Scaling Up Excellence, The Toyota Way

Scaling Up Excellence The Toyota WaySo – if Scaling Up Excellence is a manual about how to create a ‘relentless restlessness’ that drives customer-centric innovation, where does that leave The Toyota Way? Do Sutton and Rao’s prescriptions ‘supercede’ The Toyota Way? What does Sutton and Rao’s analysis tell us about the continued validity of what has become effectively the gold standard in operational excellence?

There are clearly differences in scope. The Toyota Way is a complete philosophical system. It is structured, prescriptive and sometimes rigid; but its impact in engaging people, in nurturing their creativity and commitment to deliver continuous customer-centric innovation, has been awesome. Organizations the world over are proudly attempting to replicate it.

Scaling Up Excellence, on the other hand, does not attempt to define any kind of closed-loop system.  It is a distillation of the evidence about how best to promote operational excellence in the real world, shaped into a set of tools, tricks and mantras for ‘fighting the ground war’ that is the pursuit of continuous improvement. And it has a broader canvas too, taking in education, anti-bullying initiatives, creative industries and start-ups, for instance.

But there is a huge overlap. Much of the evidence presented in Scaling Up Excellence can be seen as a ringing endorsement for The Toyota Way. Both Stanford academics, Sutton and Rao pursued their quest with open minds, spoke to a lot of people and were led by the evidence. But their conclusions about how best to scale excellence closely mirror The Toyota Way:

Continuous Improvement Never Ends. ‘Creating a relentless restlessness’, and recognizing that ‘good teams work every day to make things better’ mirrors Toyota’s own relentless commitment to continuous improvement, including self development.

Live In The Real World.  Sutton and Rao’s ‘most important learning’ is that scaling excellence is a ‘ground war, not an air war’. It’s about grit in ‘grinding out one small change after another’ and about resisting the temptation to roll out anything that’s unproven in practice, no matter how compelling on paper. Which mirrors Toyota’s insistence on genchi genbutsu (or go and see, to deeply understand) and on always striving to perfect something before it’s expanded, looking to ‘add as you go’ rather than ‘do it once and stop’.

Think and Reflect. Sutton and Rao concluded that ‘as we see again and again, the quick fix rarely works when it comes to scaling… Beware of spending money as a substitute for the deep thinking and demanding work required to instill, spread and sustain excellence’.  Which mirrors Toyota’s insistence on self-reflection and thinking long-term.

Everyone’s Accountable. Sutton and Rao conclude that ‘excellence spreads and persists when accountability pressures permeate a workplace’.  Excellence requires talented people but nothing can be achieved in the long run without a culture of accountability to always act in the organization’s best interests. ‘Stacking up talent like firewood’ isn’t enough. Which mirrors Toyota’s expectations of a posture of continual learning and a commitment to work with others to do what’s right in the long run.

There are so many other similarities.  Recognition of the importance of diversity in enriching teams, for instance; or their common attachment to simplicity, structure and parsimony wherever possible.

Perhaps the most significant difference is with respect to leadership.  Sutton and Rao are clear that nothing substantial or long-term can be achieved without executive sponsorship, and they applaud executives who get engaged.  Toyota though goes beyond conventional wisdom in its commitment to leadership development. In the words of Akio Toyoda, President of Toyota Motor Corporation:

“Our goal is for every Toyota team member from the worker on the production floor to our most senior executives to be working to continuously improve themselves. We all need sensei who will guide us to the next level of achievement. I personally still have many sensei teaching me.”

This commitment to self-reflection, to continual development of one’s own capabilities as a leader, and to constant support and encouragement of leadership development in others, is central to Toyota’s approach. And it’s formidably difficult, says Deryl Sturdevant, a former Toyota executive, now a senior adviser at McKinsey:

“Applying lean is a leadership challenge, not just an operational one… Should a company bring in an initiative like Toyota’s production system – or any lean initiative requiring the culture to change fundamentally – its leaders may well struggle and even view the change as a threat…Senior executives who are considering lean management should start by recognizing that they will need to be comfortable giving up control.”

Most organizations resist – or don’t even understand – the culture change required. They go instead, Sturdevant argues, for a lean program that “largely scratches the surface, given the benefits that they could achieve”:

“A common characteristic of companies struggling to achieve continuous improvement is that they pick and choose the lean tools they want to use, without necessarily understanding how these tools operate as a system. (Whenever I hear executives say “we did kaizen,” which in fact is an entire philosophy, I know they don’t get it.)”

But every organization is unique. They don’t want, and they couldn’t, become Toyotas. There’s plenty to admire in The Toyota Way but every organization needs to develop its own expression of the truths at the heart of Scaling Up Excellence and The Toyota Way.  There are no short cuts. Today’s mainstream is hybrid approaches that are pragmatic in moving the organization forward, drawing upon learning from wherever they can find it. And, to some extent at least, they work: at Amazon for instance. As Jeffrey Liker and Gary Convis have written, even CEOs passionate about The Toyota Way and hired from Toyota to manage a major business turnaround have to be pragmatic, though the key difference, they suggest – the way that they avoid simply leaning out a company – is their commitment to investment in developing leaders.

Scaling Up Excellence is curiously silent on Lean and The Toyota Way but its conclusions are entirely compatible and complementary. It’s especially useful as a playbook for organizations that might never want, for all sorts of good reasons, to wholeheartedly embrace The Toyota Way – and for individuals or teams who want to roll up their sleeves and start a ball rolling within their organization.  But it kind of reinforces why The Toyota Way is so widely admired.

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