Respect for people

For years I have been visiting companies that have “respect for people” as a core element of their corporate philosophies. So at many of these companies I would ask the managers, “How do you show that respect?” Usually, they answered that employees should be treated fairly, that they should be given clear goals, trusting that they would be able to achieve them in the best possible way, and that they should be accountable for the results. For example, “We hire smart people, we give them a lot of latitude in how they should work because we believe in them, and we track the established performance indicators. That is showing respect.”

Recently, when Toyota made “respect for people” one of the pillars of “The Toyota Way,” I decided it was time to ask Toyota's best managers how they went about showing respect for people. The answer I got was somewhat different from what I had heard at other companies.

The managers start by asking employees what problems they are having in carrying out their current tasks. Then they question the employees' answer and enter into a discussion about what the real problem is (the real problem is rarely explicit).

Next, they seek to find out what is causing the problem and start another discussion about the root cause (a real discussion requires employees to gather evidence at the gemba – the place where value is added – for a shared evaluation).

Then they ask what can be done to solve the problem and ask the employees why they chose one solution over another (usually a range of solutions needs to be considered and more evidence must be sought).

Further, they ask how they – managers and employees – will know when the problem has been solved, and once again they engage in conversation to determine the best indicator.

Finally, after consensus has been reached on the most appropriate indicator of success, the employees get ready to implement the solution.

To many of us this does not look much like respect for people. After all, the manager does not come in and say “I trust you will solve the problem because I respect you. Do it however you think best and reach the goal.” Nor is the manager someone who is there to give moral support by saying “Good job!” Instead, the manager must challenge employees at every stage of the work, always asking for more ideas, more facts and more discussion when the employees simply want to implement the chosen solution.

Over time I came to understand that using this process to solve problems is really the noblest way of showing respect. The manager is telling employees that management cannot solve the problem alone, since management is not close enough to the problem to know the real facts. He or she truly respects the employees' knowledge and their dedication in the search for the best solution. However, employees cannot solve the problem alone either, because they are often too close to the problem to see the context in which it sits. In addition, they may feel cornered, restricting their questioning to the work they themselves do. Only through a demonstration of mutual respect – each for the role played by the other – is it possible to solve problems, making work more satisfying and taking organizational performance to a higher level.

I recently visited two distribution centers in the same city, which provided the same type of service to their customers. As I walked through them, I discovered clear examples of the difference created by mutual respect for people.

At the first facility, management was focused on controlling the workforce through individual metrics. Employees were told that they had to reach a certain workload, but they were also given considerable freedom in how to do the work. They were evaluated at the end of the day, week, month and quarter on whether they had achieved the desired results, using data collected by a computerized tracking system. Frontline managers were always busy dealing with the problems occurring around them, but none was systematically engaged in actually solving these problems in depth, down to the root cause, with the collaboration of the employees. That was a task for senior management and the staff of specialists as time permitted, usually without the involvement of the production people.

At the second facility, management worked with the employees to create standardized work for all tasks and introduced visual control through a tracking board, so that everyone could see how the others were progressing with their work. Because the entire process was visible to everyone, employees could help one another if a problem arose. And since the work process was very stable owing to its strong adherence to standardized work, line managers could devote most of their energy to problem solving, engaging the production people in discussions to find the root causes of problems and sustainable solutions to implement. In fact, everyone spent four hours every week on improvement implementation activities.

What is the result? Both facilities are in the same city, have employees with the same level of education and pay approximately the same wages. However, employee turnover at the first facility is seventy percent (which seems to be common in distribution centers), and there is also significant turnover in management. Meanwhile, at the second facility, turnover is about one percent and practically no manager leaves. And when I ask the managers and employees at the second center why this is so, the answer they give me is simple: “The work here is always challenging because we are always solving problems using a method we all know. Besides, we all respect one another's contributions.”

The differences don't stop there: by a rough estimate, the second center is twice as productive as the first, even with less automation. This is partly because the first is constantly hiring and training new workers, while the second distribution center spends practically no time on these tasks. In addition, all the employees at the second facility are experienced and work at the top of their learning curves. All the confusion about which task to do next and the large amount of rework have been eliminated.

Finally, at the second center, service quality as rated by customers is very high, even with a low rework rate. And the total amount of inventory on hand to guarantee the next-day service that both facilities promise their customers is also much lower at the second distribution center.

I think you can guess which is a Toyota parts distribution center and which belongs to a (like most) push distribution company from the mass production era, with management methods based on command and control and little discussion of how employees can do their work in the best possible way.

I also believe that we all want to show respect for people. The challenge for all of us in the Lean Community is to embrace and explain the true nature of mutual respect for people – managers and employees – so that all organizations can move forward to a new and better method of solving their problems.

* Chairman and founder of the Lean Enterprise Institute

Portuguese translation by Odier Araujo.