The Role of The Executive in Lean: A Qualitative Thesis...

ARTICLE IN PRESS

Please cite this article in press as: S. HUGHES, P. MARKSBERRY International Journal of Lean Thinking (2011)

International Journal of Lean Thinking Volume 2, Issue 2 (December 2011)

Lean Thinkingjournal homepage: www.thinkinglean.com/ijlt

The Role of The Executive in Lean: A Qualitative Thesis Based on The Toyota Productions System

P. Marksberry* University of Kentucky, College of

Engineering, Center for Manufacturing, 210B, CRMS Building, Lexington, KY 40506-

0108 E-mail Adres: [email protected]

S. Hughes University of Kentucky, Electrical

Engineering, Electrical Systems Manager, UK Solar Car Team

A B S T R A C T K E Y W O R D S

A R T I C L E I N F O

Lean Manufacturing, Toyota Production System,

Executive, Management,

Leadership,

Latent Semantic Analysis.

Received 10 May 2011

Accepted 13 May 2011

Available online 19 May 2011

Lean manufacturing (Lean), as evolved from the Toyota

Production System (TPS), has gained traction in many businesses

as a tool for efficiency and improvement. However, the role of an

executive or general manager within a Lean organization has not

been clearly articulated in any official or proven way. This

research looks at common approaches, theories, and problems

concerning the role of the executive and how it can affect

companies in their efforts to adopt Lean tools and principles.

This research also analyzes a few internal documents from Toyota

in order to ascertain how the role of the executive or general

manager is expected to function within Toyota’s organizational

and operational structure. Results showed very strong trends in

the way Toyota presents and uses this role in maintaining Lean

practices. Specifically, it was found that Toyota favors for its

executives and managers a fair distribution of time between the

office and the shop-floor, vertically-oriented training relationships

with subordinates, and an emphasis on the culture and mindset

behind the TPS.

________________________________

* Corresponding Author

1. Introduction

The purpose of this research is to articulate the role of the executive or general manager

within a Lean/TPS organization. There are three primary issues that must be uncovered and

illuminated in order to effectively determine this role. The first is the executive's time management.

How much time should the executive spend outside of the office on the shop-floor (i.e. with the

employees)? This is a tough question to answer concretely, and it will certainly vary from one

executive to the next. However, there are general trends set by some companies, such as Toyota,

that have proven to effectively maintain a proper relationship between the levels of the

employment hierarchy. As Bates (2010a) suggests, "Rather than talking about a situation and

solving problems during a meeting, you start out by visiting the area where the work is being done,


ARTICLE IN PRESS

talking with them and observing key processes, and from there, identifying improvements to

prioritize." By utilizing LSA on several of Toyota's internal documents, the results will be able to tell

whether Toyota prefers executives to spend time in the office or on the shop-floor.

Another issue is the executive's „management management‟, so to speak. That is, how does an

executive (or general manager) select, organize, and relate to his immediate managerial team? This

might seem like a fuzzy topic, but it is something that could probably use much more intentional

analysis and planning within the upper circles of business management strategizing. Flinchbaugh

(2004) suggests that current executives and general managers always be on the lookout for potential

leaders, saying, “Lean transformation is about leadership, not a position or rank. Look for people at

every level of the enterprise capable of this.” A specific debate that exemplifies this issue is whether

managers should be chosen/hired based on proven success, or based on talent and future capacity. It

is easy to say that both aspects are desirable, but just like with office/floor time, it is nearly impossible

to find a black-and-white balance. However, in analyzing Toyota's internal documents, it should

become evident whether Toyota attempts to rely on the capacity, development, and growth of

managers or requires instant results from already-proven personnel.

The last issue is not the most obvious, but it is perhaps the most important. It is a question that

involves motive, presentation, and mentality. Is Lean/TPS being presented to businesses by executives

as an add-on program, or is it a fundamental set of values that must be built into the company from

the ground up? In other words, is it a business initiative used as a band-aid to help cover up

problems, or is it an integrated set of values used to shape the minds of employees in order to

prevent problems from ever happening? Many executives try to simply tack on Lean ideas to their

company‟s processes without even acknowledging the culture from which the TPS was originally

extracted and delineated. Toyota‟s documents, though, should suggest whether Lean/TPS must come

directly out of a certain set of core values or can be added on to an existing business model. In fact,

Liker and Morgan (2006) speak to the significance of this, stating, “All of Toyota‟s executives

understand the importance of the overall system of management and deeper culture of the Toyota

way.” The fact that Toyota has stuck with these models of leadership over many years, with such great

success to boot, is proof enough that the most effective role for executives and general managers is

one denoted by a fair amount of time spent on the shop-floor, an interest in the capacity and growth

of future leaders, and a strong emphasis on the integrated mindset of Lean manufacturing.

