The commitment is clear: Toyota will not lay off employees who are doing
good work for the company except as a last resort to save the company. Employees
who are not performing get warnings and must show that they are seriously
trying to improve.
Like all companies, Toyota deals with ups and downs in the marketplace. They
use flexible staffing as a shock absorber. First, they have considerable numbers
of “temporary workers” from contract companies. This can be 20 percent of the
workforce. They do not have the same commitment to temporary workers as
they do to regular workers. But they do have long-term relationships with the
contract labor companies who understand their requirements, and Toyota gives
these outside partners steady business. They also have affiliated companies in
the broader Toyota group and can add and subtract labor through transfers of
personnel.
The question for your company is very simple: What type of social pact will
you make with your employees? Again, start with your historical understand-
ing, which may be just fine as is. But if the reality is that employees are added
and subtracted at will based on market conditions and simple ROI calculations
on plant closings, something will have to give. Either change the pact or forget
about becoming a lean learning enterprise in the true sense.
Maintaining Continuity of Purpose
A number of major corporations have made significant progress on the lean
journey. It typically starts when someone with operational responsibility—a
vice president or even a middle manager—decides to seriously investigate what
lean can do for the company’s operations. It’s often driven by a real business
concern, such as shrinking margins forcing severe cost reduction, or it can be
opportunities to expand the business and a desire to minimize major capital
investments. Consultants are brought in, someone is assigned to lead the lean
initiative, lo and behold, it works! It works in the sense that processes are
improved, material flows better, and the needle on performance indicators
moves—at least for the areas where lean is applied.
Success motivates, and there is nothing better than achieving the business
objective. This can lead down several paths. One is to spread lean and strive to
get even more of the good results. Teach more employees the lean tools, and find
more projects. Companies that have done this find that they keep on getting
improvements here or there but at some point realize it is not coming together
as a system. They also realize that the gains are not sustained and technical
changes are slipping back to the old way of doing things. To make it come
together as a sustainable system requires another major leap forward. Top man-
agement must realize that lean is more than a set of tools and techniques. It is a
way of thinking about the very process of management.
Chapter 2. Define Your Company Purpose and Begin to Live It 27