Organisational fitnessThe rate at which Toyota’s organisation improves is a measure of its organisational fitness. In practice it sets both a ceiling and a floor on its ability to grow. It sets a ceiling in that Toyota’s leaders should not take on new initiatives if, in doing so, they put at risk their ability to meet existing commitments. It sets a floor in that if these leaders have the capacity and capability to hand, they have little trouble identifying and acting on exciting opportunities for long-term performance improvement and growth.
Continuous improvement and standardisation – It’s about managing changeKey to Toyota’s success is its approach to standards and standardisation. Standards for operating processes across the company are rigorously defined, followed and enforced, but can change often. Counter-intuitively, the key enabler of standardisation as a driver of high performance is the dynamism of Toyota’s approach to propagating and controlling change. It allows the firm to encourage and embrace innovation. The alternative scenario is one where the intransigence of a firm’s approach to change acts as a barrier to innovation. Here, its potential as an enabler of outperformance is lost. Rather than pushing and standardising to best practice, the firms resist innovation, demoralising thought-leaders and forcing standardisation to performance levels much closer to the average.
Driving continuous improvement – A design challengeImproving the rate at which an organisation improves is a design challenge. It starts with taking on the idea of increasing organisational fitness as an explicit objective, deciding what this means in the context of the firm’s vision and strategy, and then designing and implementing a structured and aligned programme of change. It is best set-up as an ongoing area of focus for the leadership team. What it delivers, though, is the ultimate form of proprietary competitive performance advantage. Truly this view is worth the climb. James Bowen and Brian MacNeice are co-founders and managing directors of Kotinos Partners, a niche advisory firm working to help CEOs and their teams achieve sustained high performance. Image: Shutterstock
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