S. HUGHES, P. MARKSBERRY/International Journal of Lean Thinking Volume 2, Issue 2 (December 2011)

2


ARTICLE IN PRESS

2. Literature Review

In determining the role of the executive within Lean, or even analyzing such an existing role

qualitatively, it behooves any researcher to have a categorical system and definitive methodology for

developing sound investigations and valid conclusions. First, a substantial literature review can

provide good background information, as well as popular and historical perspectives for reference.

2.1 Definition of Executive Leadership

An executive is the highest “ranking” individual in the hierarchy of company leadership. Although

some executives are involved in management (especially in smaller companies, where the executive is

both president and CEO), the inherent role of the executive is generally more abstract. Primarily, the

executive is to be the leader of the organization. What exactly, then, is the difference between a

manager and a leader? “A manager looks at the past to determine how to do things in the future,

while a leader creates a vision of what is possible and builds a new future” (Bodek, 2008). This

suggests that, fundamentally, the executive holds the vision of the company. They make

comprehensive decisions and are the face of the company to the rest of the world. They should first

and foremost develop vision and strategy, and subsequently make sure the managers and employees

orient what they do towards the purpose of the company.

2.2 Challenges and Problems with the Role of the Executive

Sometimes, perhaps even more often than not, executives have difficulties fulfilling their intended

role satisfactorily. One commonly reoccurring problem is that executives can get into micromanaging

their organizations without concerning themselves with setting the overall tone of the company. As a

consequence, the company‟s risk of losing overall vision and direction increases, narrowing the

potential for success in future growth, expansion, and adaptation. Concerning the problem of

micromanagement, Found and Harvey (2007) state, “A manager, by definition, has been given a

position of leadership, and the differences are then essentially in style and time as managers are often

preoccupied with day-to-day goal attainment, rather than long-term vision.” Later in the same article

they expound on the problem of leaders falling into this day-to-day management, rather than

entrusting this task to the management team. All this is to stress that there are certain and important

differences between a leader and a manager. Found and Harvey seem to agree with Bodek on these.

Both managers and leaders are necessary for success, but to what extent and dynamic? How can the


3


ARTICLE IN PRESS

executive stay focused on leading without getting too involved in managing? On the other end of the

spectrum is an executive culpability just as common and problematic. That is, sometimes an

organization faces difficulties when the executive becomes too concerned with abstract vision and

does not direct enough attention to day-to-day, operational elements. However, having strong vision

and leadership does not mean all of an executive‟s work must be abstract; he must still be aware of

the minutiae of the company without getting wrapped up in them.

2.3 Common Approach to the Role of the Executive

There are as many approaches to the role of the executive as there are executives. Every company

is unique, and every executive has a unique leadership style. Hence, in modern business practices, it

has become popular to have a very flexible, low-risk leadership outlook. As Chesbrough and Garman

(2009) suggest, “Darwin taught us that it‟s neither the strongest nor the most intelligent species that

survive; it‟s those that adapt best to changes in the environment. Inside-out open innovation will

enable your organization to become more agile and responsive…” Their article brings up interesting

points about executives maintaining the adaptability of their company for future growth and options.

The executive in this case is always on the lookout improvement/expansion opportunities. How does

this „agility‟ affect the way the executive interacts with managers and subordinates? “The agile

manager understands the effects of the mutual interactions among a project‟s various parts and steers

them in the direction of continuous learning and adaptation” (Augustine et al, 2005). Implied here is

the fact that an effective executive must know the inner workings of a project well enough to provide

this direction.

Another popular aspect of executive leadership is the heavy emphasis placed on human resources.

In a sense, this can be viewed as the executive sharing his role as visionary with managers and other

employees. Leaptrott and McDonald (2009) state, “Entrepreneurial executives actively seek

opportunities for their companies. Their efforts to identify these opportunities and commercially

exploit them can be greatly enhanced by subordinates that constructively collaborate with their

coworkers to actively seek information that leads to opportunity recognition and exploitation.” The

benefits of this are several. First, it can relieve the executive from independence or uncertainty in

setting the vision and direction of the company by making that process more of a corporate

responsibility. Also, especially with a diverse workforce, the executive can gain valuable input from

his subordinates that he wouldn‟t necessarily have had otherwise in making autonomous decisions.


