Toyota is a brand that embodies production precision driven by meticulous management. Synonymous with excellence, Toyota's international reputation is undoubtedly the result of a workforce that is engaged, committed and valued. But how does Toyota achieve this? The answer is through strong and transparent leadership that values all stakeholders at every level of the business.
The Leadership Network has been investigating how Toyota Material Handling nurtures a thriving workforce committed to the culture of excellence. This final article explores in more detail the vital concept of Hoshin Kanri. This philosophy places strong leadership at the heart of a business, inspiring the workforce from senior management to the shop floor. Examining the different stages of Toyota's sustainable lean 'iceberg' reveals what keeps people motivated and engaged, enabling the business to thrive and grow.
Stefano Cortiglioni is Head of Transformation at Toyota's Lean Academy in Bologna, Italy. He illustrates their unique model by invoking an image of an iceberg in the sea. Above the waterline are the visual attributes: tools, technology, technique and processes. Beneath the waterline lies the invisible foundations: strategy and alignment, leadership, behaviour and engagement.
Explaining that the larger invisible underwater mass supports the visible output, Cortiglioni describes how Toyota Material Handling has used the model to build an environment for sustainable lean thinking. This model allows individuals to feel valued, instilling their work with genuine meaning and inspiring them to stay true to the Toyota ethos.
Everything begins with strong leadership
Leading by example is key to Hoshin Kanri. "Leaders should always be aware that their colleagues are watching what they do and not only what they say," explains Cortiglioni. "A manager should be like a team coach, offering support and building relationships that encourage transparency and openness." For example, people are encouraged to come forward when problems arise, secure in the knowledge that the issue will be treated as a company problem, without individual blame.
At Toyota, supportive and robust leadership inspires engagement through Mendomi: a Japanese term that means taking care of workers like they are family. Toyota leaders are always mindful of external factors, like family matters, that may impact an employee's performance and support them with openness and empathy.
An environment of mutual trust benefits both the leaders and employees and nurtures positive leadership behaviour for teams to follow. "You have to put a lot of trust in your teams as you can't control and manage everything alone," says Cortiglioni. "My team motivates me. Enjoying success together is the biggest motivation.
Cortiglioni benefits from visiting the plants to see what is going on with his own eyes and doing Gemba walks, rather than managing from afar by examining KPIs. "KPI's do not reflect the real world," he says. He uses the example of a logistics manager who was anxious about a lack of space, so he visited the factory and found an area where components were overstocked and dusty and reassigned the area to solve the problem. He created a link between the target and the real world and built trust with the workers by being present and getting to know their work environment.
It was the perfect example of always being mindful of the line of sight, with Cortiglioni regularly reminding his teams of their line of sight to the business goals with his visits. Line of sight at Toyota is a testament to the scope of the employee's ability and desire to see, understand, and care beyond the self.
Every Kaizen idea is bright – The importance of recognition
Strong leadership instils an improvement mindset, and Toyota has developed a set of tools to embed ownership and responsibility in individuals. Workers record all daily targets and deviations to help them analyse weak points and deal with problems efficiently. This sense of control and partnership benefits the business and individuals equally..
To effectively encourage engineer engagement and the mindset of continuous improvement, Toyota offers tangible and visible appreciation for every Kaizen (improvement) idea through recognition that is more than financial. An example of this recognition could be a visit to another plant or an awards ceremony. Employees are encouraged to share ideas with their leader, who discusses it at a weekly meeting. Each contribution is evaluated and given transparent feedback about whether the concept will be taken further or why it's not possible.
Cortiglioni recalls being taken out for dinner with a Managing Director to celebrate a good idea. The Director was genuinely interested, and this evident appreciation made him feel valued, inspiring him to carry these values into his everyday practises.
"Key to sustaining a lean culture is commitment, and this must come from the top," says Cortiglioni. For example, management are always present at work parties or celebrations. If they disappear because they have more important things to do, it sets a poor standard and can create feelings of confusion and disrespect. When Toyota's President attends a presentation or competition for Kaizen ideas, he is sending a positive message that makes people feel important.
"I have always enjoyed sharing and discussing targets with my team," says Cortiglioni. "We discuss and validate everyone's opinions, listening and trying to deeply understand what each employee is saying."
Tools, technology, technique and processes – The tip of the iceberg
Once stable and supportive leadership is established, solutions to problems can be found by offering workers useful tools and resources. An example of this would be a visual breakdown of every issue, from shortages to production problems, to allow optimal problem-solving. Every challenge is divided into relevant functions so that the right person with the appropriate skills can be assigned to find a solution, again creating a sense of ownership without blame.
Data is also critical at Toyota as it offers tangible analysis and results. It helps to identify key constraints and to envision a clear path forward. Hoshin Kanri demands clear direction in deploying mid to long-term targets, involving different teams throughout all levels of the business. An essential part of this process is the breakdown of long-term goals into smaller pieces by managers to aid teams and individuals in achieving final KPIs.
The future holds seismic changes for the industry. As Toyota sets out on the journey towards automation, strong leadership becomes increasingly crucial for supporting lean methodology for organising, developing and sustaining a productive work environment. The ethos of reducing waste and optimising productivity was born at Toyota but has been adopted by businesses worldwide, whose leaders aspire to take care of their workforce in an ever-changing world.
The vital lesson other companies can take from Toyota is its emphasis on what lies below the waterline: a focus on leadership, behaviours and engagement. This emphasis is what allowed Toyota to build strong foundations that continue to achieve sustainable results and transform how the business world approaches leadership.
For more insight on Toyota’s approach to sustaining Lean culture, watch The Boardroom episode Leading the Toyota Way with Toyota Material Handling’s CEO here.
For more articles focused on lean transformation written in partnership with Toyota Material Handling, please see the following: