Excerpt from Toyota Talent – Chapter 1:

“If you want one year of prosperity, grow seeds, If you want ten years of prosperity grow trees, If you want one hundred years of prosperity, grow people.”

Chinese proverb

Chapter 1: What Can We Learn From Toyota About Developing Talent?

The Philosophy of Training and Development within Toyota

A common expression heard around Toyota is “We do not just build cars, we build people.” Every new product development program, every prototype, every quality defect in the factory, and every kaizen activity is an opportunity to develop people. When former Toyota Motor Manufacturing North American President Atushi (Art) Niimi was asked about his greatest challenge when trying to teach the Toyota Way to his American managers he responded: “They want to be managers not teachers.” He explained that every manager at Toyota is a teacher. Developing exceptional people is their number one priority. This has become ingrained in the Toyota Way as a cultural value throughout the company. It is frequently talked about in other companies, but rarely practiced.

When we think of organizations that do a great job of developing exceptional people, outside of Toyota and a select group of top Japanese companies, few large corporations come to mind. It is not that Toyota has cornered the market on developing exceptional people. Think of how many countries are able to develop world-class athletes and musicians and master chefs and artists and surgeons. There are many professions where top quality skill is a prerequisite for success. The professional skill is the commodity to be traded in the market so people make enormous investments in time and energy to develop exceptional talent. For hospitals, having consistent top talent can mean the difference between thriving and fighting lengthy legal battles. In the typical workplace of the modern corporation it is not so obvious that exceptional talent is worth investing in. The talented engineer or quality inspector or machine operator or supervisor is not out in front and center for all to see. They are somewhat hidden and large companies seem to believe they can get by without developing world-class talent.

But it is never satisfactory within Toyota to just get by. Toyota got to where they are from a small rural-based company through the exceptional talent of its leaders and engineers, team associates and supplier partners. Toyota leaders truly believe that their only source of competitive differentiation is the exceptional people they develop and that is always their top priority. And this starts on the shop floor where the value is being added when building cars each and every day.

Some might debate whether people are born with talent, or whether it is developed. Toyota’s stand is clear—give us the seeds of talent and we will plant them, tend the soil, water and nurture the seedlings, and eventually harvest the fruits of our labor. This analogy of planting seeds and growing people is a common one within Toyota, possibly tracing back to the company being founded in a farming community. Of course the wise farmer selects only the best seeds, but even with careful selection there is no guarantee that the seeds will grow, or that the fruits they yield will be sweet, and yet the effort must be made because it provides the best chance of developing a strong crop.

We consider people’s native-born gifts to be only about 10% of the total talent picture (or less). In other words, natural talent gifts account for only 10% of the full capability of an individual. Fully 90% or more of what we consider talent in the life of company employees is actually learned through effort and repeated practice. This is the essence of Toyota’s success. Begin with a good foundation— a person who has the capacity and desire to learn and then develop specific talents through repeated effort and practice.

Perhaps this idea is not glamorous or a good story for the makings of legends— the idea that with basic capability any person can become if not the greatest, at least great. We are all in awe of the greats— Babe Ruth, Michael Jordan, Tiger Woods— the few who are also blessed with pure talent and ability. It is not so exciting to go out and watch the middle of the pack players; the athletes who just work hard and perform well, but never have the buzz of greatness.

What Toyota has been able to do is gather competent and trainable people around the world, and with considerable time and effort develop high levels of talent in the masses. It is not a few star performers who make up a strong team. It is a collection of many players, each with good capability working in unison that makes an exceptional team. Toyota does not hope for the lucky draw of finding the natural talent— a rare find— they work on the known entity— the latent talent in each person who has the desire for personal growth.

In this book we will explore the process used by Toyota as the primary tool for teaching and developing this talent. It is not glamorous. It requires dedicated long-term commitment and effort. It will be hard work. It is important to see this process as much more than mere training. Training for job skills is a starting point, but the development of true talent extends well beyond this level. Understand that the foundational tool used for teaching job skills may also be applied for all other aspects of developing talent. It is the core concept for teaching and learning and thus can be applied to any situation.

In The Toyota Way Fieldbook we attempted to demonstrate the consistent applicability of the core concepts and philosophies of the Toyota production system (building on the 14 immutable guiding principles detailed in The Toyota Way) regardless of the work place in which they are applied. This same idea holds true for the core concepts of teaching and developing people. In Good to Great, Jim Collins describes this phenomenon as being similar to the laws of physics relative to scientific application of the physical laws. Collins points out that the general laws don’t really change much, but our understanding of how they operate and how to apply them has. This is a fundamental element of Toyota’s success— don’t mess with the basic principle, rather, deeply understand how to apply it in any situation. We will do our best to present the core concepts and demonstrate them in some common applications, but with some practice you will be able to apply them to any situation where there is teaching and learning.