4


ARTICLE IN PRESS

Finally, an emphasis on human resources can increase productivity and creativeness among

employees, since it becomes clear that they are valued for more than just repetitive labor. Concisely,

transformational leadership is in, and transactional leadership is out.

2.4 Common Approach to the Role of the Executive in Lean

As Bodek (2008) puts simply, “Lean needs leaders!” Moving into a Lean context, however, the role

of the executive appears to become more complicated. Hinterhuber (1994) asserts, “Management

must be responsible for specialist areas and for general leadership... General leadership means

motivating teams and individuals for strategies and business processes. It is not advisable to have too

many business processes running at the same time.” So, leaders are responsible for motivation of

teams and individuals within a business to adopt Lean principles and practices. Many times, this

comes down to a „weakest link‟ type of scenario, where only one or two specific parts of a process or

project are holding it back from a much greater level of production or efficiency (Bates, 2010b).

One of the more prominent ideas about executives in Lean is that they should spend a significant

amount of time on the shop-floor rather than tucked away in an office. This level of involvement is

often what sets the truly Lean businesses apart, as the executives actually take the time and initiative

to visit the most basic levels of their organizations in order to observe and improve. Psychologically,

however, this involvement also shows the employees how seriously the executive takes efficiency,

lending to much greater effects than most people would realize. Bodek (2008) agrees, noting,

“Traditional managers have been taught to work through layers of subordinate managers… But in a

Lean system, leaders are encouraged to „learn for themselves‟. This approach might be called

„management by walking around‟… It is a leader‟s job to get as many creative ideas as possible from

all workers.” Successful executives tend to stress that Lean is not program to be implemented; it is

rather a new way to think. As evidenced by this involvement on the shop-floor, it is not about getting

employees to follow steps, but instead getting them to be more creative, careful, and conscientious.

Another idea is that an executive must be able to identify problems in an organization before

attempting to implement Lean solutions. The consensus seems to be that Lean actualization must

begin with identification of clear problems (or as some call them, growth opportunities). In other

words, a Lean approach does not work when the executive does not believe it to be necessary (Bates,

2010b). To some, Lean can be broken down sequentially into goals, then principles, then tools.

Executives must at least vocalize the goals and exemplify the principles. Engineering managers, for


5


ARTICLE IN PRESS

example, then determine which "tools" best fit the job (Abdulmalek et al, 2006). In this model, the

executive must be the one to communicate goals to subordinates, setting a higher standard to be

reached. As Flinchbaugh (2004) writes, “Leadership is moving people toward the ideal state, and you

can‟t lead people to where they already are… If Lean is about transforming thinking, then in order to

lead Lean, you must be able to teach.” Here, again, and this time in a Lean context, the

transformational style of leadership surfaces as dominant.

Of course, it cannot be forgotten that each organization is different, and thus will have different

paths to getting Lean. Flinchbaugh continues, “Many people have tried to succeed at Lean by copying

the solutions of others, either through benchmarking or out of a book. This is like copying off

someone else‟s test only to find that you were taking different exams. Your company is unique and

will likely have some distinctive problems and constraints. Ingrain Lean thinking in your organization

so you can find your own answers.” Taking this in conjunction with previous ideas, it is evident that

Lean thinking cannot be ingrained in an organization, and thus cannot be fully effective, unless it

starts at the executive. Liker and Morgan (2006), in continuing point out the significance of the

culture behind the TPS, record, “As Vice Chairman Katsuhiro Nakagawa put it, „without the Toyota

way we are just like any other automobile company.‟” This article notably ties Lean to the “deeper

culture of the Toyota way”, insisting that authentic Lean (i.e. TPS) comes from this Japanese-based

culture, not from a Lean handbook. Logically, it seems possible that executives raised in the American

culture have limitations on how deeply they can integrate the Lean mindset within their

organizations. However, success in Lean cannot be limited to the executive. According to Roth

(2006), “Lean is not a program or an outcome, nor does it reside at an executive level or within the

workforce. Lean is a way of operating that spans from executive strategy setting for developing

people and managing business growth to the commitment of the workforce to continuous

improvement.” Again, it is put forward that Lean is not simply a program but the result of an entire

culture.

2.5 Common Problems with the Role of the Executive in Lean

Obviously, from an executive‟s standpoint, getting Lean is no easy task. Autenrieth and Pfeiffer

(1995) state, “The adaption of Lean management requires a holistic approach. Without an extensive

formulation of strategies the character of Lean management can neither be grasped nor

implemented. However, these formulations of strategies do not exist.” This is really where the rubber


6


ARTICLE IN PRESS

meets the road, as Lean does not have a go-to strategy guide for executives. According to Autenrieth

and Pfeiffer, “Surprisingly, many companies in the meantime have obviously come to realize the

necessity of an improved corporate culture and a changed leadership attitude within the scope of

Lean management measures, even though the companies, according to current status reports, still are

far from having reached the ideal.” It is certainly possible that some executives know what it takes to

be Lean, but as long as they are moderately profitable and can be seen attempting to make things

better using some new business model, they do not need to work any harder at improving in

efficiency. This type of behavior could arise from a failure to identify problems, leading to a lack in

desire to improve.

