Posts selected fromManagement Blog - Engineering Blog - Investing Blog and other blogs - Toyota Engineers a New Plant: the Living Kind
Toyota’s vision:
First, making things that benefit both people and the world as a whole.
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Second, as a member of society, we must fulfill our responsibilities to all stakeholders. We must provide to customers cleaner, safer, and more attractive products with excellent value. To shareholders, we must enhance share value through long-term and stable growth by increasing profits and paying appropriate dividends. With business partners, we must engage in fair business based on a spirit of mutual benefit.
To our employees, we must provide a workplace where they can work with pride based on mutual trust and responsibility between labor and management, and respect for people.
continue reading: Toyota Engineers a New Plant: the Living Kind - Six Keys to Building New Markets by Unleashing Disruptive Innovation
Unfortunately we do not often stop to examine the theory and therefore fail to learn as we should as we experiment and get new results. The most effective way I know of to improve the learning is to use the PDSA cycle, predict the effects of change and then examining the results of change. As simple as those two acts are, they are skipped far to frequently.
His second point, that managers frequently use overly simplistic models or theories is also important. Management is not well suited for simple theories that can be applied in any situation. Many interdependent variables are often at play and management requires not application of simple rules but applying knowledge in complex situations as best you can. Management is challenging and simple answers are often of little value – even though they are desired. continue reading: Six Keys to Building New Markets by Unleashing Disruptive Innovation - Managing Innovation
You manage processes such as thinking up a new way to use computer technology differently than you manage a process to manufacture tires. But the idea that you don't manage and improve the process just because the process seems discontinuous is a mistake. continue reading: Managing Innovation - Innovate or "Play it Safe: to Avoid Risk
There are many reasons why avoiding risks is smart and should be encouraged. But when avoiding risks stifles innovation the risks to the organization are huge.
Playing it safe isn't always safe. In rapidly changing markets (which are quite common lately) "playing it safe" is often riskier than "taking chances" on new ideas. continue reading: Innovate or "Play it Safe: to Avoid Risk - Goofy but Widespread Thinking
I can’t really understand why people seem unwilling to do the simple known things to improve performance. But there does seem to be the attitude that we need to find secret or fantastic new ideas in order to improve.
People seem to think: “I can't just read some idea in a book published 30 years ago and improve. If it were that easy everyone would be doing it.” Well it isn’t quite that easy but it is close. continue reading: Goofy but Widespread Thinking - Agility vs. Six Sigma
Some people dislike the idea of managing processes. In my experience they then invent the idea that slow, boring process improvement is an alternative to innovation. That is just wrong. Process improvement should be part of a well run system, as should innovation. Deming, who many believe focused only process improvement, knew the importance of both. See several of Deming’s ideas on innovation. continue reading: Agility vs. Six Sigma - Innovation at Toyota in Developing the Prius
By the end of 1993 the development team had determined that higher oil prices and a growing middle class around the world would require the new car to be both roomy and fuel-efficient. Other than that, they were given no guidance. “I was trying to come up with the future direction of the company,” says Watanabe, who headed corporate planning at the time. “I didn’t have a very specific idea about the vehicle.”
Investing in innovation is risky. If successful, the benefits can build a competitive advantage that is difficult for others to eliminate. However, others will try and if you fail to execute as well in the future those benefits can disappear quickly. Toyota shows few signs of letting others catch up though.
continue reading: Innovation at Toyota in Developing the Prius - Better and Different
The answer, as I see it, is to be better and different (when necessary).
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if you have to choose one, just being better will work most of the time. The problem is (using an example from Deming, page 9 New Economics) when, for example, carburetors are eliminated by innovation (fuel injectors) no matter how well you make them you are out of business.
Often people mistake Deming’s ideas as only about being better. He stressed not only continual improvement (Kaizen, incremental improvement, SPC) but also innovation. He stressed innovation both in the normal sense of innovating new products for customers and also innovation in managing the organization. continue reading: Better and Different - Improving Engineering Education
Olin’s aim is to flip over the traditional “theory first, practice later” model and make students plunge into hands-on engineering projects starting on day one. Instead of theory-heavy lectures, segregated disciplines, and individual efforts, Olin champions design exercises, interdisciplinary studies, and teamwork.
This requires radically changing the normal university education model. To me this is definitely a different versus better (see last post) improvement effort. It will be interesting to see the success they achieve going forward. It almost makes me want to go back to school. continue reading: Improving Engineering Education - Innovation Example: Farecast (2006)
 Farecast provides data and analysis to those looking to purchase airplane tickets. The graph above shows ticket prices for tickets between Boston and Washington DC over the last 60 days. I have thought for quite some time I need better data to make the best purchase decisions. Farecast seems like a great fit.
The airlines attempt to maximize their profit by changing ticket prices. This pricing model is different than most pricing options I face, normally the price is pretty much set: with the possibility of sale prices. continue reading: Innovation Example: Farecast (2006) - Our Policy is to Stick Our Heads in the Sand
The failure to adapt to a changing world (the internet is here to stay folks) is amazing. Most companies would benefit from just adapting to the changing world without elaborate innovation plans. Innovation is great, but challenging. Don’t ignore the possible improvements short of innovation. continue reading: Our Policy is to Stick Our Heads in the Sand - Toyota Homes
I still am surprised Toyota isn’t doing more with mass transit but they obviously know more than me. Toyota partner robots are a good strategic vision in my opinion.
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Could Toyota’s efforts beyond automobiles create problems over the long term? Yes. But Toyota’s solid management system is built with the knowledge that change is inevitable (Toyota’s Early History – Toyota was a loom maker before moving into the automobile industry). If Toyota wants to prosper in the future it needs to contoinue to grow and adapt and take risks. continue reading: Toyota Homes - Quality and Innovation
I really don’t understand how people can talk about innovation as if it were some new discovery. Yes I understand we can bring a different focus to innovation. We can reconfigure management structures to encourage and support innovation. That is good. And new ideas are being developed, but the innovation fad is silly. And accepting the notion that this innovation stuff is some new idea will make managers less effective than if they understand the past.
New Economics by W. Edwards Deming, published in 1992, page 7:
Does the customer invent new product of service? The customer generates nothing. No customer asked for electric lights… No customer asked for photography… No customer asked for an automobile… No customer asked for an integrated circuit.
Innovation has long been important to those interested in management improvement. continue reading: Quality and Innovation - How Google Works
Google was driven from the beginning by engineers that sought to do what was best. Since those engineers were the founders of the company and still run the company Google has been able to keep the focus not on what is accepted as conventional wisdom but what actually works best. Google understands when you experiment things might not work out. Google’s solution is to experiement quickly and fail early (turn the pdsa cycle quickly). That is something every organization can apply. continue reading: How Google Works - Interviews with Innovators
The very first thought in my mind was, “I think I signed a document that everything I design belongs to Hewlett-Packard.” Even just on my own time, I thought that they deserved it first. And I wanted Hewlett-Packard to build this. I loved my division. I was going to work there for life. It was the calculator division; it was the right division to move into this kind of a computer.
I went to management, and I had three levels of bosses above me in a room and a couple of other engineers, and I presented the ideas and told them what we could do at what price and how it would work. They were intrigued by it, but they couldn’t justify it as a Hewlett-Packard product for some good reasons. Hewlett-Packard couldn’t do a simple project, which was really what was interesting.
Steve Wozniak, on what became Apple. continue reading: Interviews with Innovators
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