The philosophy of developing people is so pivotal to Toyota that six of the fourteen principles outlined in The Toyota Way are related to it:

Principle 1. Base management decisions on a long-term philosophy even at the expense of short-term financial goals—Perhaps the most important long-term investment Toyota makes is in its people and the passion to keep team associates employed for their careers reflects that value.

Principle 6. Standardized processes are the foundation for continuous improvement—As we will see standardized work and job instruction training go hand in hand and long-term team associates need to learn to see waste and make improvements.

Principle 9. Grow leaders who thoroughly understand the work, live the philosophy and teach it to others—Teaching is the most highly valued skill of leaders and leaders have to deeply understand the work to teach and coach.

Principle 10. Develop exceptional people and teams who follow your company’s philosophy—Teams depend on well-trained people and part of individual development is learning to work in teams.

Principle 11. Respect your suppliers by challenging them and helping them improve—Suppliers need to have the same talent level as Toyota team associates and are developed in similar ways.

Principle 14. Become a learning organization through relentless reflection and continuous improvement—This was intentionally at the top of the hierarchy of the Toyota Way pyramid as becoming a learning organization is the highest level of organizational effectiveness.

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

Abraham Lincoln

As you begin this journey bear in mind the work necessary to tend the garden in anticipation of harvest. When growing flowers the gardener works simply for the beauty of the flower. There is no other gain for the gardener except to enjoy its beauty. Such is the case with the development of talent. Expect to work simply for the sake of the flower, and be happy with the beauty it will bestow upon you.

In Toyota all managers are expected to be teachers, developing talent in others. There is not a direct monetary benefit for working to develop people or a formal line on a performance appraisal, but the evidence of this effort is reflected in nearly all aspects of the performance of the managers’ group. If the manager does not foster a teaching environment the groups’ performance will surely suffer. Toyota has worked to create a culture where teaching others is highly valued and viewed as the key. In fact, as we will see, if people are not adequately developed the entire system will grind to a halt.

The Unfortunate Reality

For the past few decades it has become a general management trend to talk about the importance of developing people within organizations. ”People are our most valuable resource” has become part of the mission statement—a guiding principle. “Human Resources Management” has gained prominence and has become an important entity within the company (often the Vice-president of the human resources department is a powerful person in the company). Yet when we visit companies and talk to employees we find a different reality. We find people ill equipped to perform their jobs and we can see people struggling to perform even basic tasks. We try to work with supervisors to lead lean transformations and find they were promoted due to hard work and company loyalty, but lack basic skills in daily management of their work teams. We find managers and leaders who don’t have development plans, or the ability to create them, let alone have specific methods for developing people. And we are constantly frustrated by companies that see lean as a tool kit and do not understand that the main value of lean projects is in developing people who can solve problems and make daily improvements.

If people are truly the most important resource, why has so little been done to improve that asset? Could it be that managers who proclaim this “slogan” believe they are doing much more than they really are? Or is it intended to be a morale booster to make people feel as though they are a valued part of the company? If it is words alone without action, people in the company soon understand that it is merely lip service and just another attempt by management to get people to feel good about their work and hopefully work harder. “A happy cow gives more milk” is a truism, but in reality there is much more to high performance organizations than gimmicks to increase morale.

Something that is clearly lacking in many companies is an effective method for training people. We work with numerous companies and with people at all levels within these organizations. Every large company has some type of training program in a large variety of areas from technical topics to human resource topics and many these days have “lean” and “six sigma” programs. Often the training is well delivered by competent professionals who have good materials and know what they are doing. Yet, go to where the actual work is being done and ask people how they learned their jobs and you get a different picture. People have learned their jobs over time in a relatively unorganized way and the training courses are interesting but often do not have a direct bearing on the day-to-day job.

A common lament we hear is, “We don’t do a very good job of training here in the real skills people need to do their jobs.” We have heard this comment from managers who should be responsible for assessing the needs, ensuring that appropriate people are developed, evaluating the results and making adjustments to meet the needs. We have heard this comment from supervisors who have direct responsibility for developing their subordinates (and suffer as a consequence of poorly trained employees), and from line and staff workers.

One manager explained how he had to “learn the ropes the hard way,” and he felt that everyone else should have to as well. Instead of his bad experience becoming a motivation to improve, it became a model for future behavior. Not until he looked at the results of his thinking and behavior—high turnover, mistakes leading to customer complaints, daily fire-fighting, and a general sense of apathy (indicated by high absenteeism)—did he have an epiphany. By working with each individual to ensure their success, providing them with the skills needed for the job, and increasing their ability he found the path to greater success for himself. Every great leader knows that she is successful only through the success of those she leads.

