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February 23, 2006
Toyota’s Victory: Harnassing the Value of Line Employees
Gary Hamel, writing in the Harvard Business Review, offers a cautionary tale what’s behind Toyota’s dismantling of Detroit over the last three decades. The bottom line? Toyota listens to and values its line workers; Detroit values its staff:
Why has it taken America’s automobile manufacturers so long to narrow their efficiency gap with Toyota? In large part, because it took Detroit more than 20 years to ferret out the radical management principle at the heart of Toyota’s capacity for relentless improvement. Unlike its Western rivals, Toyota has long believed that first-line employees can be more than cogs in a soulless manufacturing machine; they can be problem solvers, innovators, and change agents. While American companies relied on staff experts to come up with process improvements, Toyota gave every employee the skills, the tools, and the permission to solve problems as they arose and to head off new problems before they occurred. The result: Year after year, Toyota has been able to get more out of its people than its competitors have been able to get out of theirs. Such is the power of management orthodoxy that it was only after American carmakers had exhausted every other explanation for Toyota’s success – an undervalued yen, a docile workforce, Japanese culture, superior automation – that they were finally able to admit that Toyota’s real advantage was its ability to harness the intellect of “ordinary” employees. As this example illustrates, management orthodoxies are often so deeply ingrained in executive thinking that they are practically unassailable. The more unconventional the principle underlying a management innovation, the longer it will take the competitors to respond. In some cases, the head-scratching can go on for decades.
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