Will Toyotaoism replace Fordism?

250px-lao_tzu_-_project_gutenberg_etext_15250.jpgSometime in 2007, Toyota seems likely to become the World’s biggest auto manufacturer. According to Professor Fangqi Xu, the 21st Century will be an era in which the Fordist principles of production will be replaced by a more creative leadership style. I suggest Toyotaoism would be an appropriate term for characterizing the emerging Post-Fordist era.

Sometime in 2007, Toyota seems likely to become the World’s biggest auto manufacturer. In contrast, Ford workers face substantial job cuts. Toyota represents one of the outstanding illustrations of developments which have been gradually refining and replacing the production line processes and mentality of the 20th Century.

The company has pioneered a fusion of Fordist methods with a more Eastern philosophy of respect towards the environment, customers, and employees. The fostering of empowered teamwork in Toyota is a central element of the philosophy, production system, and leadership style of the corporation.

Beyond Lean Production

In broad terms, the Toyota system has been equated with the arrival of lean production and subsequent higher efficiency gains. This has simplified out the production gains from the deeper philosophical implications. These bring the system closer in spirit to the European experiments in socio-technical systems design at Volvo, itself briefly hailed as a revolutionary innovation for manufacturing. However, insiders argued that Volvo’s experiment failed in face of ‘Toyotism’.

The best-known Western account of the Toyota system is arguably from the MIT researchers led by James Womack. Their study raised popular awareness of Toyota’s Just in Time system, and the broader concept of Lean Production.

From Toyotism to Toyotaoism

I would like to propose the acceptance of a slightly different term for the significance of the changes implied by the Toyota approach. Rather than the narrower perspective of Toyotism, I suggest Toyotaoism. The term hints at a philosophy that goes beyond a shift in production system. The philosophy is particularly appropriate in its Eastern origins. Western authors have already simplified some of the principles in The Tao of Leadership.

One leading scholar has been developing this idea is Professor Fangqi Xu of Jiangsu Polytechnic University, China. Professor Xu is the Director of International Connectionas of Japan Creativity Society, and also a student of Ikujiro Nonaka, the renowned Knowledge theorist. Professor Xu has made a detailed study of creativity courses around the world. His studies have convinced him that the 21st Century will be an era in which the Fordist principles of production will be replaced by a more creative management style.

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26 Responses to Will Toyotaoism replace Fordism?

  1. Peter says:

    That is a great term, Tudor. I am fascinated by this article, in part because my friends David Howard and Trevor Hilder have also been pointing me at the Toyota example. I’ve referred this article to them (and Bob Snowdon of Comp Sci at Manchester). Perhaps they will comment.

  2. Thanks, Peter, for pointing out this blog posting to David and I.

    I think Toyotaism is indeed an excellent term. Our discussions with Peter recently have centred on cultural factors which inhibit learning, and how these differ from nation to nation.

    One cultural factor which you refer to in this post is the tendency to grab an oversimplified version of a philosophy, rather than taking the trouble to understand it in depth. This “get rich quick” mentality is common amongst Westerners in a hurry!

  3. Tudor says:

    I’m a bit self-conscious about coining terms. In this case I feel it does have some ‘legs’. Thanks to Peter and Trevor for the encouragement. I’m indebted to Professor Xu for his insightful observations on the back-and-forth West-East-West development of manufacturing process innovations.

    Forgive me if I get all pedantic and urge we stick to that extra ‘o’ to give the Tao in the middle of Toyotaoism. (Trevor, I’m sure it was a slp of the typing !).

  4. David Howard says:

    I always worry about ‘ism’s; they simplify and beguile. The key to the Toyota production system is understanding variation as the harmful virus that it is. No one word will convey this important message. However if your term helps people to explore further and discover the importance of striving to achieve ‘economic-quality’ it will serve a truly worthy role in the creation of real wealth as opposed to just rearranging its distribution. It is worth recalling that the commonly used term ‘world class’ was defined in September 1960 by Dr Genichi Taguchi (of loss function fame) as being “On-target with minimum variance”; that is suppliers pleasing end-users with minimum waste and maximum value to both parties. Toyota understood the message from day one, Ford, GM and others are still stuggling to come to terms with the substance of the messager even now while quite happily branding their products as being world class. (The phrase ‘self-praise is no recommendation’ comes to mind.)