This brings up the problem of trust. Can employees trust an executive that is never on the shop-

floor? Conversely, can executive trust managers in a transactional, success-based leadership model? As

Clark (2006) interestingly discovered, “N.R. Narayana Murthy, the co-founder of Infosys, often

reminded people, „We have a famous saying at Infosys: „In God we trust. Everybody else, bring data

to the table.‟ If you use data to decide issues, you encourage meritocracy‟”. Perhaps, then, trust is

only to be based on data and results. However, in an interview with 3M CEO George Buckley, Hindo

(2007) found, “Perhaps one of the mistakes that we made as a company – it‟s one of the dangers of

Six Sigma – is that, when you value sameness more than you value creativity, I think you potentially

undermine the heart and soul of a company like 3M”. Clearly, true Lean values and amplifies the

creativity of employees; but when trust depends solely on success and results, creativity becomes

stifled.

The real problem at hand is that Lean has no inherent principles concerning the role of

executives, leaders, or managers, though some deductions can be made based on the other principles

that have come to define Lean. Found and Harvey (2007) articulate this problem clearly, stating, “The

Lean literature focuses mainly on tools and techniques, while the leadership literature, although

being increasingly concerned with team contexts, has done little specifically on Lean. This poses two

questions: 1) Does the style of leadership influence the successful and sustainable implementation of

Lean? 2) Does the role of leadership change during the initiation (decision making phase) and

implementation (decision implementing phase) of Lean?” These two questions adequately capture

the problems and questions concerning the role of the executive in Lean, and while many different

approaches have been attempted, there is still a dearth of proven leadership tactics for a Lean

context.


7


ARTICLE IN PRESS

2.6 Some Theories Concerning the Role of the Executive in Lean

There are many unproven ideas floating around about the role of the executive in Lean.

Autenrieth and Pfeiffer mention that “in smaller, middle-class companies, which are a characteristic

element of the German economy, the executive-level decision makers without any exception still

interpret Lean management as the compression of organization and the reduction of hierarchy."

Some companies that have even attempted to directly reproduce the TPS in their most fundamental

managerial functions. To others, Lean has become a watered-down way to save a little money.

According to Kleb and Svoboda (1994), “There are no organizational reforms such as the

introduction of inter-hierarchical and interdepartmental team and project work; thus, Lean

management is reduced to a „legitimization for cutting costs‟.” In such cases, all the executives want is

to cut costs; they could care less about creativity, integration, or overseeing kaizen.

Many culture-related theories have also spread. Seddon and Caulkin (2007) remark, “Where

[Taiichi] Ohno saw flow and heartbeat, the Americans saw speed and volume. They saw that the

faster they could „push‟ work through the lines and the greater numbers of cars they made, the more

cheaply and profitably they could do so: the greater the economies of scale.” Maybe this is simply the

American way, and to be Lean is to be something that is fundamentally not American. According to

Jack Welch, former CEO of GE, “The big myth is that Six Sigma is about quality control and statistics.

It is that – but it‟s a helluva lot more. Ultimately, it drives leadership to be better by providing tools

to think through tough times. At Six Sigma‟s core is an idea that can turn a company inside out,

focusing the organization outward on the customer” (Blakeslee & Smith, 2002). If this is true, it goes

against the grain of using Lean to improve efficiency and save money. Regardless, it could be that

American, individualistic society makes it impossible for Lean to legitimately turn a company inside-

out.

3. Research Approach

The overall approach in this analysis is to analyze Toyota‟s organizational documents by applying

statistical data mining. This work will use Latent Semantic Analysis (LSA) to study Toyota‟s industrial

engineering techniques, systems and managerial practices. LSA is a theory and method for extracting

and representing the contextual-usage and meaning of words and phrases by statistical computation


8


ARTICLE IN PRESS

applied to text (Landauer 2004). LSA is based on Singular Value Decomposition (SVD) which is a

mathematical matrix decomposition technique using factor analysis.

