Project Management & The Toyota Way – Part 1 : A Long Term Philosophy

Posted on February 16, 2010

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Toyota is as much a state of mind as it is  a car company. Although the competitivity and longivity of Toyota can be explained by the full exploitation of the Total Production System (TPS), the true foundations reside in its culture and the application of 14 management principles.

This serie of posts discuss the opportunity to leverage these principles within a project management practice, should it be internal or external to an Enterprise.

Suggested by Jeffrey K. Liker, these 14 principles can be integrated in four broader categories: Philosophy, Process, People/Partners, and Problem Solving.

SECTION I: LONG TERM PHILOSOPHY

Principle 1. Base your management decisions on a long term philosophy, even at the expense of short-term financial goals.

  • 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 responsability for your conduct and maintain and improve the skills that enable you to produce added value.

This first principle is with no doubt the cornerstone of Toyota approach. The purpose itself of any organization or workgroup defines the value it can achieve. For a PM practice, defining its purpose is often overlooked by senior manager and we often see mission  such as: “Developping best practices in project management throughout the entire organization”. To illustrate the subtle challenge of creating such statement, I suggest to look at how Ford compares to Toyota North America.

Ford Motor Company Mission:

  1. Ford is worldwide leader in automotive and automotive related products and services as as in newer industries such as aerospace, communication and financial services.
  2. Our mission is to improve continually our products and services to meet our customer needs, allowing us to provide a reasonable return to our stockholders, the owners of our business.

Toyota Motor Manufacturing North America Mission:

  1. As an American Company, contribute to the economic growth of the community and the United States.
  2. As an independant company, contributes to the stability and well being of team members.
  3. As a Toyota group company, contribute to the overall growth of Toyota by adding value to our customers.

This lastest message is very powerful as the company must improve growth of society to contribute to its external or internal stakeholders, making excellent products a conscequence of this statement.

We have all witnessed as active participant to Enterprise Projects the following characteristics:

  • Projects are painful for an organization, workgroup or people as it involves important changes,
  • These changes generate stress and for a while a lost of productivity,
  • Poor control of success is enforced post implementation,
  • True understanding of the customer value generated by such project is overlooked.

If we attempt to apply Toyota Philosophy to the Mission Statement of a PM practice it could look like this:

  1. Contributes to the continual growth of our customers by trully understanding the impact of Enterprise Projects in term of risk and value,
  2. Make Enterprise Projects the unique experience to develop people and the organization as a whole.

You must admit that this latest statement creates a new sense of pupose and offer new perspective for the members of this organization to deliver new value for the company and its customers that supersede the short term results of a project. To deliver continual growth and develop the organization as a whole, the PM practice will:

  • make excellence in PM,
  • care about the future of employees,
  • Insure future value of its investments,

necessary acts and behaviors to achieve its mission.

Now if we look at the critical competencies & structures that such PM practice need to develop, we could identify the following:

  • Integration of other functional department in the practice, such as HR, Finance
  • Continuous field experience
  • Honnesty and transparency of acts
  • Participation to external communities, should it be PM focus or customer focus.

As you can see the definition itself of the PM practice is changing tremendously as we are now looking at a long term perspective.

Please share your thoughts on this, and suggest your mission statement.

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