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5. Toyota67


Toyota holds a unique place in the global automobile industry.The way Toyota designs and manufactures cars has led to an unbelievable consistency in its processes and products. Toyota designs cars faster than global manufacturers. Toyota’s cars are among the most reliable and extremely cost competitive. While many American and European car manufacturers have continued to struggle in recent years, Toyota has gone from strength to strength. Soon, Toyota will be the largest car maker in the world in terms of revenues. Many attribute Toyota’s success to just-in-time and manufacturing excellence. But what is less appreciated is the role played by knowledge creation and sharing in building the company’s strong competitive position.

Toyota has attempted to encourage employees to learn in various ways. The company motivates employees to grow in their jobs by constantly identifying, analyzing and solving problems. Managers deal with problems by going to the source and personally observing and verifying data rather than theorizing on the basis of what other people tell them. Even senior executives are expected to have an in-depth understanding of the situation. This is called genchi genbutsu. That means studying the problem first hand and having a thorough grasp of the situation before actually solving the problem.

Toyota believes in standardized tasks and processes. The company deploys stable, repeatable methods everywhere to maintain predictability. Toyota standardizes existing best practices. It then encourages individual initiative and creativity to improve the standard. Innovative ideas that work are then incorporated into a new standard. Continuous improvement initiatives result in standards being redefined from time to time.

Individual employees do come up with innovative ideas in many organizations.Where Toyota scores is in its ability to standardize and practice the new idea across the organization until a better way is discovered. The Toyota way of learning is all about standardization punctuated by innovation which then gets translated into new standards.

Toyota emphasizes hansei or reflection at key milestones. After a project is finished, employees identify all the mistakes made. Then steps are taken to prevent the same mistakes from happening again.

Toyota does not believe in flamboyance. Indeed, many observers dismiss the company as boring. But Toyota could not care less. Toyota believes that learning is all about having the capacity to build on the past and move forward incrementally, rather than start over and reinvent the wheel with new personnel in each project. So the company believes in stability of personnel, slow promotion and very careful succession planning to protect the organizational knowledge base.

At Toyota, Kaizen or continuous improvement is an important tool for learning. The essence of Kaizen is an attitude of self reflection and self-criticism, accompanied by a burning desire to improve. Employees can openly address things that did not go right, take responsibility and propose suitable measures to ensure that the mistakes do not happen again.

One technique Toyota uses effectively is to ask “why” five times when dealing with a problem. By doing so, Toyota employees go beyond the symptoms to the root cause of the problem. The aim is to take counter measures at the deepest level of cause that is feasible and at the level that will prevent recurrence of the problem.

Toyota understands that the key to organizational learning is to align the objectives of all its employees with common goals. Toyota believes that simply setting specific, measurable, challenging goals and then measuring progress, is highly motivating, even when there is no tangible reward associated with success. Toyota sets challenging goals and is passionate about measurement and feedback. Toyota uses Hoshin Konri, the process of cascading objectives from the top to the work group level. Every team member knows his or her small number of specific objectives and works on them through the year. During formal review sessions, the progress towards achieving Hoshin Konri objectives is monitored.

Many companies waste their time on fire fighting and introducing quick fix improvements. What Toyota does is to focus on long term improvements through Hansei and Kaizen. Reflection and a relentless focus on making further improvements have helped Toyota in creating and applying knowledge almost as a matter of routine. The transformation of Toyota into a learning organization has not happened overnight. It has taken decades. But it is precisely because of its superior ability to learn that today Toyota is far ahead of others in the global car industry. The task of building a truly learning organization is daunting but so too are the rewards. That is the message we get from Toyota.

6. Partners HealthCare68


Partners HealthCare (Partners), a group of Harvard-affiliated hospitals in Boston, illustrates how experts can be supported by a well designed knowledge management system. Partners has attempted to embed knowledge throughout the information systems used by its physicians. While prescribing a drug, ordering a test, referring a patient to another physician or calling up the patient’s medical record, the knowledge base can be accessed. For example, when a doctor calls up a medical record, the system may recommend that some follow-up tests are desirable.

At the core of the knowledge management system at Partners lies a computerized physician order entry system which packs a lot of knowledge. For example, the system may inform the doctor that the drug being prescribed may not be advisable as it may interact with a drug the patient is already taking. Ordering is where physicians take decisions about patient care. It is the point at which knowledge is most valuable.

There are also occasions when physicians need knowledge when they are not face to face with a patient. For example, there is a system of alerts to physicians when a hospitalized patient’s monitored health indicators significantly depart from the norms. In that case, the physician can immediately visit the patient or advise a nurse to change the treatment.

A physician may use different systems for different transactions. But all these systems are integrated and leverage a common database of patient clinical information and a common logic engine. Partners has also assembled various other sources of knowledge that are provided through online knowledge repositories in an integrated intranet portal.

There is clear evidence that the system is having a major impact on the way health care is being offered by Partners. According to some estimates, serious medication errors have been reduced by 55%. The quality of prescription has also improved, with cheaper and more effective drugs being used more often.

The tracking mechanisms within the system can detect whether the physicians use the embedded knowledge and change their treatment
decisions. This serves as a useful measure and helps understand how effectively the knowledge management system is working. The system facilitates measurement of key processes. The measures serve as the basis for ongoing efforts to further improve healthcare processes.


It has not been easy to put in place such a sophisticated system. Partners had to pull together the knowledge base and logic modules with an integrated patient recording system, a clinical decision support system, event management systems for alerts, an intranet portal and several other system capabilities. Off the shelf packages were not available. But Partners was motivated to go ahead with the knowledge management system in view of the high levels of medical errors.

Having decided to go ahead, Partners planned the project carefully. Partners realized that the knowledge being embedded into critical processes, had to be of a high quality and also current and up-to-date. Committees were set up to identify, refine and update the knowledge in each domain. Participation in these committees became a matter of prestige. Physicians became willing to devote time to codifying knowledge within their fields.

The people for implementing the system were selected carefully. Instead of a back-room IT group, Partners used people skilled in medical informatics, for implementation. Partners leveraged the several medical informatics departments in Partners, headed by people with a good understanding of patient care as well as information technology.

As the initiative was difficult and expensive, Partners decided to focus on truly critical knowledge work processes. Decisions were made about which disease domains and which medical sub processes to address and in what order. Partners also identified fields with many disease variants and multiple alternative treatments and protocols that were more difficult to include in the knowledge management system.

Partners has attempted to combine the best of information technology and human intervention. The system only provides a recommendation to the physician. There is no pretension that technology will replace experts. It is expected that the physicians will combine their knowledge with that of the system, to make the right decision.


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