Posted on Friday, 27th April 2007 by LMN
As a professional advisor to business, I have had the opportunity and pleasure to work with some of the most successful companies in the world. The teams at the helm of these high performing companies are dedicated and hard working - just like you. Each companies experiences cycles of growth and abundance - then contraction and replenishment. If they have a process for sustaining growth through the contraction phase they eventually experience the growth and abundance phase again, and the cycle continues endlessly.
At the core of this growth cycle is a common process known to every successful company (regardless of size) that has been able to sustain success. It is the process of thinking, planning and doing. Of course, most leaders believe that they already think, plan and do - but unfortunately they mostly just… do.
The path for companies that don’t adhere to a disciplined think-plan-do process is also familiar. They tend to get caught in the do-react-do loop. This is when the company is always just a step behind; their capacity or productivity is too low, or their market is growing too fast. This reactionary approach to doing business gradually becomes a part of the culture as the company gets used to doing business this way, as new employees are hired for their ability to “self start” and thrown into the chaos, and as the company gets so far behind that the thought of getting “caught up” is no longer an option. Contrast this with what Toyota’s CEO, Katsuaki Watanabe says about his approach to growth:
I attach the greatest value and importance to quality; that lies at the root of my management style. It’s critical for Toyota to keep making the highest-quality vehicles in the world-the best products in every way, manufactured without any defects. Unless we enhance quality today, we can’t hope for growth in the future. That’s why we are investing in the development of new technologies, new processes, and human resources. My top priority is to ensure that we do that resolutely, sure-footedly, and in a thorough fashion.
The HBR Interview, “Lessons From Toyota’s Long Drive”, July - August 2007
A quick look at Toyota’s numbers to put Mr. Watanabe’s quote into context:
In 1970 GM had a 40% chunk of the U.S. car and light-trucks market, whereas Toyota had only a 2% sliver. Toyota’s market share inched up to 3% in 1980, to 8% in 1990, and to 9% in 2000, entering double digits for the first time only in 2006, when it rose to 13% and GM’s fell to 26%
In March 2007, Toyota posted a profit of $13.7 billion, whereas GM and Ford reported losses of $1.97 billion and 12.61 billion, respectively, in 2006
Toyota’s market capitalization on May 10, 2007 - of $186.71 billion - was more than one and a half times GM’s ($16.60 billion), Ford’s ($15.70 billion), and DaimlerChrysler’s ($81.77 billion) combined
The HBR Interview, “Lessons From Toyota’s Long Drive”, July - August 2007
Now that we have some context, let’s take a moment to drill into Mr. Watanabe’s meaningful message. He begins with what is obviously Toyota’s most important core value - Quality. Actually, any company that makes a product should have quality as its primary core value, for what else is there? He then further defines quality as the best products in every way and without any defects - specific and to the point. Next he ties quality to future prospects for growth - “no quality, no growth”. Then, he presents Toyota’s current activities; investing in and developing people, process and technology (the only way to ensure superior execution) as the way they will drive future growth. Finally, he wraps it all in a euphemism for the Think-Plan-Do process. When he says “resolutely” he is saying disciplined and unwavering; “sure-footedly” conveys thought and planning; “thorough fashion” communicates a thoughtful, comprehensive and detailed process. Think-plan-do!
I would say that Toyota has built an unstoppable growth platform, and think-plan-do is a central component. It can be for your company as well. Here’s how:
Before you Do anything take some time (even just a brief moment) to Think and Plan first. Resist the urge to start before you have developed a well thought out plan worthy of your team. Also, make this a regular part of your leadership process and pick a time to do it at least once every year.
1. THINK
a. Capture and analyze the data that describes the previous periods performance; the current state of your people, process and technology productivity; your competitor’s activities, strengths and weaknesses; your customer’s wants and needs
b. Identify and define your core purpose and goals. Quality as a core purpose for manufacturers, and goals that are specific to your company and its market situation. Satisfaction (measured on a scale of horribly unsatisfied, somewhat satisfied, satisfied, pleasantly surprised, completely delighted) for service providers
c. Determine specifically what you will do to improve your quality and/or satisfaction levels
2. PLAN
a. Plan the quality / satisfaction improvement projects
b. Plan the activities to ensure that your existing quality / satisfaction levels do not suffer while you are taking on improvement projects
3. DO
a. Execute the plan
b. Measure and capture the results
c. Prepare the results for the next Think stage
Remember, that the power is in repeating the process, so don’t get caught in a do-loop. Make sure you continue to think and plan before you do.
Growth is Good!
Leamon Crooms
The Guru of Growth®
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