Everyone it seems understands the need and can see the deficiency, but so few are willing to step up to the situation and do something about it. Why is this? Why is it so easy to recognize the importance of a well-trained workforce, but so difficult to act? Perhaps there was no effective tool (the Job Instruction method outlined in this book is that tool), or perhaps there are no “trainer types” in the group (unlikely). What is more likely, and is highly probable is that doing a more effective job of training and development really is not critical to survival in the short term, and thus is not emphasized. The current process, as limited and ineffective as it might be; “works.” People are able to get by. The work happens, jobs get done, and short-term goals are met.

Unfortunately, for most companies, managing their human assets has for years been secondary to the primary interest of the company—manufacturing, healthcare, baking, banking, construction, or transportation. Certainly people were a necessary part of the company, but in many cases were viewed as simply a means to achieve an end. Henry Ford is reported to have said: “Why is it that when I want to hire a pair of hands, a brain comes attached to them?” People were necessary for what they could do, not for what they could contribute beyond that. Thinking, creating, improving, and developing were activities relegated to the select few with a specific job title—engineer, manager, or vice-president in charge of strategic initiatives for example. Interestingly those engineers and managers were assumed to get most of their knowledge and skills from engineering schools or MBA programs and rigorous on-the-job training was lightweight at best.

The Cycle of Struggle and Firefighting

What we see in most organizations is a cyclical struggle of problems, firefighting, some short-lived relief, and on into more problems. It is a cyclical pattern— there is never a new outcome. Issues are not resolved; they are simply patched for the moment. As with most never ending circles it is difficult to determine where it begins, and how to intercede to make a change. We believe that this cycle begins with an ineffective training process, which leads to variable and ineffective results, followed by firefighting (which is totally time consuming), leaving little time for effective training, and circling back to an ineffective training process. Figure 1-1 shows this cycle.

circleFigure 1-1. Cycle of struggle and firefighting leads to more struggle and firefighting

Breaking the Cycle of Defeat to Create a Cycle of Success

Of course to break this perpetual cycle it will be necessary to cut in at some point. We believe that lack of time is not the real issue, although it may seem that way to people in the cycle of struggle. The reality is “You make time for the things you want to do in life.” So, if time is lacking, you are simply choosing to do other things, which you are ranking as more important uses of your time. The only way we can see to get off of the perpetual wheel is to step off. You must take the time (or find others who can) and invest in your future.

We believe that there are three factors that ultimately lead to a deficiency in information sharing and learning, which must be Site designed by SpiderSavvy | Kentucky Web Designed in order to break the cycle.

Lack of an effective method for defining the critical requirements of any job. It is not clear what is truly important for the successful completion of the work versus what is personal preference and may vary. For many years, engineers and other staff members have attempted to identify work requirements and document them, only to discover later that people will perform the actual work differently. Knowledge of a particular job is based on “tribal” information and many workers seem to “have their own way” of doing the work.

Whether the work is well defined or not the subsequent step of transferring the critical knowledge to others is mainly luck of the draw. If lucky, the new learner is placed with a skilled and competent trainer. This often depends on the particular job opening and availability of the preferred trainer. It is often the “best” worker who is relegated to the training responsibility, but very frequently the best worker is not the best trainer and vice versa.

Perhaps due to the previous two shortcomings there is generally limited or no follow up to verify the results of the training effort. Without well-defined requirements for a job, how would it be possible to determine the effectiveness of the transfer of knowledge? Since there is no systematic and defined method to ensure that the training process is sufficient, the results are unpredictable and inconsistent.

The cumulative effects of these three factors are similar to a calculation of rolled throughput yield. This is the yield you get from several processes in series when each one produces some quality defects. Suppose that you are 80% effective at each element. Multiplying the factor three times (.8 X .8 X .8) would yield an overall effectiveness of the process of only 51%! It is imperative that all three elements be perfected in order to support an effective training process (achieving 96% level on the three elements will yield a 90% overall result which will give you great performance).

If People are the Answer— Selecting Quality People Must be the Key

In the 1980’s when it became clear that Japanese auto companies were producing superior quality to American auto companies a common excuse delivered by the Big 3 was the “superiority” of the Japanese worker. The story line was that the average Japanese worker was somehow more dedicated, intelligent, and hard working that the average American worker. As with any excuse there is a fine line between the truth and the “whole truth.” This excuse might have been true, but the fallacy lay in the avoidance of the whole truth. The Japanese workers did not become more dedicated and hard working by luck, or even cultural difference.

