East meets East Africa:
Understanding Lean Leadership with Toyota East Africa MD Hylton Bannon
| Much has been said about The Toyota Way – the car manufacturing company’s leadership philosophy. It always worked for Toyota in the past and some say now, it’s helping them through arguably one of the toughest times for the company in the past twenty years. From disaster earlier this year which saw a 33% fall in sales, Toyota has bounced back with president, Akio Toyoda, announcing recently that production lines will be at full capacity again by November. This confidence and amazing ability to overcome challenges has been the defining strength of the company in its seventy-four year history, and this strength stems from their well-known philosophy: The Toyota Way. |
But what is the philosophy behind The Toyota Way? How do we really implement Lean? What is missing from the textbooks? Is it just a set of tools? Clearly not, as Bannon recently led a group of South Africa’s Executives through a three day Lean Leadership course that he designed at UCT’s Graduate School of Business with the help of Karen White, Pierre Bester and Elaine Rumboll.
Alan de Sousa Caires met with Hylton Bannon to discuss the real philosophy behind Lean Leadership.
I asked Bannon what it is that Lean Leadership really embraces. “The model we have devised describes what Lean Leadership is all about. There has been a lot written in the press about The Toyota Way, mostly by American authors, and all with the full authorisation of the Toyota Motor Corporation. We find however, that a lot of that focuses on the processes on the green side of the model, and a lot of it sits in the action space. This covers the specific tools that are used, such as fishbones (cause and effect diagrams), which are of course very relevant to the practical application of Lean. Many people who study the methods involved in Lean also quickly understand visual management and circles, however, what is less spoken about is the blue side of the diagram; the way of being. It is only through a balanced approach to both sides that the Toyota Way can be achieved and this is what we teach on the Lean Leadership course,” explains Bannon passionately.
“Lean Leadership is a philosophy, it’s not an action plan or a process, which is the essence of what we share and communicate with the course. There are two elements to Lean Leadership. Firstly, the way of being starts from a place of trust, which goes a long way in Toyota to reducing cost and increasing the speed of the organisation. It’s not spoken about a lot outside of the company, so on the course we explain how you can establish trust and what the components of trust are. I believe that it’s such a key thing for all human beings. People often say that they don’t trust one another and that can have deep rooted issues in a business environment.
We have a model that we use to explain trust, which is a combination of sincerity, reliability and competency. Trust can only exist if all three are present simultaneously. If one is missing within an organisation, department, team or relationship the levels of trust will fall. As the levels of trust fall so the costs of your organisation increase. Someone might be sincere and reliable but if they do not have the comptetence to do the task allocated to them would you trust them? Another senario could be that the person is sincere and comptenent but they are not relaible, would you trust them to complete a key task for you? So it is important that we understand what trust means because if you want Lean Leadership to work then you must be able to let go, and letting go is about having trust. You are not going to let go as a manager if you are not able to trust your people. We work with the participants on the course to understand what this means for them and their organisations, and what they might need to do to change.
The second element is about respect. There are two elements in Toyota that underpin everything, one is continuous improvement (kaizen), and the other is respect for people.
Respect for people talks about using a different lens to look at people. At Toyota we say that if someone is kind enough to come to work five out of seven days each week, and is only spending two days at home with their family, then we as a company have a responsibility to look after them. People often misinterpret that the Toyota Way means employment for life. That is not the Toyota way at all. I believe that leaders must understand this not just cognitively but understand it more in “the muscle”.
Lean Leadership also challenges its people to reinvent things every year, even when others might think things are working well as they are. Bannon is clear when he says, “We believe that you have to improve every year. You need to understand the philosophy that sits behind continuous improvement, why you have to improve every year and what does that look like.”
Using a Visual Management system to create positive pressure.
Bannon created a visual management process. He believes that in leading a team your time is one of the most critical issues. Bannon feels that as a leader it is impossible to spend all of your time with your team, so he used the concept of Visual Management to create a positive environment to keep pressure on his team even when he is not there. Bannon utilises visual management tools in the day-to-day management of Toyota East Africa Limited at their facility in Nairobi, Kenya. “In business the pressure often is negative, so how do I keep positive pressure? I believe that if we have negative pressure in the organisation then I would be breaking the trust and respect of my people, and then I would not be able to achieve continuous improvement. I would never be able to establish a way of being if my processes are undermining this.”
“We see in our African culture that the idea of circles is very strong. We see the chief leading the discussion, where people sit and they bring ideas forward. What often happens in business is that you are stuck in meetings and then things do not come to the surface because, for example, people have political agendas on the go. So we see the circle as an environment and a container where people feel safe to come to, where ideas for improving the business are raised. How do you as a leader create an environment where people feel safe to talk? If your people feel safe to talk then they are going to raise all the issues, and you will see that problems come to the surface quickly. I believe that the quicker problems come to the surface then the quicker we can identify and implement a solution,” says Bannon with a confident smile.
How does this work in practice I ask Bannon, “We measure through visual management. We have twenty-three teams in Toyota East Africa Limited that lead the business. We have a room where each team leader has a white board that states what the purpose is of the team, what they are responsible for, what their daily, weekly and monthly tasks are and what the human resources are that are needed to deliver that. It also states their one year and three year strategic plans. Finally it states their absolute five KPIs. This is all on one whiteboard, just one page. It is divided into monthly targets written in black, against which and we measure in either red or green.
