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"Our people are our most important asset"…Really?

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In the spring of 1984, I was helping Toyota develop a training program to support the first full-scale implementation of its production system outside of Toyota City. As the only American member of the company’s Education & Training Department, one of my challenges was to help create training materials in English to explain myriad aspects -- technical and social -- of Toyota’s system. One aspect of the company that demanded thorough explanation was its human resource management philosophy and system. Based on what I knew of Toyota HRM at the time, I offered up what is now a familiar line to explain it: “Our people are our most important asset”. It was one sentence -- a kind of a slogan -- of a small pamphlet and it sounded good to me.

So I was surprised when the general manager of our department called me over to challenge it. My first presumption was that he just didn’t understand the English words. But, as I explained -- perfectly satisfactorily I thought -- he kept pushing back. For awhile, I persisted, still assuming that he just didn’t understand the English in a bit of an impasse.

As he continued to question me, uncovering some of the hidden assumptions buried in my slogan, I slowly began to grasp what he was trying to get me to see. “Who is the ‘we’ in ‘our people’? Who is the ‘us’ in ‘our asset’?” he asked. “Why, the company, of course,” I responded with some frustration at the fact that he couldn’t see the obvious goodness in the sentence I had written. Yet, gradually, it began to dawn on me that the cause of our impasse might be less a matter of his failure to understand English and more the fault of my immature understanding of the philosophy. He was getting at something deeper than I had first recognized. And that was the real reason I was having such a difficult time communicating in simple English the profound concept he was coaching me to share.

“Does it make any sense to say, “Our people are our most important resource” when we are the people and the company is us?” he pressed. Upon reflection, I realized the deeper truth in what he was getting at. He was right -- it doesn’t make sense to say that people are our most important asset. This well-intentioned phrase was in fact carrying a buried and profoundly disrespectful message, implying conventional capital asset thinking, treating the people in the organization as an asset to be computed along with any other number in a ROI calculation. It missed the point. Badly.

I realize now that his concern wasn’t that I get the phrasing exactly right. He was challenging me on a basic level so that I could understand that people aren’t just an asset (leading me to chafe at the currently popular term, “human capital”) -- we are the people and the people are the company.

I still don’t know how to state in a succinct and precisely nuanced way the profound concept that he so desperately wanted me to understand. Looking back now with chagrin at this exchange that occurred 25 years ago, I am humbled to tell you that the end to this saga was that I decided to dig in my heels, declare, “This is the way we would communicate that philosophy in English,” and with that I “won” the argument. The materials went out with my wrongly nuanced explanation. To this day, I sometimes see Toyota materials with that statement on it.

I met that general manager at a reunion dinner just a couple of years ago. He didn’t even remember the discussion but I apologized anyway.

See you next week.

John Shook
Senior Advisor
Lean Enterprise Institute

4 Comments | Post a Comment
Anonymous November 7, 2008
I was once a "Human Resources Manager," and I can tell you that the term "resource" also can have negative connotations. I saw people "used" as "resources" in the same way our civilization uses "resources," such as oil, coal, wood, etc. I think the more appropriate phrase might have been, "Our people are our greatest strength."

Durin my years in human resources, people were seen more as "resources" than as "human."

The question is this... Is an organization's philosophy more geared to treating people as humans or as resources? I'd prefer to work for one whose former is the priority.
Anonymous November 11, 2008
John, I'm really challenged by this stuff. I'm very new to all the lean stuff and trying hard to understand the thinking, not just the tools! But to be honest, it's so much easier to just use tools.

I'm in healthcare and project thinking is so rife that I'm stuggling to stay away from project methods, and stike with developing a culture of learning and problem solving (if that's what I'm meant to be doing?). so any tips not on starting, but on keeping to the thinking, not just the tools, would be greatly appreciated.

Paul, New Zealand
Anonymous November 28, 2008
Hi Paul in NZ.

Lean can be applied to service organisations. However, the tools and techniques are probably less useful. It is better to apply the principles.

Service provision is different because the customer is part of the process. Indeed you could say that the customer designs the process because they provide the specification.

The implication of this is that service providers cannot standardise the way that manufacturers do. Each customer is different and has different expectations. The cornerstone of lean service is flexibility.

This is where most service organisations fail. Managers feel compelled to standardise because this is all they know -command and control. Ironically Call Centres are exactly what not to do to provide good customer service and highlights the deficiency in understanding.

Hospitals are an interesting case too. Although not involved in healthcase, any of the case materials I have looked at suggests to me command and control managers using lean tools and techniques. This is similar to US companies in the 80s going to Japan to 'discover the secret'. They came back with tools and techniques which provided minor improvements only.

Healthcase provision is hugely fragmented, and back to my earlier point, patients are highly variable. Standardising is not the best approach.

Because of the complexity of healthcare structures, you will not be able to implement lean to any large degree. A structured approach is OK and does not run counter to LEAN. Lean requires structure and discipline.

My advice is not to get too hung up on any one approach and try what works. Use whatever tools work. The most useful tools I would suggest to guide you are: the constant identification of waste and the patient journey end-to-end. These two alone will keep you focused and on the right track. Don't get hung up on anything else.

You are on a journey and as long as you are generally heading in the right direction (even is your vehicle is slow and wonky), you are making progress.

Niall Dublin IRL
Anonymous December 5, 2008
Don't be so quick to dismiss hopitals as a beneficiary of Lean principles and concepts. This is a fine read about Virginia Mason Hospital (Seattle) and others in the Health Care industry that have cultivated a Lean culture, implemented standard procedures and layouts, and reduced a tremendous amount of wastse.

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