Tuesday, November 24, 2009

Honda’s Three Joys – by David Carlisle

In 1978, fresh out of Rensselaer Polytechnic Institute, I went to Colgate Palmolive and immediately started working on corporate global supply chain strategy. It was a great education. My coaches were Juan Panellas and Ed Healy – they directed Colgate’s global supply chains. I can’t thank them enough for my education and attitude – I still think about these guys every day. I continued to do strategic planning through the 1980s, but it was not until the late 1980s that I happened upon Honda’s “Three Joys.”

After Colgate, my next coach was Honda’s Richard Colliver. Everybody knows Dick. We would spend hours, days, months thinking – I never learned more in my life. The kernel of our thinking for about 15 years was Honda’s Three Joys – the Joy of Producing, Selling, and Buying. There’s nothing secret about it – you can find it here: The Three Joys

The Three Joys first appeared in 1951, and by 1956 were transformed into a mission: “Maintaining an international viewpoint, we are dedicated to supplying products of the highest efficiency, yet at reasonable prices, for worldwide customer satisfaction." This is coupled with Honda’s foundational principle: "Respect for the Individual" – a philosophy made actionable by an organizational commitment to the Three Joys.

Before I go any further, I have a situational confession to make. Some IT integrators call me a “rogue consultant.” They don’t like me. I’m a Democrat who detests Sarah Palin, so I’m not her kind of going rogue. I’m just not afraid to be brutally honest. She’s running for president. OK, ever been in a sidebar, or even a real bar, and the conversation strays from baseball (the world’s greatest sport) to corporate strategy? Somebody mentions Michael Porter, Bain’s secret Hershey strategy, BCG’s lazy cows, McKinsey’s rarified clicks, or some author with the latest trick ‘n win play. You are supposed to be knowledgeable in all this, and expected to say something profound. But, inside your mind you are going “Zzzzzzzzzzzzzzzzzzz.” OK, maybe it’s just me. Why are so many strategists so damn boring? It’s because if they ever studied the Three Joys, they’d skip the buzzword bingo and be talking about baseball.

Honda is the most strategic-focused, and inherently ethical (don’t be confused by pre-1993 history – Honda is all about becoming perfect, not being perfect), car company; often overlooked because industry watchers do not understand them. Just drive a Honda for a few miles and you will understand that this is a different kind of vehicle that, indeed, we can understand. It is marvelous. This differentness, this marvelousness, goes back about 48 years.

Honda’s Three Joys constitute the perfect consumer goods manufacturing strategy. If you achieve the Three Joys, you will be successful. It starts with the Joy of Producing. This is all about the joy you gain from making the stuff you sell. Soichiro Honda said that this is a joy only known for the engineer. I generalize this Joy to be the joy of creation – the folks who create the products of your enterprise; Products that are “of superior quality so that society welcomes it.” This joy comes from creating things of superior quality that people want and are willing to obtain. It is important to note that Joy is the objective here, which talks to real human beings and culture. Recognition and acceptance of this Joy can and should drive the culture of any organization that “produces.”
I strongly believe that most of us in this industry are creators of sort. We exist in our business enterprises to create a work product. It can be to create a new powertrain, a new policy, to install an instrument panel, to create a repair order, to answer a question. In each thing we create I ask three questions: (1) Is what I created of superior quality? (2) Is my customer willing to obtain it? (3) Am I happy doing my job?
The second Joy is the Joy of Selling. Honda-san postulated that if your product was high quality, of superior performance, and reasonably priced, then people all along the value chain who sell it will experience joy. I substitute “service” for product to accommodate all the products in our enterprises. We can all identify with this by reflecting on our restaurant experiences. The litmus test for a good restaurant is the attitude of your server. Typically, if an experienced server is obviously happy, they have made employment choices that reflect the quality of what they are selling. So, if your server is happy, you can safely order the specials. This is the most difficult Joy to instill and nurture in your enterprise – it is all about becoming, not being. It represents a lifetime of work.
I strongly believe that we are, also, all “sellers” in our work place. We sell the fruits of labor (ours and others’) down the value chain. If we cannot experience the joy of selling, then something is wrong. Something might be wrong with the enterprise, or something might be wrong with the individual. I always ask people if they are happy. I have thick skin; I can take tough feedback. I want to know if they are unhappy and why they are unhappy. I might find out that we have some problems with our Joy of Producing, and I will search elsewhere. Or, I might find that the problem lies with some personal issue. We can help there, too. Discerning this Joy, and any root causes, is critical for enterprise success.
The third Joy is the Joy of Buying. Honda-san described this with “…it is none other than the purchaser who uses the product in their daily life. There is happiness in thinking, 'Oh, I’m so glad I bought this'.” I call this the joy of ownership; it is all about the joy of use. This is the acid test of a strategy – if your buyers are not happy, they will quit buying.
We are all buyers and owners in our enterprises. We all use stuff, not just cars. We use tools that are supplied to fix a vehicle, we use policies created by others, we use IT to make our jobs easier, we use office space bought by our services department, we use paper in our copy machines, we use information given over the telephone to diagnose a problem. Each of us chooses to use stuff in our companies – when we choose not to “use”, we coin cool excuses called “shortcuts”, “renegade”, or “skunk works.” When there is no Joy in “use” then we really have a problem. Although this is the Third Joy, it is the most telling – if one fails to deliver on the Joy of Buying, they will inevitably have problems in producing or selling.
The Joy of Producing, Selling, and Buying are the core elements of one of the world’s most successful enterprises. Implicit is a focus on the unique ability and contributions of individuals – “Respect for the Indvidual.” Many people simply do not “get” Honda – they try to fit it in some pigeon hole, or write it off as hopelessly unique – a rogue car company. All this is not some hokey airport self-help book slogan or motto. Only individuals, people, can experience Joy; Companies can’t, organizations can’t, nor can “divisions.”

Dick Colliver retired this year from Honda. I spent about 20 years thinking with him. Once he moved to Honda we spent 15 years of thought focused on the Three Joys. We never needed another strategy, even when we encountered dips in the road. He is a great friend and Honda certainly is a great company. Both deliver on the Three Joys.

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