Each week I spend ninety minutes with the twenty-three team leaders. We sit in a circle, there are no desks and no computers, just their whiteboards and a chair. I sit in the middle with my PA. The team leaders then have to stand up and present their results for the week. Imagine if you had to stand up in front of twenty three of your peers once a week and the targets on your whiteboard are consistently scored in red. You would not need anyone from Senior Management or HR to give you a performance review! Something in your heart kicks in, and that is what we I mean by positive pressure.
With twenty-three teams having five measurements each, that is a lot of things being measured but you can instantly see what is going on. Anyone can walk into the room and can see within a few minutes what is going on and whether a team is doing well or not. We have an ERP system, but here we do not print out lots of reports to see what is going on, as we use the whiteboards to bring all the measurements into play.”
It is quite a remarkable process and one that works extremely efficiently, but as Bannon explains, “When I first joined I had to invest three to four days with each team in getting their whiteboards just right. That is what is meant in Lean philosophy about “going slow to go fast”. We had to invest the time in the beginning (go slow), but now we are up and running and going fast. The more we fine tune it the faster we go. At Toyota anyone in the factory can pull the production cord and stop the line if they see a problem, so that is sometimes going slow. But eventually you end up going fast with a factory that is producing a product every thirty seconds.”
Character is more than important than qualifications
Toyota places an enormous emphasis on how it recruits people, to ensure that the right people are on-board from the start. It is in this process that the organisation looks at a person’s character not just their qualifications. Toyota needs to understand a person’s levels of self-motivation. They examine a potential new hire to see what their capability is to be open. Bannon puts it very bluntly when he says, “Character is more important to us than qualifications. I cannot train and develop character. Yes, I can send someone on a project management training course and in a week’s time they come back with a set of skills. But I cannot send someone on a character-building course and a week later they come back with high levels of self-motivation! Therefore a person’s personality plays a big role when hiring.”
“Once we have hired people we believe in on-the-job training. We do send people on some courses, but mostly it’s the principle of Genchi Genbutsu as it is one of our underlying principles. We send people to the site, so that they can see the real problem, so that they can solve it at the site. Our people do not sit in their offices and try to solve problems by email and telephone.”
Bannon is clearly passionate about his people, “It is people who sell products as well as your ability to provide customer care. How do you care for your customer? Does your customer trust you? Do they respect you? Does the customer feel that you are constantly improving? Does the customer see action? This is what we focus on with our people”. This passion is demonstrated in the way that Bannon deals with those that might have different beliefs. The system is not fool-proof. Even when you hire people with the right character they might not always buy-in to The Toyota Way, or over time they might drift from the philosophies. I asked Bannon what can be done, “It can turn out that our way and their way is sometimes different, and that is fine. But if it’s consistently different over a period of time, we then sit down and talk through it. If there is no longer a shared belief then we would offer them the opportunity to resign”.
The measurement of success
For Toyota there are three main measures of success. The first is customer satisfaction and Bannon has created a customer satisfaction index which is monitored intensely across the different business units. Secondly there is an employee satisfaction index for which climate surveys are run. Toyota view their market share as the third key measure.
Bannon elaborates, “The Toyota philosophy says that whichever market we go into if we hire the best people then they will in turn design the best processes, then our results will be customer satisfaction and financial. It is a simple equation that we believe in, people plus processes equals customer satisfaction and financial performance.”
It is not just a Japanese success story
Bannon has worked in almost thirty different countries and so is well placed to explain the different challenges of implementing Lean in different countries. He feels that any global multi-national going into different markets and being exposed to different cultures has to remember one key element. “Getting your company’s culture to link with the people’s culture, is the single biggest challenge. This is where Lean leadership helps a lot. With Toyota trust is the most important value that I have seen. I have yet to meet a human being that wants to perform badly. This is where Lean Leadership works because it is grounded in values that are universal to any culture. Some organisations get this completely wrong because they will enter a new market and insist on doing things their way, trying to apply things that have worked in other countries.”
“The Toyota approach is to ask how we can establish trust. What does respect mean for the people in this country, and from there what does continuous improvement mean to them? So there is nothing different in what we do in each country, but rather it is how we do it. The way we would establish trust in Kenya is very different compared to Turkey for example”.
I asked Bannon how he compares Kenya to the rest of Africa, ”In any country there will always be levels of resistance however as Kenya is one of the few countries in Africa never to have been to war there is a very friendly and relaxed environment that is thirsty for knowledge and new ways of doing things. In South Africa it is more a case of let’s get in and get it done, whereas in Kenya they would like to know “how come?”. The implementation approach is different.
When I ask Bannon if it is more difficult to implement Lean in Africa than Japan he speaks positively about the Japanese and the interaction with his homeland.
“The Japanese have developed phenomenal processes, the most incredible ways of doing things,” he says, “but the advantage that Africa brings is the people element. There is no warmer continent than Africa and its thirst for knowledge and people wanting to learn. When you take the Japanese processes and combine it with the African way of dealing with people, all of a sudden one plus one equals five. Two very different cultures come together very well,” concludes Bannon.
The secrets of a Leader
In closing I feel that I have to ask Bannon how Toyota has brought out the best in him as a leader. He explains, “Leaders need to have the ability to unlock the inherent value that sits in their people. If you can achieve that as a leader then the sky is the limit”. Bannon also busted the myths that have surrounded the Lean Leadership mantra. “Many people think that Lean Leadership is a recipe of success but in Toyota we believe that success comes with consistent thinking and right frame of mind,” he said.
