Author Archive

Tom Johnson: Financial results such as revenue, cost, and profit are by-products of well-run human-focused processes By Thomas Johnson, co-author of Profit Beyond Measure - Last updated: Thursday, February 18, 2010

Dear “Lean Edge” Colleagues: The cause of Toyota’s current crisis is found, in my opinion, in its very recent surrender to Wall Street pressure to grow continuously, as virtually all large publicly-traded American businesses, including those that pursue “lean” practices, have attempted to do for the past 30 years or more.  Steady growth in size and scale presumably improves profitability by conferring increased control over market prices and decreased costs. Unfortunately, as Toyota has discovered, the strategy never works. The flaw in this finance-oriented growth strategy is the belief that profitability improves by taking steps aimed at increasing revenue and cutting costs.  ...

Continue reading this entry »

Tom Johnson: Reduce cost by nurturing relationships, not by cutting costs By Thomas Johnson, co-author of Profit Beyond Measure - Last updated: Thursday, January 7, 2010

Since my first encounter with the company over 20 years ago, what has always impressed me about Toyota is a deep commitment to the idea that financial results emerge from managements' careful attention to nurturing process, not from their taking steps to achieve financial targets.   For decades, no other company has been as focused as Toyota is on reducing costs.  But no other company seems to understand as well as Toyota that lower cost is not achieved by cutting costs; instead, they lower cost is reached by cultivating patterns of relationships that are designed to continuously reduce the resources (including time) and effort required to serve customers better ...

Continue reading this entry »

Tom Johnson: Lean as a shared vision By Thomas Johnson, co-author of Profit Beyond Measure - Last updated: Wednesday, January 6, 2010

If people resist overtures to adopt lean, the first thing to do is ask "why?"  Ask them to define what lean means to them. Get them to specify the purpose that they think lean fulfills.  Then ask them to define what they now do and the purpose it fulfills.  If they believe that the purposes of lean and of what they now do are different, why?  If the purposes are the same, which approach do they think is the better one to achieve that purpose?  Why?  If they think lean might be a better approach, what keeps them from adopting ...

Continue reading this entry »