Now, twenty years later we often hear the same excuse with a twist. Now the secret of Toyota’s success is attributed to the fact that they only hire the best workers and because of other extenuating circumstance Toyota is able to pay higher wages and benefits and thus attract and retain the best employees–far better than those working at other companies. Again, there is an element of truth in this excuse. Toyota does pay good wages (but not the highest in the industry or across the nation), and they are therefore able to attract and retain quality people.

The problem with these excuses is that they avoid some realities. Toyota has taken one of the worst performing plants in the General Motors system (NUMMI) and turned it into a successful operation. This was done with 80% of the original work force from GM. Toyota has also located manufacturing facilities in Kentucky, Alabama, West Virginia, Indiana, and most recently Texas. These states rank 35th, 43rd, 34th, 26th, and 24th respectively in Morgan Quinto Press’ 2005-2006 rankings of the 50 “smartest states.” Toyota has taken people from some of the lowest performing states in the country and produced incredible results (no offense to any of the states). In fact, in Japan, Toyota is mainly located in a rural area of the country where indigent farmers made up the work force during the early years. Like Jim Collins suggested, Toyota is primarily interested in work ethic. They prefer to locate where people are familiar with hard work and have the motivation necessary to learn and perform.

Grow People to Ensure Prosperity

The continuing cycle of copying and failing must stop. The only way for it to stop is to let go of the excuses and face the reality. In order for change to happen and for that change to lead to the desired result it is necessary to change our motivation. The development of highly capable people must be a genuine desire. It is not sufficient to state the desire in a vision statement or on a banner over the door. It must be a genuine interest and the motive cannot be tied directly to an ulterior motive such as short-term financial reward. You must truly have a passion for developing the most highly skilled work force and know that in doing so the financial gain will take care of itself. This is a difficult leap for many executives and even supervisors who do not see the performance of their people as being directly linked to their own success. It is much easier to complain about what is lacking and not working rather than to make the investment in change. Change is unknown. It is risky. In many cases past attempts and failures have led us to believe that future attempts will also end in the same result so we don’t try.

There is no doubt that working with people can be extremely challenging and at times frustrating. It may seem that the process of change would be easy if not for the people. The fact is that the process of change would be impossible without people. People are harder to deal with than machines or spreadsheets. They have their own opinions and feelings. The overriding philosophy within Toyota that allows them to persist in spite of the challenges is that only people are able to think, to solve problems, and to improve. People are seen as the key to expand and strengthen the company. What is needed is a full and unflinching belief that people are the key to success and acting as if that is true and then developing a system to support them in their efforts. If you say that “people are the most important asset,” and then ask, “How many heads can I cut out of the process and send packing for the unemployment line?” you are not practicing what you preach.

The world is becoming hypercompetitive and managers are struggling to keep up. Companies and smart managers are now realizing that there is an enormous pool of talent waiting to be tapped to aid in the struggle. Some are discovering that without the connection to the talent it is impossible to survive. As with all things, nothing comes without a price. Companies are finding out about the challenges of “getting people involved.” They are discovering that it is difficult to shift their thinking, and that when people are involved their feelings, opinions and perceptions are involved as well. They attack this with various human resource programs focused on communication methods and time management methods and ways to improve the work environment but miss the core issue: people are not in an environment every day where they are actively developing skills to be better workers and problem solvers.

Other companies and some managers still harbor the belief that people are inter-changeable, only need to learn enough to “get the job done,” and are the inevitable consequence of doing business. People are not viewed as an asset to grow, they are thought of like a piece of machinery—necessary to perform a function. If only people would behave like machines and not talk back or threaten to strike.

It is in this range of perceptions that we work. On one end are the organizations and individuals who understand the importance of people, want to put into practice new methods, but struggle with changing old ways of thinking and behaving and are not sure what exactly to do to develop true, deep competence in their people. On the other end are the companies and managers who do not even see the need. The idea of developing people beyond the base requirement has not entered their minds. A business is a business and people are a necessary evil to run the business.

This book is intended to provide some guidance for both. We can’t change your mind or perception, but perhaps we can influence it. It would appear that Toyota is in the news every day, and the news is generally related to some new achievement and the success of the company. There certainly are serious stumbles that are given great publicity, but these are minimal in the long term considering Toyota’s ability to sustain growth and profitability and recover from stumbles quickly. Few can deny the immense success Toyota has had and appears ready to continue having. It is our intent to explore the connection between Toyota’s relentless pursuit of people development and that success.