Effective Corporate Leadership

Author: Dave Crisp

22 May

On the same theme of "we know what to do" let’s just do it, we have numerous examples of effective work relationships and success created by treating people sensibly. Yet companies still pay consultants to develop HR programs and still fail to either implement them or apply best practices despite all the clear evidence and examples.

Perhaps the most obvious is the NUMMI plant operated by Toyota in Fremont, California near San Francisco. The story is startling and continues to improve 25 years later. Since 2004, the plant has actually been exporting cars to what has to be almost the most discriminating market in the world – Japan. Exporting from high cost USA to the world leading country in car manufacturing. A good overview is here: http://www.eanpc.org/memorandum_link_3.php?page=2.

Even more telling is a comment by American expert John Krafcik (a founder of Lean Manufacturing, who learned at Toyota and is now head of Planning at Hyundai, which is rapidly becoming another world automotive leader). From an interview article: "while he recognized the importance of organization and culture to creating efficiencies in manufacturing, he also recognized that design accounts for about a third of the productivity and quality that can be achieved."

Why quote this? Because when a founder of perhaps the world’s most immensely effective manufacturing system says its success is attributable one-third to design… he is also saying that two-thirds of the success is the result of people and how they’re managed – the organization and culture. That’s a true expert giving what has to be an insightful, unbiased opinion, in a sense counter to his own interests. He isn’t an HR guy; he’s the designer, claiming only one-third of the credit.

Since Toyota started it’s North American entry with this GM plant, its people, union, equipment, location, suppliers, etc., and was able to double production per person in two years, it’s hard to understand why GM, who gave them the plant and stayed involved to learn the Toyota system, has been unable to copy it 25 years later – when, a few weeks ago, Toyota, finally surpassed GM in total world production to become the world’s largest and most profitable car maker.

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