Competition at Toyota
Famous for its razor-sharp efficiency, the Toyota production model offers a wealth of business insight. The company also fosters a culture of experimentation and internal competition that defies neatly presented business frameworks. Discover how one of the world’s biggest automotive companies uses competition to drive productivity.
U+, in partnership with the ILO Institute, is excited to bring you highlights from ILO’s Weekly Virtual Gatherings. This time around, we’re highlighting a notoriously efficient company – Toyota – and exploring how the auto giant uses a competitive internal environment to its advantage.
A Harvard Business School case study, titled “Becoming a Toyota Manager,” traces the first months of a new manager’s career at Toyota. The manager was a man hired from a competing manufacturer where he had managed a large workforce.
He began his Toyota career with a large dose of retraining. After three months of working closely under a veteran Toyota manager in a small corner of the U.S manufacturing operation, the new manager was flown to a Toyota assembly plant in Japan, paired up with a non-English-speaking shop-floor worker and given the task of cutting steps out of the process at one key point in the assembly flow.
The new manager and his partner found seven steps to improve or eliminate in his first day, and felt proud, until he learned that two more-experienced Toyota managers doing the same work the same day had found 28 and 31 steps to improve or eliminate, respectively.
Toyota is renowned for its process efficiency at every level of its business. What is so striking about this case study—and about similar practices shared with ILO by Gary Convis, formerly President of Toyota’s Georgetown, Kentucky manufacturing plant – is that the process improvements were not arrived at by applying a theory, but through an experimental, competitive process.
“The insight built into the system,” Convis told ILO, “is that you can accomplish things without knowing the theory behind what you do. You build approaches based on doing the work, instead of knowing a model for doing the work. And you teach that best by getting people working in teams, but in competitive environments.”
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Launched in 2005, ILO is a membership organization for large companies, government agencies and not-for-profits, bringing senior executives leading innovation together for knowledge sharing and community building. ILO has completed more than 300 best-practice research reports, focusing on emerging challenges and opportunities. To learn more about ILO, membership benefits, and how to join, visit www.iloinstitute.net.