Monday, November 24, 2008


Quote. What Toyota knows that GM doesnt?

Do you know how many hourly jobs GM has laid off from 2006 to July 2008? Take a guess. How about 34,000? And now, they're talking about another 5,500 layoffs. And now they're asking you and your government for a bailout to end their troubled, outdated, low quality, wasteful production system. But, let's not focus on fixing GM's problems with an infusion of cash. There's something even deeper going on here that's really wrong.

OK, here's a better question. How many hourly jobs has Toyota 's American production system laid off in the same time frame? Zero. That's right. ZERO. How? Isn't Toyota experiencing the same slow down in auto sales as GM is? Yes, it is. And yes, Toyota has halted production at its Texas and Indiana plants for the past 3 months. But the 4,500 people who work at those plants have not been laid off. What!?!?! How? Why?
The answer: Toyota has a special culture, deep-rooted values, and respect for their workforce. Toyota 's tradition is to NOT lay off employees during hard times. This tradition hasn't really been put to the test until now. And Toyota has stuck to its guns and its values.

"This was the first chance we've really had to live out our values," says Latondra Newton, general manager of Toyota 's Team Member Development Center in Erlanger , Ky. "We're not just keeping people on the payroll because we're nice. At the end of all this, our hope is that we'll end up with a more skilled North American workforce."

Interesting. But what does that last line mean? "At the end of all this, our hope is that we'll end up with a more skilled North American workforce." It means that while these employees were not manufacturing automobiles, they were in training. They were doing safety drills, participating in productivity improvement exercises, attending presentations on material handling and workplace hazards, taking diversity and ethics classes, attending maintenance education and taking a stream of online tests to measure and record their skill improvements. Toyota is shifted the Texas and Indiana workers temporarily to Toyota plants whose assembly lines were moving at full speed, such as the Camry assembly plant in Georgetown, Ky. In addition to all of this, the workers also spent some time painting the plants and even helped build Habitat for Humanity homes. And they were getting paid.

Wow! So what is this costing Toyota ? The estimate is at least $50 million dollars, plus the loss of revenue of shutting down production. Why is this value and tradition worth so much to Toyota ? Why would they be willing to spend $50 million rather than lay people off? It's because Toyota believes that its people, yes, its PEOPLE are its greatest investment and its greatest asset. You hear so many companies say that, but would they really put their money where their mouths are when the rubber hits the road (no pun intended)? In Toyota 's case, the answer is yes they would.

So what does Toyota get out of this? When, not if, the plants return to full production, Toyota will have well trained employees on the front line, ready and able to meet the demand for their vehicles. And not only will they be well trained, they'll be happy and motivated to work. Because Toyota is willing to go to the mat for their people, their people will be willing to do the same for Toyota .

The lesson here: Unlike their counterparts GM and Ford, Toyota has always taken a long-term strategic view about their employees. Toyota understands that laying off thousands of employees for slowdowns or plant retooling is counter productive. They wisely utilize the time to redistribute their workforce to understaffed plants, provide additional training for the new products, and leverage their workforce to speed the transition for newer products. Their philosophy has avoided labor disputes and staffing shortages. It has kept the company as a leader in quality and profitability over its shortsighted competitors.
So, the message for you in all of this: Really commit to upholding the value that your people, let me repeat that, your PEOPLE are your greatest asset. Treat them with respect and dignity. Do everything in your power and your imagination to keep them on the payroll during the rough times. If you don't, you may not find those people again on the upside of the downturn. And if you do, you'll have hyper-productive, motivated teams delivering quality because they're committed on a deeper level to your company. Unquote.
Received by e-mail. Source unknown. However, the lessons are very real for today's economic meltdown scenario.......Love the message. No doubt Toyota is a market leader - their cars are the 'best value for money', and reliable too. (I can personally vouch for them. I drove a Toyota Sienna van for 4 years; put in only the recommended oil and gas, and never had to do any other repair/ service. Clocked over 90000 kms in 4 years without any problems. The Toyota off road guarantee in North America never needed to be tested). With this kind of a company philosophy, I have no doubts that these employees would build cars that are as reliable as their company - hats off to Toyota. Leadership cannot exist without followership. What good is a leader if the only way out of a slow down is to fire the followers?? Do you know of any other leaders in industry who standby their employees during really tough times??
Post Script: I recently heard an interview on TV wherein Mr Nandan Nilekani, Co-Chairman of Infosys was asked a question if he was going to lay-off people because of the slowdown. He responded that Infosys had invested in human capital and there was no question of laying off anyone. I have always admired Infosys and its work ethics. Nandan Nilekani's response was quite inline with the best of leadership practices. (28Nov08)

