I felt great that all the stress and hard work was finally paying off, and i kept waiting for my efforts to be acknowledged. But I never got a thank-you. I got some satisfaction from the business performance itself, but I was frustrated and discouraged that no one back at headquarters seemed to recognize how far wed come. My staff was discouraged too and complained to me, we do this great job, but we never get a thank-you. Do the japanese think were their slaves? I finally gave up hope of getting praise. I figured it was just a cultural thing. But little by little, i began to understand what was behind.
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No one seemed the least bit interested in huffington laying blame. Rather than chastising me and putting me on the defensive, they talked to me about what was going window wrong and how to fix. I immediately felt that I was part of the team and worked that much harder to get us out of our predicament. I realized that others in the company had a lot of trust in me, and I wanted to live up. I cant help but think about what would have happened in a typical. When things go wrong, the instinct is to find a scapegoat. I probably would have been fired and replaced. And the problems would still be there for the new person to deal with. Dont Rest on your laurels, my managers and I really knocked ourselves out during those early years at Toshiba, with little to show for. Even though I didnt get beat up about it, i was under a lot of pressure to make the goals. We started to achieve the budget in the third year, and we continued to make it for something like nine periods in a row.
We almost made those numbers, but the product mix—and profit—was not as planned. We made it with printers; the pc sales never really got off the ground. I was doing the best I could under the circumstances, but i expected big trouble when I met with the japanese higher-ups. They represented manufacturing, product development, and the money, and I represented sales and marketing. Everyone was under stress. I was prepared for a knock-down-drag-out fight over who was to blame for our lousy performance. Those early meetings were another source of insight into japanese management. When we got together to talk about why we were underperforming, no one got emotional. The essay discussions were always calm, and the focus was always on solving the problems.
When I say many people miss their business plans, i include myself. From the first month thesis on at Toshiba, i missed the plan. We had a personal computer the market didnt want; we couldnt make any changes without getting engineering in Japan to approve and implement them; and management in Japan didnt fully understand the. The budget called for 3 million in sales in the first six months. We shipped approximately 3 million worth of equipment—but we got paid for only about half. Since we were unable to make the engineering upgrades we had promised, the rest came back. The next year the plan called for 10 million.
When I tell. Peers about 6-month budgeting, i get one of two reactions. Either they say we spend too much time planning, or they ask why we dont use a quarterly plan. A quarter is too short a time to turn the ship. Besides, it would be too time consuming to create the plan, get it approved, communicate it to everyone, and start performing against it every 3 months. Six months is a good compromise. You ensure that the budget is realistic, but you dont spend all your time on the budget process. Having lived with it for nearly a decade, i think it feels just about right. Fix the Problem, not the Blame.
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Also, each new budget gave us a chance to wipe the slate clean and start over, which was good for motivation because it allowed managers to adjust goals that no longer seemed achievable. All managers miss their budgets. But if you slip so much that you lose hope of reaching your target, you lose motivation. You know prisoner you dont stand a chance of making it, so you give. When i arrived at seiko instruments, its seven divisions were using a 12-month budget cycle. One of the computer peripherals divisions at seiko instruments, which was in a particularly volatile industry, was so far off the plan that managers werent even referring to the original budget. They had given up on it and were putting up a new set of numbers every month rather than concentrating on developing and implementing countermeasures to minimize the negative variances to budget.
Since then, all of our divisions have switched to a 6-month budget. This year, the same division was off budget again—but it was off for 3 months instead. Knowing that the end of the fiscal period was just 3 months away, the managers immediately developed countermeasures to minimize the variances to budget. Midyear, they reset the budget and came up with additional countermeasures. If they had still been using a 12-month budget, they would have been directionless again. But by stopping to ask why they were off and then making adjustments, they put a rudder on their ship. The division used to be 30 off budget, but now its maybe 10 off—which is something you can get your arms around and fix.
