncertainties, not a battle about winning or losing on today’s drawn competitive lines, but a battle of surviving or dying through understanding how the lines are shifting and we must adapt for tomorrow whilst leading the company today. If you don’t succeed today, you will have no tomorrow. But if you only take care of today, you won’t have a tomorrow either. Paranoia, yes, but with the optimistic belief in developing people to face our challenges – and figuring out what they are together.