Principals of Management: the Toyota Way

One product that has been a staple for my family as long as I can remember is Toyota cars and trucks. Every vehicle my parents have owned has been made by Toyota. My father, a structural engineer, has always voiced a sincere appreciation for the Japanese automaker. “It’s the Toyota Way”, he would stubbornly proclaim. My brothers and I never understood the reference. After all, it was not uncommon to hear my father quote obscure statistics from Car & Driver or Consumer Reports magazines.

Though in his defense, Toyota has consistently ranked higher in customer satisfaction than other car manufacturers. By my father’s estimation, the company’s commitment to excellence had something to do with a central management philosophy known as “The Toyota Way”. It wasn’t until I enrolled in an undergraduate Organizational Psychology class that I learned he was actually referencing a series of highly acclaimed principles of management.

The Toyota Way is a collection of fourteen principles that drive the decision making process based on a philosophical sense of purpose. It is something that I was initially introduced to by my father, but have recently grown to appreciate as an adult (I drive a Toyota truck). Toyota Corporation teaches all of their employees that these principles of management are based exclusively on a long-term perspective.

They also stress a systematic process for problem solving and an organic growth among company personnel. The company believes that organizational learning is based on an individual’s ability to solve problems systematically. Despite a recent public setback with product recall, Toyota Corporation has consistently stood for quality products, and quality management. In my opinion, the fourteen theories that comprise “The Toyota Way” most accurately depict the optimal principles of management.

Principle one describes that employees need personal focus to maximize their motivation and determine their goals. This philosophy maintains a long-term goal, even at the expense of short-term failure. Principal two is based upon the goal of maximizing production and eliminating waste – specifically excess product, time, thought, and energy. The Japanese culture is known for streamlined efficiency, which is recognized at Toyota headquarters as “Kaizen”.

Toyota Corporation values efficiency in every facet of their production, and in bringing a quality product to the consumer. Principle three describes that overproduction can be minimized by limiting the expenditure of manufacturing resources – otherwise known as “The Pull System”.

The company believes that this operational strategy is one of the keys to maximizing efficiency – i.e. progress is made by pulling, not pushing. Principle four elaborates on optimal efficiency by encouraging workers to “produce like the tortoise, and not like the hare” – referencing an age-old fable that discourages swift results in favor of steady progress. Principles five and six address cultural perspectives within the company.

One being, problems that do not exist, need not be resolved. Toyota wants their employees to minimize the time spent correcting issues, and instead focus on manufacturing new products Secondly, the company encourages employees to be proactive in implementing procedures and processes that improve growth within the organization. Principle seven introduces “The 5S System”, which includes sort, straighten, shine, standardize, and sustain. This program is used to make all spaces efficient and productive. Principle eight again touches on “The Pull System” by stating that the technology used to manufacture their product, must be reliable and thoroughly tested, and used only when necessary.

Principles nine through eleven address the theory of organic growth among company personnel. Toyota believes that employees who understand their objectives, eventually become leaders, and then inherently share that skill with those around them. The company maintains that it is essential to educate and train employees, so that their attention to detail becomes keen and infectious. Furthermore, once training is complete it is necessary to establish a series of small, loyal teams – because by Toyota’s standard, success is based on the team and not the individual.

These teams must be cross-functional, and able to discover potential problems, as well as solve them. The final section, which is comprised of principles twelve through fourteen, addresses experiential education, deliberate decision making, and personal reflection. Toyota executives are encouraged to observe first hand the many processes that are involved in manufacturing an automobile. They are taught to learn the routine from start to finish, so that they are able to identify with issues at all levels of production.

Company managers are not told to make bold, assertive decisions. Rather, managers are taught the process of deliberate, consensus implementation. Lastly, Toyota believes that an organization that is continuously learning and reflecting on their processes is an organization that is continuously improving. And constant improvement breeds tangible progress. The question of whether or not the principles of management described in “The Toyota Way” are most optimal can be argued from many perspectives.

Certainly, the theories are very much derived from traditional Japanese beliefs, and perhaps not applicable to most North American cultures. Perhaps this conflict in methodology contributed to the recent product recall in Toyota vehicles. However, my appreciation of “The Toyota Way” was developed first hand, based on my father’s loyalty and commitment to the product. I have owned several Toyota vehicles in my lifetime and have always been quite pleased with the product. I believe the highly unique principles of management described in “The Toyota Way” are the primary contributing factor to my satisfaction.