What company will be the next Toyota and why?

Toyota Motor has 10x the market value of the Big Three combined. Toyota’s management system is one of the most studied and emulated in North America, yet no other company is as highly revered for their management style as Toyota is, with the exception of perhaps, GE. The question is what company will be the next Toyota and why? In this post I present my ideas:

From the perspective of an individual company: Oticon

Oticon’s culture is based on the philosophy that an individual’s point of view is more important than his or her title. With independent, responsible employees and colleagues, managerial responsibilities are incorporated at ground level.

Since Oticon’s style of working is project-based, managers are there to clear the track of any obstacles and make sure the individual and the team as a whole are achieving both personal and corporate goals.

At Oticon it is people’s talents and expertise that govern the tasks they are asked to fulfil. Those who are professionally competent will gain plenty of influence and great responsibility in a company that offers independent jobs full of challenging assignments.

Oticon revolutionized management through a change programme that basically turned the company from being a loss to becoming one of the best performing companies in Denmark..

The trick was to turn the company from being a highly traditional engineering company into a consumer driven company, so the entire innovation process was remodelled. At the same time working stations were abolished in favour of dynamic workplaces - the virtually paperless office with no fixed place, and the entire organisation operated as “Spaghetti”. In fact that term, spaghetti organisation, gained fame globally. The operation began involving every function at every step of the entire supply chain - thus being able to cut back on unnecessary functions, effectively creating a very powerful, lean operation.

From an alternative perspective: The United Arab Emirates development in Dubai

This has to be the most remarkable success story in modern times. Using their resources and the income earned from oil, the UAE is transforming Dubai into the premiere city in the modern world. The number of projects going on in Dubai is so numerous and so large that no single corporation on earth could match it.

Image via Wikipedia

The management in the UAE and Dubai under the current leadership of Sheikh Mohammed bin Rashid Al Maktoum have focused on transforming their small desert area into the number one business, shipping, technology and financial destination in the world. Even if they do not achieve everything that they had set out to do, if you just view their current accomplishments, it should make them worthy of being the premiere business entity in the modern world.

Here is an example of some of the multi-billion dollar projects: Al Ghurair City, Burj Dubai, City of Arabia, Dubai International Airport (expansion), Dubai International Financial Center, Dubai Marina Masterplan, Dubailand, Hydropolis, Palm Island Masterplan…just to name a few.

Systems Thinking

Another way of looking at this question is to establish when will systems thinking really take hold? I believe the transformation is already underway. Case in point, the MIT Lean Aerospace Initiative is re-positioning itself to focus on Lean and strategic systems thinking. Companies are focusing on the next hot wave, “innovation” only to find that the foundation is process/system thinking. This is further fuel to the fire of enterprise alignment and systems thinking.

I believe that the next major world wide transformation will come from outside of manufacturing. Companies are struggling to achieve a balance between shareholders, customers, and employees. Many have come to the realization that the value of human capital is the single largest investment and a primary foundational element of long term success. A well trained aligned workforce focusing on value and continuous improvement is at the heart of successful systems thinking.

Many people think about the tools of the Toyota Production System but fail to understand that real enterprise alignment begins with senior management, (vision) the development of the portfolio, (allocation of resources) infrastructure systems, (performance management systems) and enterprise knowledge systems (continuous improvement and communication). This includes the enterprise road map – typically a twenty to thirty year vision of the future, the management measurement systems, and the true alignment of the corporate goals and objectives down to the lowest level within the organization. Without this alignment, any process changes will not be sustainable as the infrastructure and culture will not be in alignment. Like any living organism, things that are not in alignment are destroyed as they threaten the existence of the enterprise.

To deeply embed the PDCA (continuous learning cycle) senior management must utilize within the strategic planning process. The true value of the enterprise portfolio/roadmap is to allocate resources and transform the long-term corporate vision into reality. Like the architect, the building plans integrate all systems into alignment to accomplish the goals and objectives.

I believe that as Lean Transformation Leaders it is our obligation to work with senior management to help the understand the power and potential of Lean/Six Sigma/Systems thinking. We can no longer “delegate upward” and ask for direction but rather leverage our position as enterprise change agents.

What do you think? Please leave your comments below:

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