Monday, July 18, 2011

Semco vs Toyota

I've just been rereading all about the Toyota Production System to contrast it with Semco SA when I was struck by the fascinating realization that in many important ways, they are total ideological opposites.


Yes, both focus on the long term, on teams, on developing people, on mutual responsibility between workers and managers, and empowering workers so they have some means of directing their work. But concerning what it is these systems control and what they let workers decide, they are total opposites.


In Semco, the ONLY thing that matters is your output. Everything else is up to yourself and your team. In TPS, the only thing that matters is your INPUT, your effort and the ingenuity you put into the system in order to freely but continuously improve output.

In TPS, your workflow is very bureaucratically watched, though you are free to change it however you wish so long as it objectively 'reduces waste' (and you leave it in a state that those following you can learn from). But while output is meant to always improve (in quality or cost) this is NEVER predictable nor are there ever any specific expectations about it.

Both Semco and TPS micromanage ONE thing and systematically leave the other as a free variable. But what they choose to micromanage (micro-negotiate really) and what they choose to leave free are opposites.

Finally, TPS works in a constant state of crisis whereas Semco works in a constant state of relaxation. And Semco feels like totalitarian anarcho-communism whereas TPS feels like benevolent cooperative fascism.


What I really want to know is what I can learn about political systems design from this. It seems like there's a very important lesson here. My hypothesis so far is that you need to micro-manage either the input or the output and stay the fuck away from the other so the people involved don't feel like you're turning them into robots.

But does that mean you must micro-manage one side or the other in order to eliminate corruption? And is there another way of splitting freedom vs authoritarianism other than input vs output? I suspect no. More likely, have I gone off the rails somewhere?

Ah yes I have. Already I see that micro-manage isn't the right word. The right-word is micro-negotiate.

Are the political lessons learned from politico-industrial systems even applicable to other kinds of political systems? I would like to think so since politico-industrial systems are particularly harsh and unforgiving. But the industrial aspect introduces an external reality which most political systems lack. At least, political systems other than China since China's obsession with industrializing means that it is, essentially, just an industrial company.

I still don't fully understand why one variable has to be left totally free. But it probably has to do with keeping a psychological comfort zone for workers to retreat to. No, not quite. In Semco it provides such a comfort zone from the external requirements of output. In Toyota there is simply no external requirement and no comfort zone from it - everything is input, intrinsic, internalized. And that's all negotiated in what I see now as a creepy way since you're negotiating your ego.


sebastian said...

Well Ricardo mentioned two interesting things:
1. in germany they tried to formalize his system and they made that 600 pages manual. Don't know if it worked for them but sounds complicated.
2. I'm not sure if it was Toyota but some japanese also tried but they somehow failed (he blames cultural gaps for that).

That's why, in Democratization of action, I mention that the key is in local people finding ways. Each culture is a system with its own story, virtues to use and flaws to mitigate.

Richard Kulisz said...

The part about Germany is hilarious. It just makes perfect sense.

On the second part, he's undoubtedly correct to blame the culture. The Japanese are VERY different. A lot of what would be individual in other cultures will be collective to japanese. Some of that is good because it means leaders are always figureheads and spokespersons rather than autocrats. When they become autocrats, they don't stay in the center (not the top) for long. But most of that collectivism is bad. Interestingly, Toyota prizes creativity since out of the box thinking (beyond common sense, beyond rules) is one of their principles. So maybe it doesn't have to be that bad. Except for an-syns who are too rare to form Japanese collectives.

Actually, lots of companies from lots of places tried to imitate the Toyota way and they failed too. I think even many Japanese companies failed. It is certainly not universal and the Japanese government DID try to make it so.

The Japanese are a very, very process-oriented people. They arrived at writing very late, a mere thousand years ago or so, and the essence of Zen which they prize as very Japanese is "no consciousness". Zen is the creepiest, most disturbing thing I have ever heard of. People walking about and going through their entire lives as automatons without deviation, without minds to get in the way. Ritual is overlearning till it interferes with consciousness. And a lot of Japanese pride is tied up with Zen, in having no minds.

Ricardo Semler on the other hand is the complete opposite. He is very self-conscious. He knows what he is doing, what he wants to do, the difference between the two. It's just an impression I get from his earlier stories, like when he just called up that conservative old-money property management firm in New York. He wasn't humiliated, he *may* have been embarrassed but he firmly shoved that aside in order to achieve what he consciously decided to do. But it's especially visible in the story where he had an anxiety attack and he DID NOT want to live that way. And when he fired all his father's old managers as obstacles rather than going along with them. He isn't a narcissist, he's a visionary and firmly put his vision ahead of the "experts".

Kate said...

I first read Semler's 7 Day Weekend on holiday 2 years ago and have been trying to implement his ideas ever since... without much success! We're actually giving away some free copies of the 7 Day Weekend (our editor's favorite book) to new registrants on (a free global business school networking site)- please sign-up if you're interested!