Habits can ruin your life or make it better. You choose which habits form your lifestyle, but can corporations choose the habits that form the behavior(s) present in its workforce?

Toyota was once again in the top 50 of the Forbes Global 2000: Top Regarded Companies ranking for 2017¹. American companies did well, but most are not in manufacturing. Why?

U.S. companies continue to make management decisions based on return on investment (ROI) calculations and executives setting production targets (regarded as the GM management model). Middle managers chase these targets and do what they need to do to make their pivot charts and reports meet executive management’s objectives. This is not what Peter Drucker had in mind in his book, The Practice of Management, when he outlined managing by objectives. The GM model is a short-term management goal and does not consider long-term sustainability. Toyota uses the ROI calculation to assist in determining how to obtain a desired condition, not for determining what to do.

Ford Motor Company once built plants that tried to achieve a contiguous flow. Toyota learned from this and, in trying to achieve a contiguous flow, developed a process of decision-making. Plan-do-check-act (PDCA) is a quality control tool made popular by Dr. W. Edwards Deming and is a solid foundation of this decision-making process. This process is a behavior taught and reinforced at Toyota. It is similar to how martial arts are taught by repeating proven techniques and form until it is natural to the student. This is known as kata. Sounds like forming a habit, doesn’t it?

Since the 1970s, American manufacturing companies have been chasing Toyota in quality and efficiency. According to the Forbes Global 2000, they still are. Why?

Leadership: The days of GM style management are coming to an end. Sustainability will be the new model concept, with dynamic characteristics that adapt to each asset, each entity and each industry. Although profits, ROI and production goals are still very important, the focus will change to long-term contiguous, not continuous, flow in manufacturing. Amazon did not get to where it is today by trying to imitate Walmart. Rather, Amazon leadership recognized new shopping habits and capitalized on the opportunity. Amazon’s leadership set sail on a new horizon and built a business based on what was on the horizon, not the body of water it was in.

Middle Management: Once leadership is on board and has set sail toward a dynamic new world of contiguous flow, middle management needs to keep the ship afloat and on course. There will be storms, such as government regulations, taxes, stockholders, economy, competition, etc. The horizon may seem further away at times, but leadership must enforce the course/vision and middle management must enforce the work habits to get there. There are so many tools available today to manage assets. The International Organization for Standardization’s ISO55000: Asset Management or similar management models give leadership and management guidelines to manage assets, whether it is people, intellectual property, machines, structures, etc. Six Sigma, lean management, reliability-centered maintenance, the Internet of Things and other tools are available to track, measure and document quality, production, maintenance and management metrics.

Training: Train, cross-train and retrain. Always invest in training and improving people’s skill level, work related or not. Nonwork-related training keeps people happy and motivated if the opportunity to learn/increase skill level is in something of interest to them. This usually pays off with higher employee morale and loyalty. Learning and developing skills is a habit you want employees to develop and transfer to work related skill development. Cross-train your employees in other areas. When a person of one discipline learns the day in the life of a person in another discipline, there is better respect and understanding between them. Cross-functional barriers are removed and cross-functional teams are created. Identify the habits required to obtain the behavior desired for each employee position and the company, then create training exercises to reinforce forming and keeping these habits. Think of habits as being the critical parts required for your human/company behavioral system and what is needed to keep this system running.

Hiring: Are you still hiring the same way and from the same pool of people you have been hiring from for 10 years and wondering why your results have not changed? Make a list of the skills, habits and traits for each position and hire people having those skills, habits and/or traits. Do not hire because they have experience in the industry. Older applicants who have a thirst for learning are great employees because they have a lot of developed skills, as well as the drive to learn new things. Previous small business owners who have successfully grown into a larger company tend to have the PDCA mentality. There are a lot of fish in the ocean and maybe you are fishing in a pond.

Feed the funnel: Be proactive with local school systems. Schools are the top of the funnel for future employees. If you want a great employee pool to choose from in the future, you better start today with making sure the proper skills and habits are developed early in the education system. The journey will be a long one if you are doing it right. Make sure your ship has the people it will need in the future to fulfill the voyage.

Implementation: Implement “The Toyota Way,” the “Toyota Kata,” or a master-mentor-apprentice training program. Each company needs to develop and teach a new process of problem-solving, critical thinking and continuous improvement until it becomes a habit instilled in each employee from the top to the bottom. Improvement, adaptation and change should be dynamic within a company. Employees at every level shall be a master, mentor and apprentice, all at the same time.

Change does not happen overnight. As the expression goes, the only way to eat an elephant is one bite at a time. Of course, the only way to create a new healthy habit is to break the old unhealthy habit. How do you do that?

1. Admit the current process is not sustainable and is a reaction to current conditions (e.g., management, economic, political, etc.).
2. Recognize that egos get in the way of progress. Put egos aside and the company’s greater purpose first, once a new, contiguous flow vision has been identified. If there is no company, there will be no jobs.
3. Examine past behaviors (i.e., habits), rules, company policies, accounting, logistics, operations and maintenance procedures with the assistance of a third party. “This is how we have done it for years” needs to be abolished and silos destroyed. Fresh eyes from outside the industry will help.
4. PDCA: Start making changes, but monitor and learn from them. This includes managerial, operational, mechanical and behavioral changes.
5. Learn new habits. Each level of management and each employee at every level will need to learn new habits. The old way is over. Identify this new behavior pattern and train, enforce and act to support it. Get third-party support to assist in training, monitoring and changing until the core employees have made the new system a corporate habit. Review PDCA. Are you still heading to contiguous flow with these changes, behaviors and habits?
6. Help others who want to make a change. Go to seminars, workshops and conferences with like-minded companies within or outside your industry. This will provide a support group, but also a group that will be rich with ideas.

Change will not happen overnight. This is a long-term commitment for sustainability. Each company and each industry need to find its own path. What works for one place may not work at another. What works in one part of the world or country, might not work in another. PDCA starts with an individual and ends with the team. Creating new habits will, in turn, create new behaviors, which will lead to new beliefs, which will transform to a new company culture of sustainability! Set sail today and hope to see you on the horizon!

Reference

1. www.forbes.com/top-regarded-companies/list/