Base your management decisions on a long-term philosophy, even at the expense of the short term financial goals.
Basically this is a lesson not in profits, but in behavior. It is the “do the right thing” lesson, but in Toyota language, that translates into actual actions, not just words. One of the lessons my first manager taught me right out of college (and it stuck) was that there is right and wrong, and perhaps a little less gray than most of us would like to believe. Doing the right thing for employees, customers and even society as a whole will win you business in the future.
The author of “The Toyota Way” states that in the ever increasing expansion of capitalism and consumerism, we have the overly optimistic hope that if we do what is best for ourselves in the short term, that supply and demand will create innovation in the long tern. However, he presents concrete examples how Toyota outperformed competitors by doing the right thing even when profits were at stake, and even taking losses at times. ((Liker, Jeffrey. 2004. “The Toyota Way.” McGraw-Hill, Madison, WI. Pages 71-84.))
There are many organizations and stock funds that track performance by organizational commitment to social standards whether it be environmental, human rights, charitable giving or other measures. It has never surprised me that these funds always seem to outperform the market.
5 responses to “The Toyota Way: Principle 1”
The SystematicHR blog posts a series of articles about Toyota management principles based on the book “The Toyota Way” by Jeffrey Liker. All are well worth reading.The Toyota Way: Principle 1- Base your management decisions on a long-term philosophy, even at the expense of the short term financial goals. The Toyota Way: Principle 2 – Create continuous process flow to bring problems to the surface.
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[…] AND improving the way work is done. Both things lead to results, both short-term and long-term (Toyota promotes long-term thinking as a primary principle). The ROI of the training and education that is taking place is harder to measure and […]