LSA has proven to be a successful method for capturing the underlying relationships between

documents by accurately simulating human learning as it relates to the theory of knowledge

representation (Wolfe et al 1998). The psychological theory that supports LSA is based on the fact

that people learn by associating perceptual objects and experiences, including words that are met

near each other in time (Landauer 1998). Interestingly, this similarity-based or object recognition

phenomena of LSA has been shown to predict learning by correctly mapping new relations by

statistical association (Landauer 1998). This learning phenomenon occurs by LSA grouping and

organizing mental frames of knowledge much like how the human brain organizes existing domain

knowledge. Once domain knowledge exists, knowledge transfer can occur by linking new concepts

to foundational knowledge. LSA provides the framework for representing the organization of

foundational knowledge in text. When LSA is used to study organizational documents it provides an

internal representation of how the organization is intended to originally operate. Thus, the ideal or

intended role prescription of organizational members can be identified and the factors acting upon

them.

4. Research Methodology

A document-term(s) matrix was created from numerous Toyota documents; such as the Toyota

Way, The Toyota Business Practices, the team member basic training manual, the team member

handbook, role of the supervisor, standardized work training manuals, process and system kaizen

manual and problem solving for managers. A representation of a document-term(s) matrix is shown

in Figure 1. A document-term(s) matrix was created by tabulating the number of term(s) that occur

throughout a document. Term(s) count can be identified using a variety of different software

programs. A natural characteristic of the document-term(s) matrix is their highly sparse nature which

is a high proportion of zeros. This is normal, because very few terms in the collection as a whole are

contained in any one document. Other distinguishing characteristics of the matrix are the document

vector and the word vector. The document vector is a weighted average of the vectors of words it

contains. A word vector is a weighted average of vectors of the documents in which it appears. The

document-term(s) matrix was assembled by selecting industrial engineering themes and trends


9


ARTICLE IN PRESS

according to previous literature. Table 1 illustrates the text corpus properties of the documents used

in the matrix and the themes selected in the study.

10 0 1 0 0 0 0

0 2 0 0 0 18 0

0 0 0 0 0 0 0

6 0 0 4 6 0 0

0 0 0 0 0 0 0

0 0 1 0 0 1 0

0 1 8 0 0 0 0

0 0 0 0 0 3 0

2

2

2

0

2

0

0

0

Doc

umen

t 1

Doc

umen

t 2

Doc

umen

t 3

Doc

umen

t 4

Doc

umen

t 5

Doc

umen

t 6

Doc

umen

t 7

Doc

umen

t 8

Term(s) 1

Term(s) 2

Term(s) 3

Term(s) 4

Term(s) 5

Term(s) 6

Term(s) 7

Term(s) 8

Document Vector

Word Vector

(Passage Vector)

Figure 1. Representation of Document-Term(s) Matrix

Table 1. Text Corpus Properties and Semantic Themes

Document Property Value

# Document Vectors 3

# Word Vectors 6

Total Document Pages 22

Total Number of Words 172

Avg. Revision Date on Documents 1992

Latent Semantic Themes Term(s)

1. Philosophy of TPS/Lean Program, problem solving, add-on

Mindset, fundamental, problem preventing

2. Management relationships Results, now, performance, transactional

Growth, future, trust, transformational

3. Executive involvement Office, getting reports, indirect

Floor, seeing for yourself, direct


10


ARTICLE IN PRESS

Next, the Singular Value Decomposition (SVD) algorithm is used to reduce the document-term(s)

matrix using equation 1.

TUSVA (1)

Where U is an m x r orthogonal matrix whose columns make up the left singular values vectors, S is

an r x r dimensional diagonal matrix whose diagonal elements are termed singular values named "k",

and V is an r x n orthogonal matrix whose columns for the right singular vectors of A. VT is the

transpose of V. Figure 2 gives a schematic representation of A, U, S and VT.

Sparse matrix

(mostly zeros)

n Documents

=

m Terms

dense

r

m

r

r

dense

n

r

Singular Values (k)

zeros

zeros

A = U S VT

High Order Ranks

(less dominant)

Low Order Ranks

(less dominant)

Optimal

Rank

Determined

by Singula

Values (k)

Figure 2. SVD Representation of the Document-Term(s) Matrix

Calculating USVT consists of finding the eigenvalues and eigenvectors of AAT and ATA. The

eigenvectors of ATA from the columns of V, the eigenvectors of AAT form the columns of U. Also, the

singular values in S are square roots of eigenvalues from AAT or ATA. The singular values are the

diagonal entries of the S matrix and are arranged in descending order. The singular values are always

real numbers. If the matrix A is a real matrix, then U and V are also real. The last step in LSA is to map

the semantic space using the unit vector of each rank of the reduced dimensional space VT.