  5. Tudor says:

    Some nice and fair points. Many thanks David for a salutary reminder that academics can tend towards unchallenged enthusiasm for ‘isms’ (or, anyway, this one can).

    We are also a bit prone to gallop off on the back of new ideas. So here goes. I’ve never thought of variation as a harmful virus. Would like a bit more to work on this. I suspect that’s for another posting in another blog (how about it, David?) My own take on variation is as a component within Darwinism concepts of evolutionary change. Anothet influence has been managerial cybernetics, through a great thinker and dear friend Stafford Beer, and through him the ideas of Ross Ashby on requisite variety in organizational systems. I’d love to have get Stafford going on the topic of variation as harmful virus. Sadly I’ll never be able to have that converstion now with Stafford, and I suspect he would have muttered about metaphors somewhere along the line. But I can see that Dr Taguchi is using the term in the statistical sense. Which illustrates another (semantic) source of variation?

  6. David Howard says:

    There we go again – Darwinism! Variation, variety, variance – all terms that in differing ways return to the simple fact that no two peas in the pod are identical. Yes, pressured by Trevor and Peter (et al) I have decided that there is a probably place for a First Metre blog – prototype testing of how best to use the medium it in hand as we speak – but in the meantime let me leave you with a though first expressed by the father of understanding why variation is such a dangerous virus – Walter Shewhart. In 1939 he asked: “How much variation should we leave to chance”

  7. Tudor says:

    First Metre. Respect! I am guessing that you are the David Howard who wrote the delightful piece on Stafford Beer for First Metre. (There are several distinguished bearers of your name, as I found out on the web. There’s variety for you).

    I also admire Shewhart, although I didn’t know him personally. If I had, I might have
    had the temerity to retort to his epigram that in the best of all possible worlds, variation is the spice of life, the source of individual worth in the Mendelian peapods, and the origin of species.

    Less flippantly, I would like some enlightment about where to start learning more about variation as a dangerous virus. I can at least promise that it will offer added value to my future contributions to students of various kinds with whom I work.

  8. Mohamed Zain says:

    While the japanese “toyotaoism” is going to replace “fordism” this year, I would like to point out to the fact that the Koreans (no specific brand names yet) are catching up fast with the Japanese. As a matter of fact, in the field of sports they have already overtaken the Japanese, as attested by the recently concluded 25th Asian Games held here in Doha. The Japanese’s contingent came here with the sole intention of beating the Koreans, i.e. to be in second place after China. But, in the end they failed. So, is there a posibility of Samsungism in the future?

  9. David Howard says:

    (Your assumption is correct.) The Janus like relationship between variation and variety is very important to respect as I trust you will agree. The challenge, to me, is to control the virus of variation and stimulate the opportunity of variety. I use the word virus to emphasise that waging war against variation is not just a matter of an annual re-organisation but an endless battle – kaizen no less. Variety by contrast originates from the same spawning pot as variation but is, I suggest, less virulent. In fact it seems to be an emergent property that we can nurture or inhibit depending upon our approach to ‘e-decation’. I hope we can meet when Peter next invites me to Manchester!

  10. Tudor says:

    Thanks Zain. I’m hoping to write something with Fangqi Xu later this year. He seems to be suggesting that there ‘Toyotaoism’ can be found (with some cultural adaptation) in Chinese organizations such as Haier. I’ll find out if he’s looked at Korea. I note also the intensity of competition in Asia with the Olympic games as a spur. Singapore is deperately trying to get a medal or so for thier investment.

    David. I look forward to a face-to-face. Even better if a mutual friend can stand us to lunch … (On the other hand, there’s no such thing as a free one, is there).

  11. pk says:

    Is Toyota better than its competitors?

    I’ll come back to this question.

    This thread has many sub-threads already. One of which is ‘What’s wrong with an ism?’ It is just a shorthand … e.g. saves us explaining the principles of the pre-1990 Soviet economy every time we mention our holiday in Russia, or why Henry Ford was a pioneer.

    We should not confuse the use of the term with the light shone by the guide.

