General Motors And Toyota (cultural Difference)

GENERAL MOTORSThe Giant who THOUGHT he knew it all….

By: Pranav Gupta [email protected] om

General Motors (GM) is the world's largest automaker and has been the global industry sales leader for 76 years. – – – –

Founded in 1908 About 2,84,000 employees Global headquarters in Detroit Manufactures its cars and trucks in 33 countries

In the Nut Shell… • Importance of “Execution-aslearning” over “Execution-asefficiency” • Most executives believe that flawless execution of operations is the surest path to customer satisfaction and positive financial results • Psychological Safety

Execution-as-Efficiency VS Execution-as-Learning Execution-as-Efficiency

Execution-as-Learning

Leaders provide all the answers

Leaders set the directions and clarify the objectives

Employees follow the direction

Employees looks for the answers

New work process development is New work process development infrequent keeps on evolving One way feedback

Feedback is two ways

Fear is often a part of the work environment

Fact is well understood that fear would inhibit the ability to experiment and thus the learning process

What’s with Execution-as-Efficiency???? This is an old method of management that was successful at the time of “Manufacturing- Dominated era”. Following were the consequences of the same: – Critical information and ideas failed to rise to the top – People didn’t have enough time to learn – Unhealthy internal competition aroused – Companies thought they can do no wrong

w.r.t. General Motors….

GM faced a huge loss of $38.7 Billion.

Meanwhile at Toyota…. The world’s largest Automaker – Established in the year 1937 – Headquartered in Aichi, Nagoya and Tokyo – 3,16,121 Employees followed the management style which was

The Toyota’s Way had the following components: – Adding value to the organization by developing its people – Recognizing that continuously solving root problems drives organizational learning

Reasons for the failure…. Psychological safety was the identified reason for the failure of “The Toyota Concept” in other companies.

Why Psychological Safety???? Psychological safety is crucial, especially in organizations where – knowledge constantly changes – where workers need to collaborate – where those workers must make wise decisions without management intervention

Does Psychological Safety Hinder Performance?

Stairway to Heaven…. Organizations that adopt an Execution-as-Learning model focus on – learning faster rather than doing better than competitors. – sacrifices shot-term efficiency to gain insight and respond to novel problems and attain long term benefits.

There are ways to get there.

• Provide process guidelines • Provide tools that enable employees to collaborate in real time • Collect process data

Conclusion No one style of management is the best for any organizations. It has to be a mix of both “Execution-aslearning” and “Execution-asefficiency”.

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Thank You for your patience…..