Toyota's Eastern way of employing people

The most important thing about the Toyota Way is culture, the core of which is respect for employees and continuous improvement. From the founding of Toyoda Loom Works in the 1920s to the founding of Toyota Motor Corporation in the 1940s, Toyota's leaders have always believed that investing in people is the key to success.

Since the establishment of the company, Toyota's culture has gradually developed into the company's core competitiveness. Toyota's famous lean production model is actually based on a culture of respect for employees. Timely launch of products to the market, sophisticated design with insight into customer demand psychology, etc., are all made by people with their hearts. Only on the premise of being respected by the company can employees be able to devote themselves to work from the heart.

So, by analyzing Toyota's way of employing people, we can see how the company should manage and develop its employees, and what role should the human resources department play in the company.

The culture of trust and improvement makes the model effective

The essence of Toyota's culture is the trust of employees in the company derived from the company's respect for employees. Moreover, it can be considered that every employee has enough responsibility to continuously improve the work through plan-do-check-act (PDCA, Deming Ring-Editor's Note). One of the most frequently asked questions about Toyota is how the company rewards growing employees. In fact, Toyota has deliberately downplayed cash rewards.

In "A Great Place to Work," Robert Levering examines a large number of companies recognized by employees as having great work environments. He found that what these companies have in common is their emphasis on building trusting relationships.

He also found that the quality of these relationships depends on the amount of trust stored in a "trust bank." Policies, procedures, and processes, and how leaders in an organization propagate and enforce them, determine how much trust is stored in a trust bank account.

Companies like Toyota build trust accounts through the day-to-day interactions between managers and employees. They build a culture of engagement that makes employees feel like they are part of a corporate family or partnership, not just a wage earner.

Leverin describes two types of corporate interactions. The first is "commercial engagement". This kind of communication is "bartering", that is, spending time working and earning a corresponding salary.

The second is "Trust Interaction", a type of "gift" economy. In this type of economy, things are exchanged based on trust and partnership rather than direct compensation. It's like the relationship between neighbors: the neighbor is on vacation, and you're willing to stay to help him collect newspapers and mail, and water the flowers in his garden. It's not an exchange of money, it's an exchange of trust and relationships.

Trust relationships are more difficult to maintain than business relationships. In business dealings, companies pay employees according to the terms of the contract. Every year, your boss will clearly tell you your performance appraisal score, what rewards you will receive if you hit your performance goals, and the year is over.

A trusting relationship requires long-term trust between two parties, and the other party will bear the consequences of the transaction. If trust is lost, those who feel wronged will erase the sense of fairness that has been built up over the years.

The role of the human resources department

When it comes to the human resources department of most companies, people think of a department that manages employees like an accountant manages money. Their computers are filled with information about salary structures, benefit plans, A wealth of data on career development, retirement planning, and health insurance. Therefore, the human resources department has traditionally been regarded as a department such as human accounting. In fact, it is increasingly popular to outsource "human resources functions" to information technology companies as a way to reduce costs.

At Toyota, which is famous for its lean production, its human resources department is profoundly different from that of a traditional company. Toyota's point of view is that lean management requires higher-quality employees and more trust than systems that employ mass production. Employees have become the most important part of the system, and their willingness to identify and solve problems will drive continuous improvement. In this way, human resources have undoubtedly become the most important department in the enterprise. Compared to the work of developing employees and creating a level playing field based on mutual trust, accounting in Toyota's human resources department is rather trivial.

In The Machine that Changed the World, the concept of "Lean Manufacturing" was first introduced, which refers to a new way of looking at manufacturing companies. Lean manufacturing focuses on eliminating waste from all aspects of a business, which distinguishes it from mass production.

It's an interesting question how lean manufacturing is changing the role of the human resources department. What has HR contributed to creating and maintaining Toyota culture?

Toyota's human resources department plays a very different role in managing employees as a stream of assets. Some of Toyota's executive directors, vice presidents of manufacturing and engineering, and leading experts in the Toyota Production System have all worked in human resources. This is because the HR department plays an important role in facilitating the development of the operations staff, so the HR manager must be an operations specialist.

It is generally believed that the main purpose of lean production is to save labor costs, and some even think that it is to reduce the number of people. Toyota takes a different view.

The Toyota Production System approach aims to expose problems so that people can fix them, thereby continuously strengthening the system.

With Toyota's andon system (andon means "light" in Japanese, it refers to a system installed in order to be able to deal with problems that occur in the Just in time production process in a timely manner, in order to eliminate interruptions or at least To reduce the likelihood of them recurring, some companies use lighting systems to signal problems—editor's note), for example, where trained team members pull the light cord when they spot any deviation from the norm. Press the light to monitor the entire process, and once a problem is found, it will be raised to the "urgent" level and must be resolved.