5. Interpretation of Results in Latent Semantic Analysis

The overall goal in LSA is to map dominate semantic themes in a reduced dimensional space. The

reduced dimensional space represents all word and document vectors in the semantic space or text

corpus. Mapping techniques vary, and for a more complete description please see the work of Garcia

(Garcia, 2006). This work will map the strength (i.e. magnitude) of each word vector and its ranks to

illustrate the level of dominance throughout the document collection. Rank 1 (lower order) is the


11


ARTICLE IN PRESS

most dominant rank followed by rank 2 and so on. The singular value matrix indicates through a

scree plot (not shown) the optimal rank. Ranks beyond the “k” value are less dominant.

Plots shown in Figures 3-5 will all approach the maximum rank at a coordinate position 1,1.

Consequently, plots can also be analyzed simultaneously by comparing the distance from the origin

to the rank 1 data point. In this way, plots can be analyzed locally (analyzing the decaying nature of

each rank within a plot) and globally (by comparing the rank 1 position of each plot).

6. Results

The graphical LSA results from some of Toyota‟s internal documents related to the role of general

managers and executives are depicted in Figures 3 through 5. These figures display general trends in

how Toyota specifies desired aspects of conduct in management. Each figure portrays a different

abstract dichotomy to be expounded on (in the discussion section).

Figure 3. LSA Plot: Philosophy/Perspective of Lean/TPS


12


ARTICLE IN PRESS

Figure 4. LSA Plot: Managerial Relationship and Value

Figure 5. LSA Plot: Executive/GM Involvement Trends


13


ARTICLE IN PRESS

7. Discussion

Figure 3 gauges Toyota's attitude towards leadership in regards to how the TPS is presented to the

company as a whole. This dichotomy surfaced out of the differences in common perspectives among

multiple companies concerning the implementation of Lean ideas. The first primary perspective

packages TPS/Lean into an add-on program or efficiency initiative for businesses; this is represented

by the vertical axis in Figure 3. The other perspective believes TPS/Lean to be a fundamental set of

values and a totally integrated mindset among all company personnel; this is represented by the

horizontal axis in Figure 3.

Results show that Toyota nearly exclusively promotes the integrated perspective. Toyota does not

talk about the TPS as a prescriptive program that will improve their company. Rather, Toyota implies

Lean as a descriptive set of principles and procedures based on the core standards from which their

company has chosen to operate; much of which, in turn, has actually been endowed by Japanese

culture itself. To Toyota, 'Leanness' is not a goal, but a value out of which all employees are

encouraged to function. This also suggests that successful TPS/Lean operation does not begin from

an outside influence, but a transformation of the core values within the company. However, this does

not mean that to adopt TPS/Lean principles, an organization must change its primary goals or vision.

It simply indicates that, in metaphorical terms, weight loss is attained by fundamental changes in diet

and exercise, as opposed to medicinal remedies or surgical procedures.

A large part of this issue has to do with motivation. What motivates a company to change?

Financial and visional success, the usual candidates, might come to mind. However, success is not

binary. Success comes in differing quantities, and some companies are only motivated to be

moderately successful. That is, many businesses really only want to do enough to get by. As seen in

the literature review, some executives do not care enough to identify problems in their organizations

as long as they are enjoying mild success. However, as evidenced by Toyota‟s standards, some

businesses strive for excellence in every category. Some executives maintain the mentality that

everyone makes mistakes and perfection is impossible. Toyota, on the other hand, strives for

perfection by systematically eliminating waste from all of their processes.

Toyota relies on its executives and general managers to convey this attitude to the rest of the

company. The leaders at Toyota are expected to lead by example. They are expected to know their

situations comprehensively. They are instructed to invest in junior managers and other employees.


14


ARTICLE IN PRESS

More than anything, they are expected to operate out of a core set of values rather than follow a list

of rules that they do not fully understand.

Figure 4 shows Toyota‟s preference towards managerial relations. The vertical axis represents

Toyota‟s emphasis on management talent, experience, and fast results, while the horizontal axis

represents Toyota‟s emphasis on management capacity, trust, and future potential. Results show that

Toyota greatly favors the latter. These results are unsurprising, as they seem to tie in naturally with

the idea behind the previous figure. Executives and general managers of Toyota do not simply hire

experienced managers to give them instant results. Instead, in order to maintain the mindset of their

company values, they nurture and groom less experienced leaders and managers to follow in their

footsteps. In this way, a consistent and trusting relationship can be built as a leader develops and

gains more responsibility within the company.

