High performance management: Aspiring to be Toyota or General Electric

By Harinda de Silva
In todays highly competitive business environment, every organization wants to be the next Apple or Toyota or
General Electric. What is so special about these global giants? Apart from being massive global brands, these three
organizations are at top of the game when it comes to running their individual businesses. These organizations are
among the best high performance organizations in the world today.

Today many organizations are trying to move in to high performance business models from the traditional models to
be more effective than their competitors in the market place. Although there is no definitive definition for a high
performance organization, such an organization is distinguished from a traditional organization by being an
organization that keeps continuously adjusting to the external conditions to maximize its performance.

This is achieved by todays high performance organizations such as Toyota and General Electric by managing and
empowering their people differently than in a traditional organization.

Toyota Motors
There is a common Japanese saying in Toyota which goes as mono zukuri wa hito zukuri which translates to
English as making things is about making people. This simple statement gives us a good indication regarding
Toyotas philosophy on the Human Resource (HR) Management and the importance it places on developing its
people.

Toyota is world renowned for its famous Toyota Production System (TPS), which is the Toyotas version of a high
performance business model. Toyota is the benchmark for many high performance business processes such as Lean
Manufacturing and Continuous Improvement (Kaizen) Practices. All of these are components of the TPS.

However in the core of this successful model lies a strong culture of developing its people to their fullest potential and
to make them strong followers of the TPS. Hence they can be the drivers of TPS in the organization. Many elements
of the TPS such as Kaizen (a continuous improvement process) and 5S practices (a Japanese system of good
housekeeping in the workplace) cannot be imposed upon the employees by force. Even if an organization tries to
make their employees follow these practices only through rules and regulations, the final outcome will not be
successful and such practices will not be sustainable in the long term. Therefore the employees need to be
developed to embrace these practices on their own.

Within its factories and offices across many countries, Toyota uses every available opportunity during its day-to-day
operations to develop its people towards this goal. Apart from the formal classroom type training given to the
employees when they first join a Toyota plant, everyday events such as issues in the shop floor and resulting PDCAs
(Plan, Do, Check, Act A tool used in problem solving in TPS) enables the employees to learn continuously.

Another core element in the Toyota culture is that it expects all its managers to be teachers.
The long term commitment Toyota has made to develop its human talent is evident from the first principle of the 14
guiding principles defined in the Toyota Way. The Toyota Way is considered as the authoritative guide to TPS to all
outsiders of Toyota.

Their employees learn and develop the skills required to practice various elements of the TPS. They are the ultimate
drivers of the TPS and the teachers to the next generation of employees.

General Electric
Similar to Toyota, General Electric too makes a strong emphasis on the importance of having a high performance
workforce to drive GEs high performance business model. As Jack Welch, the legendary former Chairman and CEO
of GE said in his first address to the Wall Street analysts in 1981, he wanted GE to become the most competitive
enterprise on earth, where people dare to try new things, where people feel assured in knowing that only the limits
of their creativity and drive, their own standards of personal excellence, will be the ceiling on how far and how fast
they move.

How GE harnesses its human resources to be one of the most competitive enterprises on Earth can be broadly
divided into two areas. First of these areas is the Training and development of GEs talent. Generally GE attracts
the brightest of talent for their entry levels rolls. However GE has rarely hired from outside for their top or senior level
positions. Therefore GE has a very good system in place for training, developing and grooming their people to grow
with the organization. These employees will eventually fill the senior ranks of GE and they will ensure the
sustainability of GE as a high performance organization.
The second area in GEs process of harnessing its HR is the stringent performance management system.

The performance management process at GE consists of a forced ranking system of its employees to groupings of
20:70:10. These groups are categorized as the Top 20, Vital 70 and the Bottom 10.
In this Vitality Curve as it was called by Jack Welch, the top 20 are the top performing employees of the
organization and they are generally earmarked for further development and to rise up the leadership ladder. Vital 70
are the competent performers who continue to perform at the required level. The bottom 10 consists of the poor
performers of the group and generally they were shown the door.

Comparison of Toyota and GE HR processes

We can see a number of similarities as well as contrasts between Toyotas and GEs processes of managing their
human resources to drive each organizations high performance business models
In Toyotas approach to harnessing their HR, the following main characteristics can be seen.

1. Toyota is focused on relentlessly developing the individual talent to meet the organizational needs. This is a
continuous process and in our view this is in line with Kaizens other concepts in the Toyota Production System. This
is a vital element in the organizational culture of Toyota.

2. Focus on collaborative work rather than individual glory. The managers and the peers are part of the organization-
wide teaching and learning culture. Therefore there is no room for individual performance requirements to clash with
team performance requirements. This helps to foster team work among the employees. We believe this characteristic
of Toyotas process stems from the Asian cultural roots of Toyota.

3. There is no categorizing and branding of non performers. Toyotas culture drives all employees to learn, develop
and perform. Perpetual non performers who fail to uplift their performance levels even after training and development
opportunities will eventually leave the organization.

In GEs approach to harnessing their HR, the following key elements can be identified.

1. GE places great importance on hiring, training and development in order to ensure that their employees are the
best performing lot in the market. GE views high performance of employees as a vital element that gives GE a
competitive advantage in the market.

2. GE has a stringent policy of weeding out non performers. However in our opinion this policy has its own pros and
cons.

