"Thinking outside the box": Nemawashi, Hoshin,..another way to manage people

10.4 billion dollars, that is the estimated pharaonic loss generated by the strike which ended last month after paralyzing three major US historical automobile manufacturers’ (GM, Ford and Stellantis) factories for three weeks (1),

Led by the powerful United Auto Workers union (UAW), the strike movement did not affect the nine factories Toyota has in the country.

Despite its numerous Attempts the UAW still hasn’t succeeded in establishing itself in these Toyota’s factories.

There is a reason why it’s difficult.

At the end of the 80’s, the best Japanese specialists in the automotive sector of the time had to solve a seemingly tricky problem:

Due to their brand product’s popularity, the Japanese could no longer meet all the market demand with imports. To avoid the threat of protectionist measures, they had to produce locally.

A seemingly overwhelming difficulty then arose: by what means could American workers in these factories, then under construction, ever meet the level of quality and efficiency that characterized Japanese production.

Isn’t the education and mentality of Americans the polar opposite of the Japanese? They were known to be individualists, freedom-loving, while the later value above all the collective order and obedience...

While this challenge seemed unreachable, these specialists gleamed with confidence.

Although large Japanese industrial groups certainly had the advantage of being able to rely on their employees’ commitment and involvement, they also knew that these qualities were not innate.

Certainly Japanese society promotes these virtuous behaviours but it is above all the achievement of the companies’ skilled management and organization.

All they had to do was to adapt, without distorting, these managerial methods.

Thus those who work in the United States, Europe and elsewhere in the Toyota group have become familiar with concepts with the exotic names such as "Hoshin", "Ringi", "Nemawashi",...

So many processes that promote communication at all hierarchical levels of the organization, give meaning to everyone's work and fit it into the more global objective targeted by the company. They have the advantage of strongly involving all employees.

Furthermore, the company attaches great importance to training and team leadership.

Dialogue is permanent within the company with the result of forging a genuine team spirit, instead of a confrontation culture.

This kind of management method can be found in many other Japanese multinationals but it is Toyota which has probably produced the most successful version of this managerial corpus transposition outside of Japan, labelling it the "Toyota way”.

Somehow ignored in the west, this people management philosophy is however closely linked with the world-famous production methods derived from the Toyotism (Toyota production system) and its related concepts (“Kanban”, “Kaizen”, quality circle, 5S ….)

It is their combination that lifts the multinational performances in sales, quality, profitability… to the highest level since decades.

Toyota did not have to bear the cost of the strike which impacted its competitors in the United States and took advantage of their difficulties to gain market share (2)…but as soon as an agreement between the UAW and the big three have be reached, it communicated that the salary of its employees on production sites would be increased by 9.2% to $34.80 per hour as of January 1.

A sure way to keep motivation high in its factories...

Article written by Bruno Bernard Consultant and Trainer

www.bsformations.com

(1) Anderson Economic Group estimate on 2/11/2023

(2) In October, on the PC market, Toyota gained 4.8% market share on a market up 2%. The brand occupies second place on the US market (14.1%) behind GM (16.6%) source Marklines