In Lean/TPS, people are everything. Employees, managers, or executives can be anything from an

origin of great success to the most imminent source of failure or waste. Imperative thus in the

responsibilities of an executive is the task of building a mindset of teamwork and cooperation within

the company. This is where the transformational leadership theory reaps the benefits of one of its

fundamental concepts: training subordinates to take on future leadership. To the extent that an

executive or general manager can really pour into younger employees, the future of the company will

be that much more secure. Toyota obviously values this, esteeming managers not just for their

credentials but for their capacity to carry on and indeed continuously improve upon the execution of

the vision and purpose of the organization.

Figure 5 compares Toyota‟s emphases on time spent in the office versus time spent on the shop-

floor, as it were. The vertical axis measures the emphasis on time spent in the office (getting reports),

and the horizontal axis measures the emphasis on time spent on the shop-floor (seeing for yourself).

This graph is more interesting than the previous two in the sense that it shows a much more even

distribution of emphases than the others. Precisely, it shows that Toyota favors time spent on the

shop-floor, but only marginally. This is significant to realize, because it is a reminder of how an

executive should not fall into micromanaging (i.e. always on the shop-floor). Executives and general

managers in Toyota may be in favor of spending time on the floor, but they still have specific duties

that no one else in the company can do, and they must be „in the office‟ in order to accomplish some

of their more organizational and directional tasks.


15


ARTICLE IN PRESS

Although there might be no clear line to draw between the office time and floor time, one could

observe the two things that commonly keep an executive in one place for too long. For one, the

executive could get cooped up in the office on account of a surplus of paperwork and other duties of

the more managerial type. On the other hand, an executive may end up shying away from the shop-

floor out of laziness or other reasons. Likewise, an executive might get caught up in the intricacies

shop-floor, or simply stay away from the office out of contempt for office duties. In any case, it is up

to the executive to take initiative and decide how much time to spend where. Logically, time is best

spent where it is most needed, and that should be apparent to an observant executive.

8. Conclusion

Clearly, Toyota‟s slant on Lean is vastly different than most other external manifestations of it. To

Toyota, the TPS is very much an ingrained cultural mindset, while to most other companies; it is just

a catchy program that can be applied to cut costs. To executives outside of Toyota, this means that

true Lean implementation requires patient dedication, epistemological humility, and a

transformational approach. To become Lean, every process must indeed be examined and refined;

but even more fundamentally, every mind must be trained for situational awareness and instinctive

efficiency. As long as things could be improved, it is the role of the executive to take responsibility

and make sure they are indeed changing for the better. However, this change cannot be forced from

the outside, but must occur naturally; and only an executive has the influence to plant the seeds of

change deep enough. Sure, there are improvements to be made simply by employing some of the

tools and practices developed in the TPS, but without an executive leading by example and

motivating managers and employees to higher standards of performance and efficiency, any

enhancements that happen will not stand the test of time.

This research and analysis shows that the original form of the TPS is still the most effective,

although it takes perseverance to adopt into a predominantly American-cultured organization. The

reality that Lean has proved to be impossible to fully abstract from the TPS attests to the fact that Lean

is somewhat proprietary in nature, being, in a sense, owned by Toyota. As found in related literature,

Lean cannot be successfully implemented without executives and general managers leading the way.

Additionally, as shown by the analysis of some of Toyota‟s internal documents, there are specific

styles and patterns of leadership which Toyota prefers for the simple reason that they are particularly

effective and conducive to the cultivation of the culture out of which Lean thinking was born. That


16


ARTICLE IN PRESS

Toyota has generally preferred these styles and patterns of leadership to such great success over

multiple decades is evidence that the most effective role for executives and general managers is one

represented by significant time spent on the shop-floor, future-oriented managerial relationships, and

a strong focus on the integrated mindset of Lean manufacturing.

References

Abdulmalek, F., Rajgopal, J., & Needy, K.L. 2006, „A Classification Scheme for the Process Industry to

Guide the Implementation of Lean‟, Engineering Management Journal, vol. 18, no. 2, pp. 15-

25.

Augustine, S., Payne, B., Sencindiver, F., & Woodcock, S. 2005, „Agile Project Management: Steering

from the Edges‟, Communications of the ACM, vol. 48, no. 12, pp. 85-89.

Autenrieth, C., & Pfeiffer, P. 1995, „Lean Label for an (Un)structured Strategy in the Federal Republic

of Germany: A Japanese Management Approach and Its Compatibility to German Companies‟,

International Executive, vol. 37, no. 5, pp. 467-483.