The pros would be: (A) Faster route to creating high performance teams by removing the weak links rather than
spending time and resources on developing these week links to be better performers, (B) Pressure created by this
process on employees, forces them to improve their performances to match the GE requirements without any
managerial involvement, (C) Creating opportunity for new blood to come into the teams through the openings
created.

The negatives are: (A) Unhealthy competition would be created among the team members due to the requirement to
maintain a good ranking for their individual performances. This can lead to a situation where individual goals can
undermine the overall team and organizational requirements, (B) Distrust can be created among the employees
regarding how the individual rankings were determined, thus exposing the organization to legal issues and litigations.

Develop your own high performance workforce

As we saw in Toyotas and GEs models, one of the main drivers of a high performance business model is the people
of the organization. Therefore one of the main requirements is to have effective HR management policies and
processes to harness the best out of the HR an organization has.
Although there are many differences among the HR strategies of todays global high performance organizations,
there are key elements or best practice that any aspiring high performance organization can adapt as their own,
Therefore a few key elements in this area would be:

1. Having a strong learning culture in the organization, where all ranks of employees teach and learn using all
available opportunities. These opportunities could vary from formal class room type training programmes to learning
from events in the shop floor.

2. Stringent performance measurement and review processes linked to ranking employees according to their
performances. However unlike in the GE processes, all employees should be given a fair opportunity to improve their
performances. Only the repeated poor performers will be asked to leave the organization.

3. Rewards and growth opportunities for the top performers that will stimulate the need to learn and perform among
the employees.

Using the above, organizations can tailor-made HR management strategies to harness HR to drive their own
organizations towards high performance business mo
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Customer First and Quality First

Measures
Sustainability Data Book 2016
[Customer First and Quality First Measures] (PDF, 475 KB / 5 pp.)Find out more
Basic Philosophy regarding Customer First and Quality
First
Quality is the result of collaboration among development, design, procurement, production,
sales, after-sales service and other areas. At Toyota, quality includes product quality, sales and
service quality, and the quality of the work performed by each employee that serves as the
foundation supporting the other aspects of quality. We believe that the combination of these
three constitutes quality and it is only when all three aspects of quality are secured that we can
provide products and services that can gain the trust of customers. The origins of quality lie in
the spirit of audit and improvement, and Toyotas unchanging monozukuri (manufacturing)
pursues ever higher quality through continuous improvement based on repeated implementation
of PDCA.
Organization and Structure
Toyotas Quality Function Policy was implemented to rebuild Toyota as a Quality Leader that
exceeds customers expectations by recognizing work fundamentals, with employees making
every effort to set up focused activities for the year.
In addition, Toyota has appointed Chief Quality Officers (CQOs) in Japan and other regions
around the world to address regional issues and promote global collaboration. In 2012 the
Customer First Promotion Group was established to build in-house systems for quality
improvement from customers perspectives.
Coping with Quality Troubles

In line with our Customer First Principle, Toyota is encouraging employees to work on their own
initiative to improve product quality; at the same time, it provides prompt actions in preparation
for an emergency. When identifying a recall, quality failure is not only recognized based on legal
compliance but is also considered from the customers standpoint putting safety and security
first.
[ Major Initiatives during FY2015 ]
Sharing Information on the Current Status of Quality Measures Globally through the Global CQO
Meeting
Promotion of Awareness Activities and Creation of Structures to Maintain Focus on the Lessons
Learned from the Series of Recall Issues.
Ongoing Quality Education Programs for Employees on Quality Month
Applying Customer Feedback to the Creation of Better
Products and Services
Toyotas principle of Customer First exists for the purpose of providing customers with products
and services that earn their smiles. On this basis, Toyota hopes to offer cars with superior
features in terms of environmental, safety and quality performance, while also offering the
intrinsic appeal of cars, such as driving performance, at an affordable price. Therefore, in order
to make Ever-Better Cars, Toyota makes rigorous use of customer opinions gleaned from dealers
and the Customer Assistance Center.
Toyota Customer Assistance Center and Lexus Information Desk

The Toyota Customer Assistance Center, and the Lexus Information Desk, offer toll-free phone
consultation 365 days a year and accept brochure requests 24 hours a day in Japan.
[ Major Initiatives during FY2015 ]
Ongoing Customer First Staff Education
Basic Philosophy regarding After-sales Service
Better service and better cars are, as it were, the two wheels of the cart. Customer car use
requires regular check-ups, legal check- ups, and repair due to breakdown or accidents. After-
sales service will continue supporting Toyota and Lexus brands during the customers
ownership. Toyota is trying to provide better services under the umbrella of the 3S Spirit
(Seikaku + Shinsetsu = Shinrai: Accuracy + Caring = Trust) so that our customers can enjoy a
long use.
Organization and Structure
Currently in Japan the after-sales services are delivered by about 310 companies, about 5,000
dealers and parts distributors, totaling about 46,000 service staff members, while overseas there
are about 170 companies, 10,000 dealers, or 134,000 service staff members. Toyota has set up
education systems and facilities in individual regions. At the same time, by focusing on Tajimi
Service Center, we are trying to improve the knowledge and skills of our global service staff.
[ Major Initiatives ]
Global Learning Facility, Tajimi Service Center, Accumulation of Service
Technology
Initiative with Toyota National Dealers Advisory Council to Listen to Customers
Feedback