I had no sooner developed a budget and countermeasures to correct variances than I was going through it all again. I was giving twice as many performance reviews and awarding bonuses twice as often. To me, 6-month budgeting was just twice as much work. But after three or four fiscal periods, i began to appreciate. I came to welcome the opportunity to change the budget because the world had changed so much in 6 months (remember, this was the pc business!). And having two deadlines each year leaves less room for procrastination.
If youre slipping from the budget after the first quarter and you know you have only 3 months instead of 9 to get back on plan, you work harder to figure out what. Theres a greater sense of urgency to hit the target. Of course, budgets are also a planning tool. If the budget becomes meaningless during the course of the year, the company is like a ship without a rudder. And if youre running a company with several divisions, the effect is cumulative. If, say, three divisions are each off by 20, its pretty hard for senior executives to know what to expect. If, on the other hand, the divisions are pretty much on track, management has some control.
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We then reentered the pc market with a laptop computer and gained a leading share in that market. By the time i left Toshiba in 1989, 350 American and two japanese employees were supporting annual sales of 400 million. Perseverance and patient capital helped, but i also attribute toshibas success to the management approaches that allowed the company to learn and stay on track. Let me explain how I came to accept—and even appreciate—these approaches and why i think non-Japanese managers should use them too. Budget for Six Months, when I went to work for Toshiba, i immediately had to adjust to a 6-month budgeting cycle. The japanese fiscal year generally runs from April through March. Although a full-year budget is presentation prepared in January or February, only the first 6 months are approved—the a period. The b part is modified based apple on the initial results in the a period and is formally approved in August or September. Businessperson, i had come in with a 12-month mind-set, so the budgeting periods seemed to come up too fast.
Software and were hardly elegant machines. (cpm is the operating system for the 8-bit computer.) The trade press, in fact, described the pcs as rugged tanks. Within a month, ibm made the whole cpm world obsolete with the introduction of the ibm pc dos machine using 16-bit cpu (central processing unit) technology. We had a difficult product to sell, and problems of culture and credibility made it hard to convince toshibas Japanese engineers to respond. The problems seemed insurmountable. Frankly, i thought Toshiba would fail and abandon the. We overcame the initial business setbacks and over the next three years introduced a better quality dot-matrix printer and went on to build a 75 writer million printer business against such formidable opponents as Epson, nec, and oki.
overcome his weaknesses. From this vantage point, ive seen how powerful seemingly simple things like six-month budget cycles, consensus decision making, and kaizen, or continuous improvement, can be, especially in combination. While non-Japanese managers are familiar with—and may even practice—some of the typically japanese management techniques, rarely do they practice them all. I want to encourage non-Japanese managers to put aside economic, cultural, and trade issues for the moment and learn from what ive seen the japanese do every day. When I was hired in 1981 to help Toshiba capture the. Computer market, i was full of ambition and energy. I needed it, since all I had to work with were four Japanese engineers, one American secretary, and two misfit personal computers the. The two cpm-based, 8-bit cpu personal computers could not run any.
Ive also come to understand why these techniques are so effective; ive seen type them change peoples behavior—including my own. And ive learned that many, though not all, of these approaches are equally effective in the United States. My research lab has been Toshiba America, where i was vice president and general manager of its computer division for nine years, and seiko instruments usa, where i have been president. Toshiba America and seiko instruments usa are. Companies, have mostly American employees, and compete in the. Market, but they have strong cultural and financial ties to japan. I have had close relationships with the japanese managers assigned to me and with those to whom I reported in Japan. I have seen how they manage their own people, american employees, customers and vendors, and the external marketplace.
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Back in the late 1970s, as a consultant to several Japanese computer giants, i read everything I could about Japanese business. It was all very interesting—interesting, but not particularly useful. When I became a line manager in 1981, i realized how little of what Id read had any practical value. I couldnt control interest rates, the education system, or the culture. Wasnt there something to learn from the japanese that I could actually apply in my own managerial pdf role? Having spent the past ten years working for Japanese companies, i can now answer that question. As an insider, ive discovered more than ten specific management techniques the japanese use to run their businesses.