Barnes, C. & Walker, R. 2010, „Improving Corporate Communications: Lean Six Sigma Science Has

Broad Reach‟, Journal of Business Strategy, vol. 31, no. 1, pp. 23-36.

Bates, B. 2010a, „Slimming Down: How Barry Arbuckle drives continuous improvement at

MemorialCare‟, Smart Business Orange County, July, pp. 11-15.

Bates, B. 2010b, „Lean Outlook: How Scott Morey eliminates inefficiencies to improve The Morey

Corp.‟, Smart Business Chicago, August, pp. 17-23.

Blakeslee, J. & Smith, D. 2002, Strategic Six Sigma: Best Practices from the Executive Suite, Wiley,

Hoboken, NJ.

Bodek, N. 2008, „Leadership is Critical to Lean‟, Manufacturing Engineering, vol. 140, no. 3, pp. 145-

154.

Chesbrough, H.W., & Garman, A.R. 2009, „How Open Innovation Can Help You Cope in Lean Times‟,

Harvard Business Review, December, pp. 68-76.

Clark, H. 2006, „Can You Outsource Innovation?‟, Forbes.com, 24 August, available at:

www.forbes.com/2006/08/23/leadership-innovation-outsourcing-cx_hc_0824infosys.html

Flinchbaugh, J. 2004. „Getting Lean “Right”:10 Points To Consider‟, Business Journal (Central New

York), vol. 18, no. 16, pg. 10.

Found, P. & Harvey, R. 2007, „Leading the Lean Enterprise‟, Engineering Management,


17

http://www.forbes.com/2006/08/23/leadership-innovation-outsourcing-cx_hc_0824infosys.html


ARTICLE IN PRESS

February/March, pp. 40-43.

Garcia, E. 2006, SVD and LSI Tutorial: „Latent Semantic Indexing (LSI) How-to Calculations‟, 21

October, available at: www.miislita.com

Hindo, B. 2007, „At 3M, A Struggle Between Efficiency And Creativity‟, vol. 8, Businessweek.com, 11

June, available at: www.businessweek.com/magazine/content/07_24/b4038406.htm

Hinterhuber, H. H. 1994, „The European Way to Lean Management‟, International Executive, vol. 36,

no. 3, pp. 275-290.

Kleb, R.-H., & Svoboda, M. 1994, „Trends und Erfahrungen im Lean Management (Teil II)‟, Zeitschrift

für Führung und Organisation, vol. 5, pp. 299-304.

Landauer, T. 2004, „From Paragraph to Graph: Latent Semantic Analysis for Information Visualization,

Colloquium of the National Academy of Sciences, 6 April, 101(1).

Landauer, T. 1998, „Learning and Representing Verbal Meaning: The Latent Semantic Analysis Theory,

American Psychology Society, October, 7(5).

Leaptrott, J., & McDonald, J. 2009, „Ways Managers Interpret and Act on Common Workplace Events:

Implications for the Entrepreneurial Executive‟, Entrepreneurial Executive, vol. 14, pp. 81-93.

Liker, J. K., & Morgan, J. M. 2006, „The Toyota Way in Services: The Case of Lean Product

Development‟, Academy of Management Perspectives, vol. 20, no. 2, pp. 5-20.

Mehri, D. 2006, „The Darker Side of Lean: An Insider's Perspective on the Realities of the Toyota

Production System‟. Academy of Management Perspectives, vol. 20, no. 2, pp. 21-42.

Roth, G. 2006, „Distributing Leadership Practices for Lean Transformation‟, Reflections, vol. 7, no. 2,

pp. 15-29.

Sayles, L. R. 1993, „Doing Things Right: A New Imperative for Middle Managers‟,

Organizational Dynamics, vol. 21, no. 4, pp. 5-14.

Seddon, J., & Caulkin, S. 2007, „Systems Thinking, Lean Production and Action Learning. Action

Learning: Research & Practice, vol. 4, no. 1, pp. 9-24.

Valdiserri, G., & Wilson, J. 2010, „The Study of Leadership in Small Business Organizations: Impact on

Profitability and Organizational Success‟, Entrepreneurial Executive, vol. 15, pp. 47-71.

Wolfe, M., Schreiner, M., Rehder, B., Laham, D., Foltz, P., Kintsch, W. & Landauer T. 1998, „Learning

from text: Matching readers and texts by Latent Semantic Analysis‟, Discourse Processes, vol.

25: pp. 309-336.


18

http://www.miislita.com/

http://www.businessweek.com/magazine/content/07_24/b4038406.htm

The Role of The Executive in Lean: A Qualitative Thesis...

Documents

Transcript of The Role of The Executive in Lean: A Qualitative Thesis...