    And then, back to my original question, ‘Is Toyota better than its competitors?’ Are we making too much of its progress up the motor industry league (from third to possibly first place in about 25 years!!) Is it a more efficient company than Ford? I ask genuinely. Is it? Is it succeeding because of its strength, or Ford’s weakness? Do we believe the Toyota/Lexus product reliability stats? If we do, do they correlate with market success? And what about innovation: how does Toyota compare with, say, the great European manufacturers on innovation? The hybrid has been a great headline-grabber for them, but is it anything more than that?

    And if it is better, how much is this attributable to the ‘tao’, and how much to the simple, long-term philosophy that can be developed when you are not an American shareholder corporation?

    I am genuinely interested & asking questions lest we write a hagiography of this company just as the Koreans (or Indians) rise to take it out (see Zain).

    As for the Howard/Rickards summit: I’ll organise diaries.

  12. David Howard says:

    PK rightly takes us back to the question: ‘Is Toyota better than its competitors?’ Well, we need an operational definition of ‘better’ before we can more carefully answer that question. Equally important is the meta-question: ‘Why the question, anyway?’ Over to Peter! With the purpose clear and the OpDef shared we might be able to progress the matter. Without such First Metre clarity I believe we will be in danger of wandering to little avail.

  13. peter says:

    Touche!

    Actually, what’s motivating me the temptation for business communities (and schools) to operate a kind of Earthly canonisation of gurus/star companies etc. Many are later discarded or excommunicated, but you will hear students talk about the days when “General Electric was *the* case.” Likewise, IBM, Enron & even, in its day, Ford have all enjoyed such exalted status.

    Now Apple is in the pantheon.

    And maybe Toyota too?

    So, your answer is more intelligent than my question, but is pointing the same way. “What are we looking for?” That’s really what I am saying.

    Now a subtle point: there is nothing wrong with a kind of catwalk effect around business, if that’s what we all see. There is actually nothing wrong with giving General Electric (or Ford, Apple, or Toyota … or whoever) more exalted status than anybody else at a particular point in time. The inference must be that the lessons contained therein are especially appropriate for some parts of the business world at that particular point in time. That’s a long contextual wrapper: “some parts of the business world at that particular point in time.” It is just important that students (i.e. all of us) appreciate the contextual wrapper & moreover expect to develop intellectually by observing the patterns by which cases are selected for examination, as well as the lessons in the cases themselves. This is a subtle point, as I say, but it also one which I know is not news to you, David (or Trevor or Tudor). We know that Toyota can teach us things now but that later, because both we and the world itself move on, Toyota will be taught some things by us.

    So, this is it for me, I return to Tudor’s original post: “The company has pioneered a fusion of Fordist methods with a more Eastern philosophy of respect towards the environment, customers, and employees.” If Tudor is right (and he is usually!), then herein, somewhere, lies a set of lessons that are important to us now. Once we have taken them on then we are entitled to move on. But, for now, this “fusion” seems to be closer to the goal of ultrastability (?!) than the other catwalk contenders. We need to understand it. I do. I need to. Then, when we do, we are entitled to use the elegant ism, “Toyotaoism” to encapsulate it because, by then, we may be in the grip of a new fusion that is demanding our attention. We will need a shorthand.

    Great comments, David. Believe me, you will prosper in the blogosphere. I was a sceptic too but now I understand it as a creative, difficult, bottom-up process wherein some fundamental assumptions about ‘expertise’ are challenged. I remember the passage in Goldings great novel “The Lord of the Flies” when Jack’s more-primitive followers rejected Ralph’s imposition of the use of the conch upon meetings. It was, in that book, a step towards anarchy. I think that many would fear that blogs are Jack’s instruments (everyone can shout loudly). I wonder though. Many would also say that they are Ralph’s (everyone can have a turn). This is our great experiment.

    http://www.ikmagazine.com/xq/asp/sid.0/articleid.2C2815D0-47E2-4D64-B1FF-B9328A2D5342/eTitle.Thought_leader_Middle_men_are_in_for_a_hard_time/qx/display.htm

  14. David Howard says:

    In the absence of the formal OpDefs invited allow me to offer my best interpretations to try and conclude my disruptive offerings on this matter:

    (1) ‘Why the question?’ : Maybe because ‘the lessons contained therein are especially appropriate for some parts of the business world’ at a particular time and would make good course material.