Wednesday, November 12, 2008


I believe that every individual wants to be a part of a winning team. Winning teams don't just happen. They are built over time on the solid foundation of certain values that form the basis of the functioning of that organisation. These values are thus called 'core values'. Every organisation needs to establish a set of core values. These values are the foundation on which the day to day business of this organisation would then be conducted.

Leadership plays an important role in modeling the core values, and leaders at every level are directly responsible in instilling these values in every member of the organisation, starting with the management team. Once these values are imbibed by each and every employee of the organisation, then there is a noticeable change in the behaviour pattern of the organisation. I believe modeling, defining and instilling the core values is a very important leadership function, of course, with willing acceptance from the majority of the employees. The willing acceptance is the easier part if the values reflect the desire of leadership to bring about common good.

Looking back..... this is what i had defined as our core values in the squadron on my first meeting with all my squadron officers.

Be a good human being: Being a good human being implied that one respected all of God's creation in general and human beings in particular without consideration of caste, creed, colour, religion or any other form of human prejudice.

Be a good Indian: You are a good Indian if you respect the greatest symbols of our nation - the Constitution and the national flag, and are willing to live up to the rights and responsibilities as laid down in the Constitution and also if you can ensure that you donot trample on the rights of other Indian citizens.

Be a good Officer (Leader/Manager): This implied that as an officer you always looked after the interests of those placed below you first, always and every time.

Be a good Professional: Being a good professional is very important to do your job to its best. However, the defence forces is a vocation where-in one may be called in to lay down one's life too. You may be the best professional around but if you are not good in the order listed above you may not be able to deliver what is required by the nation and that is the reason this was the last requirement in my scheme of things.

I have seen the core values of a number of business organisations now and find that these are defined in terms of attributes like integrity, team work, excellence, respect, learning, teaching, etc. etc. I am not sure if the core values can be the same in the defence forces and in business organisations. What do you think??

Thursday, November 6, 2008


Barack Obama will be the 44th U.S. President - a historic moment in the evolution of the American democracy. This event, i believe, is as big as previous events like the Boston tea party, the American civil war, the franchisement of women in the U.S. and the right to vote for the blacks in the US. 2008 will be remembered for generations to come as the year in which history was made in the US. Why is it such a big issue?

To me, Obama's victory signifies the triumph of democracy - a triumph of 'for the people, by the people and of the people'. This has a huge import for all democracies around the world, as also for all the people who are not living in democracies. It gives hope to people around the world - people whether they belong to majority or minority communities based on religion, race, colour or any other form of human prejudice.

I wanted Obama to win in my heart of hearts but did not see this happening, but the American people have risen to the occasion and proven me wrong. I am happy to be proven wrong on this one occasion. My faith in the American dream - a dream that Martin Luther King had seen, and articulated, way back in the 60s has been re-energised.

I consider America to be the country of my second birth - my stint of about one year in the US in 1989-90 had put me through a lot of introspection and education about the functioning of a democracy. I cherish the lessons that I had learnt in the US, both formally and informally. However, the last decade had put doubts in my mind about what was meant by democracy - was it a shallow ideal where you believed in the concept only for people who swore allegiance to the US flag or was it a concept that would better the way of life for humanity per se, irrespective of their country of allegiance. That doubt has been put to rest in my mind now.

Barack Obama has proven to be a very charismatic and inspiring leader who will hopefully bring about 'change' and 'hope' for the people in the US, and around the world. Now that the easier part is over, he will have to translate his vision, and that of Martin Luther King Jr., into pragamatic steps towards the betterment of people in general. Will he be able to deliver what he promised - Change, fast enough and hope, for eternity??