The Open Secret of Success: Financial Page: The New Yorker
I'm not normally a reader of The New Yorker, but I thank Norman Bodek for pointing this out as we recorded a new podcast episode (to be released in a few weeks).
The article does a good job of relating Toyota to the “innovation” buzzword:
Calling Toyota an innovative company may, at first glance, seem a bit odd. Its vehicles are more liked than loved, and it is often attacked for being better at imitation than at invention. Fortune, which typically praises the company effusively, has labelled it “stodgy and bureaucratic.” But if Toyota doesn't look like an innovative company it's only because our definition of innovation – cool new products and technological breakthroughs, by Steve Jobs-like visionaries – is far too narrow. Toyota's innovations, by contrast, have focussed on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn't made them any less powerful.
With all due respect to Steve Jobs (I'm typing this on a MacBook), the Jobs/Apple story plays into the myth of the typical American CEO who “does it all.” Innovation and brilliant ideas come from the top… big huge breakthrough ideas. For example, the Motorola CEO (Ed Zander) was given credit for developing the RAZR phone, even though the product was created before his arrival at the company (and of course there was a whole design team involved).
Normally, the media doesn't give enough respect to process and ordinary people. This article touches on “kaizen” and employee suggestions in a very clear way.
From the end of the article:
They're also phenomenally difficult to duplicate. In part, this is because most companies are still organized in a very top-down manner, and have a hard time handing responsibility to front-line workers. But it's also because the fundamental ethos of kaizen – slow and steady improvement – runs counter to the way that most companies think about change. Corporations hope that the right concept will turn things around overnight. This is what you might call the crash-diet approach: starve yourself for a few days and you'll be thin for life. The Toyota approach is more like a regular, sustained diet – less immediately dramatic but, as everyone knows, much harder to sustain. In the nineteen-nineties, a McKinsey study of companies that had put quality-improvement programs in place found that two-thirds abandoned them as failures. Toyota's innovative methods may seem mundane, but their sheer relentlessness defeats many companies. That's why Toyota can afford to hide in plain sight: it knows the system is easy to understand but hard to follow.
I think the article really nailed it. Be sure to visit the link at the top of the posting for the full article.
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