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Kaizen: The Japanese Philosophy that Made Toyota a Success


In the mid 1900s, the United States dominated the world automobile market. Ford invented the motor vehicle, and Americans were generally considered the “best” car makers in the world. Yet today, Japanese car makers like Honda and Toyota reign supreme. What changed?

One word: Kaizen.

Kaizen is the philosophy that allowed Japan to overtake the United States in the car market. It’s also an essential philosophy for every entrepreneur to learn. Understanding and implementing this strategy in your business will help you save money, boost profits, create better products and instill more loyalty in your staff.

So, What is Kaizen?

It’s a commitment to gradual, incremental improvements. Instead of trying to make huge leaps of improvement, you focus on making things just a little bit better. Then again, a little bit better.

Toyota did this superbly. Every staff member was encouraged to make suggestions on the process. Employees who helped the company improve a process were financially rewarded. Even if you just managed to shave 3 seconds off placing a specific screw, you were rewarded.

At other car dealers, employees were taught to keep the conveyer belt moving at all costs. Stopping the belt was tantamount to money flushed down the drain. Yet at Toyota, every employee was given a “Stop!” bell they could ring at any time. Employees were encouraged to ring the bell whenever they saw any sort of imperfection in the part they were working on.

In Ford and GM, cars frequently had to be fixed after they had been completely built. This costs the company a lot of time and money. In Japanese companies, all these errors were eliminated before the vehicle was complete.

The Core Principles

The overarching idea is that small improvements make a big difference. More specifically, these are the exact principles to apply in your business:

1)      Always be improving. Be on the lookout for ways to improve each and every area of your business.

2)      No improvement is too small. Acknowledge and reward every improvement, even if it’s tiny.

3)      Empower your staff. Kaizen should be applied by everyone, from the janitors to the CEO.

4)      Make improvements on the fly. Real improvements are usually discovered in the real world, not in a meeting room.

5)      Base your decisions on real data, not people’s opinions. An improvement is valid when its impact can be measured.

The specific way you implement these principles might be very different than other companies. After all, you’re not manufacturing cars. Try these principles and see what works for you. Then, systematize what works and write it down. Don’t just talk about it; but make it an integral part of employee training, as well as your company culture.


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About Sean Donahoe

Sean is one of the most recognized industry leaders in business and marketing. As a popular speaker, author, consultant he has helped over 50,000 students world wide find success in their businesses and has consulted with Fortune 500 companies and businesses of every size grow and thrive...

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