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The Toyota Way Starts with Long-Term Philosophy

This post is part of a short series that will walk you through the 14 principles of Toyota’s production system (TPS) as described in Jeffrey Liker’s book, The Toyota Way, and provide you with practical tips on how and why to apply these principles at your own workplace.

We live in a world of instant gratification and attracting and keeping stakeholders is at the top of company’s priorities list. Thinking about long term goals can be daunting and although most companies have short and long term plans, sometimes the main focus goes to solving problems in the now and “putting out fires”.

This brings me to the first principle of the Toyota Way, a book by Jeffrey Liker which focuses on the management principles and business philosophy behind Toyota's worldwide reputation for quality and reliability.

The Toyota Way, Principle #1: ​“Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.”

These are the main points from this principle:

  • “Have a philosophical sense of purpose that supersedes any short-term decision making. Work, grow, and align the whole organization toward a common purpose that is bigger than making money. Understand your place in the history of the company and work to bring the company to the next level. Your philosophical mission is the foundation for all the other principles”
  • “Generate value for the customer, society, and the economy—it is your starting point. Evaluate every function in the company in terms of its ability to achieve this.”
  • “Be responsible. Strive to decide your own fate. Act with self-reliance and trust in your own abilities. Accept responsibility for your conduct and maintain and improve the skills that enable you to produce added value.”

A long-term philosophy acts as a guiding light for your organization and culture and, with strict adherence and a deep respect of the philosophy, can drive the company focus indefinitely. If based on deep, meaningful values, your company’s long-term philosophy cannot be easily undone and will serve as the compass for all major company decisions, projects and goals. And, if lived and practiced by your leaders, it can shape employee behavior and increase motivation and productivity. We all crave doing work that matters and are constantly in search of why. Why do we do what we do? Why does it matter? Why should we care? Taking the time to determine your company’s long-term philosophy is the first step in providing that sense of purpose and answering those whys for your employees and customers.

To some, this may seem like the pseudo side of business. Who has time to care about culture and philosophy and values? We should be focused on KPIs and metrics and data and sales numbers. Those things definitely matter and can guide you to better product development and help you achieve company goals, but without setting a long-term philosophy, your company is destined to lose focus and eventually fall into the trap of chasing the latest revenue stream or “next big thing”. The days of the hard-selling Gordon Gekko’s are coming to an end, and it’s not just employees asking, “Why should I care?” You now have to answer that question for your customers as well, and if your only response is the price...they’ll definitely go somewhere else. 

By setting your company’s sights on something far beyond short-term financial goals, you are destined to build a culture and environment that can withstand market volatility, changing trends, new technology and workforce changes. 

Suggested Content:

Balance Long-Term Procurement Planning with Short-Term Agility

Balance Long-Term Knowledge Management Strategy with Short-Term Goals

Strategic Planning and Implementation Best Practices for Achieving Organizational Agility: Best Practice Report

Please note that some pieces are available to nonmembers of APQC, while some are only available to members. APQC membership gives you access to so much more. See if your organization is a member and register today!

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