    (2) ‘Better’ : One having claim to precedence to one other. (Perhaps the superlative is needed or rather, if I may propose, ‘preferred’ may be used)

    Celebrity business is as trivial as the catwalk you refer to – it is simply chance playing out with the benefits or otherwise of chance tamperings by’ very important people’. But it has one great advantage in that it appeals to those not prepared to invest intellectual energy into solving a problem. But let’s turn to use our preferred approach of using Ashby’s Law. The variety of any organisation – a human, a team or a company – is massive. So attenuation is essential if we are to try and manage the variation so that only the minimum is left to chance. For this model would be helpful. Any ideas? Umm…

    Of course if we over-attenuate we enter the realm of the Fourth Estate and only need wait for a day or three until the agenda has changed. However, as an aspiring MBA one day I will be in receipt of good money and recognise that I have a responsibility to attenuate to a requisite level – no more and no less. If I believe in case studies it is so much easier to follow a course of action, which after all is really based on ‘copying’. So I look around – cherry picking, why not – for something that fits. If it is GE, Toyota or IBM that fits the moment , then I already have an influential tool to wield from my position of authority and with which to shape my management team.

    The alternative – predictive theory – will be much harder. To create, promote and deliver a theoretical framework for achieving economic-quality company-wide obviously is foolishly ambitious for a public company with arbitrary quarterly targets to meet. However using the progressive skunk works model – kaizen – it is possible with constancy of purpose to achieve great things on an ever increasing scale within a large company with regard to the existing variety.

    So case studies must be the antithesis of Ashby’s thinking while the use of congruent theories from the fields of cybernetics, psychology, variation, and epistemology can be deployed to provide a surer way to proceed over the mid to long term. Above all the solution needs to be viable. Now there’s a thought, What about ‘Viablism’ as the sought after ism? It will ride out the changes of sentiment that are inevitable in a contingent world, Would that be better – oops, I mean preferred?

    (My colleague Trevor Hilder’s excellent paper ‘Viability versus Tribalism’ can be seen c/o Peter)

  15. Tudor says:

    I’m new to this blogging stuff. I welcome David’s invitation to seek some temporary closure with the promise of continuation in another place.

    This blog is in its infancy – not quite a month old, and I’m just experienced to know there arn’t too many folk out out there yet, preparing to join in the pattern-weaving spun from the thread. (It doesn’t quite work, that Lancastrian metaphor).

    I began with some news from the East which had caught my attention. It suggested a nice interchange of ideas across cultures which may be anticipation a rationale for a under-appreciated leadership style that might be emerging. I picked up the core ideas from some extended e-conversations with Fangqi Xu about his work in China and Japan, and then wrapped his ideas up in way I thought might help gain attention in this new e-marketplace. (Marketing as attention-grabbing, or Peter’s conceptual sweetie wrapping).

    I also believe there’s a lot of tricksiness around determining ‘best of show’ in anything in part because of the deep embeddedness of value judgements. So I wouldn’t attempt to place Toyota in a meaningful rank order with other firms. (Although in the UK, the DTI and ESRC have been encouraging such a search for quite some time, with predictable results, in search of productivity and effectiveness). Toyota just serves as an illustration from which various empirical conclusions and thoretical abstractions may be drawn. (If I understand the realist creed).

  16. Dear Tudor, Peter, David and others,

    Apologies to Tudor for mis-spelling Toyotaoism.

    Thanks for the exchanges over the last few days – most thought-provoking.

    I think I can suggest a useful way to think about the distinction between variation and variety. Variation is undesirable where uniformity of output is required. This is at the “mechanical” end of wealth-creation, the operational level (Stafford’s System 1). Variety is needed more and more as we move up through Stafford’s system numbering scheme, in order to match the variety coming at us from the environment.

    I think the major challenge we face in wealth-creation today is to disentangle these levels, and distinguish destructive variation from essential and constructive variety.

    Cheap ICT puts “rule-following idiots” at our disposal to do the boring stuff, but we haven’t really noticed this change. Our organisations aren’t getting much benefit from this, because we still haven’t understood how to use our people to best advantage, supported by ICT where it helps most.

