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The Toyota Way

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Re: The Toyota Way

#11

Post by rectang »

Someone1234 wrote: post #2

How do you maintain "Principle 1" while being a publicly traded company? The way the stock market is designed (and the fact that stockholders often get to appoint the board who gets to appoint the CEO) means they're going to put short term profits over long term viability. Many companies have been ruined and continue to be ruined by this short-term-ism chase for quarterly and yearly profits. For example look at the f…

> Many companies have been ruined and continue to be ruined

You say "ruined", I say "fulfilled their ultimate purpose as disposable wealth-extraction machines enriching executives".

I totally agree that the stock market's design encourages short-termism. But this is entirely appropriate in service of the idea that heroic individuals are chiefly responsible for company outcomes.

Re: The Toyota Way

#12

Post by gotts »

radcon wrote: post #4

They should call this "The Deming Way" since most of it sounds identical to Deming's management philosophy and he taught Toyota back in the 1960s[1]. His system also had 14 points, which probably isn't a coincidence[2]. [1] https://blog.deming.org/2016/10/toyotas-management-history/ [2] https://en.wikipedia.org/wiki/W._Edwards_Deming

Thanks for sharing! Good read

Re: The Toyota Way

#13

Post by martin_a »

thendrill wrote: post #3

That shit works only if you are Japanese.... Have Japanese mentality and work culture... Also your product is a car.. Or something tangable made on a production line.... Agile IS the Toyota way... Or at least tries to be

Nah. I see some of those points could very well be adapted to German companies.

And focussing on long-term growth and stability is probably one of the main aspects of the German "Mittelstand" (medium companies, often led by families over generations) which usually has a strong focus on providing a sustainable place to work and therefore not optimizes its business for shareholder value.

Re: The Toyota Way

#14

Post by peterwwillis »

Someone1234 wrote: post #2

How do you maintain "Principle 1" while being a publicly traded company? The way the stock market is designed (and the fact that stockholders often get to appoint the board who gets to appoint the CEO) means they're going to put short term profits over long term viability. Many companies have been ruined and continue to be ruined by this short-term-ism chase for quarterly and yearly profits. For example look at the f…

It's just a different kind of business. Car companies have multi-year release cycles, deal with complex logistics chains, and sell expensive products, so they have to plan for the long term. If your company lives and dies on the release of your next car, you're screwed.

Re: The Toyota Way

#15

Post by bluGill »

Someone1234 wrote: post #2

How do you maintain "Principle 1" while being a publicly traded company? The way the stock market is designed (and the fact that stockholders often get to appoint the board who gets to appoint the CEO) means they're going to put short term profits over long term viability. Many companies have been ruined and continue to be ruined by this short-term-ism chase for quarterly and yearly profits. For example look at the f…

While that is a common statement, it isn't really true. Most stock holders have figured out that long term profits are important as well. Companies that only focus short term go out of business quickly and so are worth less than companies who will be around longer.

Most shareholders (37%) are retirement accounts which have long term goals.

Re: The Toyota Way

#16

Post by magduf »

Someone1234 wrote: post #2

How do you maintain "Principle 1" while being a publicly traded company? The way the stock market is designed (and the fact that stockholders often get to appoint the board who gets to appoint the CEO) means they're going to put short term profits over long term viability. Many companies have been ruined and continue to be ruined by this short-term-ism chase for quarterly and yearly profits. For example look at the f…

>How do you maintain "Principle 1" while being a publicly traded company? >The way the stock market is designed... means they're going to put short term profits over long term viability.

It's simple: be Japanese and not American. Japanese companies don't have this kind of problem, precisely because they aren't American and their society doesn't value enriching executives over all else, and instead values a stable and harmonious society.

Re: The Toyota Way

#17

Post by radcon »

gotts wrote: post #12
radcon wrote: post #4

They should call this "The Deming Way" since most of it sounds identical to Deming's management philosophy and he taught Toyota back in the 1960s[1]. His system also had 14 points, which probably isn't a coincidence[2]. [1] https://blog.deming.org/2016/10/toyotas-management-history/ [2] https://en.wikipedia.org/wiki/W._Edwards_Deming

Thanks for sharing! Good read

Thanks for reading! I think Deming is extremely under-appreciated.

It seems like Six Sigma is all anyone talks about in terms of management philosophy these days...

Re: The Toyota Way

#18

Post by magduf »

martin_a wrote: post #13
thendrill wrote: post #3

That shit works only if you are Japanese.... Have Japanese mentality and work culture... Also your product is a car.. Or something tangable made on a production line.... Agile IS the Toyota way... Or at least tries to be

Nah. I see some of those points could very well be adapted to German companies. And focussing on long-term growth and stability is probably one of the main aspects of the German "Mittelstand" (medium companies, often led by families over generations) which usually has a strong focus on providing a sustainable place to work and therefore not optimizes its business for shareholder value.

His post would have been correct if he had omitted the word "only". As you've pointed out, it isn't only Japanese culture that values long-term stability and value to the society. The problem is that American culture absolutely does not value this stuff, and that's why our companies work the way they do.

Re: The Toyota Way

#19

Post by TeMPOraL »

Someone1234 wrote: post #2

How do you maintain "Principle 1" while being a publicly traded company? The way the stock market is designed (and the fact that stockholders often get to appoint the board who gets to appoint the CEO) means they're going to put short term profits over long term viability. Many companies have been ruined and continue to be ruined by this short-term-ism chase for quarterly and yearly profits. For example look at the f…

After reading countless stories about companies big and small, I came to conclusion that if you want to build a company that has a mission and/or a moral compass, under no circumstances you should ever give any degree of control to people who are not in on the mission or do not share the same moral direction. From this follow at least two rules:

1) Never ever go public.

2) Never ever accept VC money.

Problem is, you'll likely get outcompeted by companies that do either or both of these things.

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