Toyota Way or Highway!
One of the best books I would recommend to an HR professional is ‘Toyota Culture’ with the subtitle ‘The heart and soul of Toyota Way.’ The book is not just comprehensive and practical, but very mature in thought in what it prescribes. There are many ways of managing people well and creating the desired culture, this book tells us the Toyota way of doing it.
If that be so, why is it that Toyota is having frequent problems in its plants at Bidadi?
Let us search some answers in whatever is available in the press.
The Bidadi plant of Toyota Kirloskar began production in 1999. Since then it is a story of industrial strife. In 2005 Toyota workers’ union affiliated itself to CITU which was disapproved by the Management and the rift widened.
The issue involved in the present strike or lockout is said to be a wage dispute. Toyota has offered Rs 3050 while the workers want Rs 4000 increase. If this is the real issue, then it sounds funny that the parties are breaking negotiations for a mere Rs 950 gap which is seen as not a very wide gap. Obviously there is something more than meets the eye.
The newspaper report says. ‘Answering a question on conciliatory meetings on the wage hike issue, Viswanathan said “…We did have a final meeting where we believe where union agreed to a final wage, we only want them to come and sign….Matter stands as far as we are concerned at Rs 3,100.”’
Toyota has suspended or dismissed some workers and then introduced an ‘undertaking’ as a pre-condition of allowing workers entry to the plant. This is not acceptable to the workers. Toyota is running the plant at 50% capacity.
The view of some people is that Toyota is implementing its practices which will not work in Indian culture. Regimented way of working is not acceptable to Indian people, and Toyota seems to demand it. The charge of being ‘tone deaf’ is often levelled against Toyota. Toyota excels in creating certain practices and then implements rigorously. And there lies the catch. Implementation is influenced by several local factors.
We are presuming here that the issues are beyond wages, it is also about implementation of changes. There is some but not enough material to believe so, but since this issue is faced by all organisations, I am expressing my thoughts.
So on one hand we have an organisation which has created excellent and mature policies and outstanding practices, and on the other hand we see their failure. This is what the book [Toyota Culture] tells us:
“Managing Toyota Way and establishing a Toyota culture is not negotiable. The local management should establish a stance toward labour unions, taking into consideration local culture, laws, labour movements and so on. If the management of the company does have a union, both should recognise that the prosperity of the company is the common objective and both must use thorough communication in order to resolve any differences of opinions and build a healthy relationship of mutual trust. The relationship of mutual trust can ensure the long term prosperity of the company and thereby stabilise employee lives by maintaining and improving working conditions.”
The reports of previous strife suggest that the management was averse to union formation. It was also averse to union’s affiliation to CITU. [Incidentally, at this juncture a story is developing in Canada about unionisation in a Toyota plant]. Read carefully ‘the local management should establish a stance towards unions taking in to account the local culture, laws … .’ Do we see this happening in Toyota? Perhaps there is no issue now but it existed earlier.
More interesting is the statement that “Managing Toyota Way and establishing a Toyota culture is not negotiable.” There is nothing wrong about this statement too. The issue is how it gets implements.
Toyota policies are well defined and well thought out. Well defined policies which are not evolved at a given establishment require highest level of influencing for implementation – a skill in short supply. Toyota is well within its rights to say that the establishment will be managed in a particular way, and that there is no negotiability to that issue. But when it translates to ‘Toyota way or Highway’ because of lack of will or skill of influencing, it becomes counterproductive.
Expectations are running rather high from Toyota managers. Toyota has once again moved against current by saying men are better than robots. Here is a video which says so. It is also time to humanise the auto factories.
It is common knowledge that a system governing labour-management relations in Japan may or may not work in another country unless it is marketed well by the HR professional concerned. This is the challenge to such professional in Toyota factory at Bidadi. If the said professional, after proper study, feels firmly that the system which the Toyota management wants to implement will not be suitable in the conditions of that country then he must be able to convince the management by giving cogent reasons failing which the labour trouble is inevitable.
Mr VS Ram says [Comment posted with his permission]:
Thought provoking article.
In East and South East Asia, perhaps due to Confucian influence, personal advantage is readily forgone in favour of common good. This is not so in our country where we see many examples, in ordinary life, of individuals seeking a personal gain at the expense of society (eg. breaking a queue, knowingly violating traffic rules to reach one's destination faster etc). Thus while in other cultures we see people building societies by adding to the 'common good', in our culture the general thought in people's minds is what one can take home from the common pool.
In such a situation the idea that both (labour and management) should recognise that the prosperity of the company is the common objective is a tough one to actualise for the workers as well as the local management. Even where workers accept such an idea at a philosophical level (after all who can deny that the prosperity of the company is important), it does not detract from seeking more for oneself. So it may be better for managements to start with the notion that everything will have to be negotiated and even unilaterally established positions will, in time, be challenged and need to be defended at the negotiating table.
Another difference between Japan and India is the vast gap in living standards of persons in management and those on the labour side that prevails in India. This inequality makes such a collaboration much more difficult. A worker is bound to see it as a farce when a manager whose pay and perks are twenty times that of his own asks him to set side what the worker sees as his legitimate right, in the interest of company prosperity. I have sometimes seen expat managers in India struggle to come to terms with our unequal world and find ways to strike a common cause with the workers. Workers taken to headquarter country factories for a first hand insight into the company's philosophy (like the Toyota Way) will come back with not only insights into such philosophy but also stories of how much more egalitarian the company is on its home turf. How can we blame them if some come back with the notion that the company is selectively seeking to force some policies on a global level but taking advantage of exploitative local realities in matters of workers' pay?
Lastly, establishing a collaborative and participative culture founded on a higher goal requires tremendous commitment and effort from operating managers at all levels (not just senior management or the HR department). With high turnover of employees in supervisory and executive positions in India the worker becomes the only continuing element in a factory and it becomes tough to preach commitment to the workforce through a floating population of operating staff.