    You can see how out of whack our thinking still is by watching “Master Mind” or “University Challenge” on the telly. Why is anyone impressed at the ability to memorise a lot of facts, when someone using Google and Wikipedia could outperform all the contestants?

    I am about to set up a private blog to explore these matters. Peter, David and colleagues will be founders, because it springs from recent conversations by email.

    Tudor, would you like to participate? I am sure we would all welcome your contribution.

  17. Tudor says:

    Blog away Trevor. I’d like to participate. If we follow the changes in the man-machine comepetitions e.g. in Chess we’ll be having the first ‘text an engine’ episodes of who wants to be a millionaire in the near future…

  18. David Howard says:

    Trevor prompts me to post another way of appreciating the difference between the key parameters of soci-technical change (variation and variety): true wealth creating activity must attenuate the inherent dangers of variation while amplifying the beneficial potential of variety. This is the essence of ‘viablism’. I now look forward to the debate continuing towards some actionable conclusions as proposed by Trevor since the purpose of analysis must always be insight leading to action. Without action we atrophy.

  19. peter says:

    As previously (and elsewhere) discussed.

    http://blogs.telegraph.co.uk/technology/shanerichmond/december06/shimonperes.htm

    Apart from this, I shall say no more for now. We need to invent a new social etiquette wherein, after a hearty blog debate, anyone of us is allowed to shout “Fore”, or similar, as an abbreviation for, “I say ladies and gentlemen, shouldn’t we take this conversation forward in the bar?”

    “FORE”

  20. Tudor says:

    Yes. Anyone else remember finite and infinite games?

    How about this?

    1 Someone – probably hapless initiator of the stream – could usefully attempt to review salient features. As an editor I’d be looking for the ‘big point’ which could make a book title or posting title. Why worthwhile ? Because otherwise the process avoids the tough questions (of the sort David began to ask) It helps move blogger towards a more articulated understanding. At least then the post begins with a personal interpreation, and ends with an attempt to indicate what if anything has changed for that person.

    2 This could become the start of a further posting.

    3 I also like the idea of fresh discussions breaking out with other contributors who can’t get to the bar…

  21. Paul Hollingworth says:

    Tudor said “I’d love to have get Stafford going on the topic of variation as harmful virus.”

    Stafford Beer was well aware of the virus of variability and like George Box & Edwards Deming he studied under RA Fisher.

    If you read Beer’s book “How Many Grapes Went Into The Wine” you will see that chapter 3 is called ‘A technique for standardizing massed batteries of control charts’. Some fascinating photographs of his device also!

    Regards
    PH

  22. Paul Hollingworth says:

    Tudor said: “Less flippantly, I would like some enlightment about where to start learning more about variation as a dangerous virus.”

    I use the virus analogy in the sense that it is passed on ‘hand to hand’ (or process to process) until it infects the whole system. It is also almost always amplified by the system, unless of course the manager understands how to attenuate its effects.

    I usually suggest ‘Understanding Variation’ by Dr DJ Wheeler (pub SPC Press) as a easy introduction to this huge subject field which is a foundation of ‘flow’ in the TPS.

  23. Tudor says:

    Paul. or these two posts my gratful thanks. This is an incredibly knowledge-rich network. I shall track down David’s book. This leaves me at the moment satisfied that another systems principle is being demonstrated, namely that if you want rich insights, look for where a couple of knowledge groups interface. I’m primarily attuned to the innovation, creativity and change literature. I am enjoying the compare and contrast with the contextual distinctions between such terms variation. It is hard to resist each new ‘jolt’. In creativity, one of our most distinguished systems theorists has been exploring flow as the state of unconscious competence within which effortless creativity emerges. But that is really for another posting, I’d say.

  24. Tudor says:

    Ola. Watch this space. The article on Toyataoism is written and will be published later this year in Creativity and Innovation Network journal.

  25. Tudor says:

    Update

    The article was published as mentioned above, and can be retrieved via

    http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-8691.2007.00445.x

  26. [...] of its respect for the creative management shown by Toyota over the years. We even coined the term Toyotaoism (with Professor Xu) for its unique management [...]

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