Employees who are well trained in problem solving will first retain the problem so that production can continue, then identify the root cause of the problem and develop and implement countermeasures. They will then reflect on what they have learned while trying these countermeasures, which will lead to further action in a virtuous learning cycle.

When people first encounter a process, it is impossible to foresee all the ways in which it will fail. But in the process of constantly uncovering the problem, finding the root cause, and fixing it, the system has grown stronger.

If you want to use the Toyota Production System (or "Lean" as we now call it) to uncover problems and treat employees as problem detectors and solvers, the following conditions must be met:

1. There must be criteria that enable team members to identify deviations as problems.

2. Team members must pass training and master the standards.

3. Team members cannot be afraid to expose problems that could get them into trouble.

4. Team members must be trained to master problem-solving methods.

5. Team members must actively help the company achieve the ambitious goals of the organization.

The manufacturing process is not perfect, and problems will continue to arise. At this time, employees need to identify the problem according to the standard and solve it. This is also a process of employee learning, and through this process, the ability of employees will be further improved.

In this way, employees grow with the lean production system. Working for this purpose requires a high level of trust—the belief that there will be no negative repercussions for uncovering (admitting) the problem; the belief that if the company becomes stronger, all employees will benefit.

This sounds sublime and idealistic, and it's easy to give the impression that Toyota is either a utopian company, or it's a mere appearance.

Neither of the two. Toyota sincerely believes that competitiveness depends on a strong Toyota Production System, which depends on growing high-level employees with a high sense of trust. The HR department acts as the guardian of trust.

This does not mean that employees are perfect or that the Toyota system is perfect. Again, the underlying premise of Eastern thinking is that nothing is perfect, and we can never exhaust the ways in which systems can fail. Nor can we accurately predict how people will behave.

Lean relies on people

Most companies see Lean as a process that eliminates waste, a methodology in action that misses the essence of the Toyota Production System.

The Toyota Production System is designed to intentionally develop a fragile system that relies heavily on employees. A lean system will fail, and no design can save it, without the rigorous problem-solving of motivated and capable employees. If the level of management and labor is not high, and there is a lack of trust in the system, the system can become dangerous and stressful.

With the premise that Lean is seen as a tool, the Lean deployment process is mistakenly seen as a procedure, and goals are typically quantified in dollars. How can we eliminate waste and variability to reduce unit production costs? Improvements can be labor, inventory, or quality issues that translate into dollar savings. These numbers are rolled up to the company level to illustrate the overall ROI of this program. This procedure is performed by trained black belt specialists who are responsible for blending methods. Top management delegates responsibility to these black belts. Many companies have reported significant cost savings by applying Lean Six Sigma.

In the companies we visited, the actual implementation of Lean in the workplace often remained superficial. Solving problems and eliminating waste are isolated cases, and businesses remain vulnerable. Moreover, the employees on the post did not make efforts to improve themselves. As a result, the new procedures were often assimilated by the old routines.

Toyota's approach is more broad and holistic. It begins with the philosophy that a company's strength is based on improved business methods and respect for its employees. The measure of success is multidimensional and reflects the success of the business rather than specific projects.

Kaizen is not just focused on large Lean projects, most of them are small improvements made by workers on the shop floor, so kaizen runs through the process and results. Over time, continuous improvement in identification and problem-solving capabilities strengthens the company, making it a learning organization.

We must re-emphasize that Toyota is made up of employees, and each employee is very different, and even the same person can become different over time. Therefore, not every behavior of every employee every day is a support for Toyota's cultural philosophy. What Toyota stands out for is the ability to accurately and honestly identify problems and resolve them with great precision.

Toyota provides a real example of a successful learning organization. It is a success for both the owner of the business and the employees of the team. It starts with the assumption that employees are the most important resource and need to be trained, developed and challenged. The human resources department is one of the most visible and important functions in a company. Because manpower is the only competitive resource that cannot be replicated.

Excerpted with permission from the book Toyota Culture by Jeffrey K. Liker and Michael Hoseus, copyright registered by McGraw Hill Publishing Group. Translated by Luan Ou. Author of The Toyota Way, Professor of Industrial and Operations Management Engineering at the University of Michigan, and Chairman of iker Lean Advisors. Michael Hoseus, Executive Director of the Center for Quality People and Organizations, has worked at Toyota's Georgetown plant and Kentucky for at least 12 years as a team leader, assembly plant manager and human resources unit manager.