Why Honda’s ‘Ode to Joy’ should matter to you

Honda’s new chief executive in a recent newspaper article maintained that every Honda product, however small, acquired by a customer represents the whole company.

Substandard products are not tolerated on the basis that the customer affected by a one-in-a-million defect still has a 100% reject product.

Take my word for it, as one who worked in Honda, these guys mean and act upon every word they say. Their pursuit of quality has no end.

My twenty years spent in the motor industry prior to joining a housebuilder left an indelible mark in my brain and, try as I might, I just cannot stop talking about cars.

I consider myself fortunate to have experienced what it is like to be part of an industry that must change or die and from my first day in housebuilding I have remained convinced that no other industry can offer so much learning to house building as cars.

But there are some who seem to disagree with me.

At a recent meeting I used the terms car and house in the same sentence. This combination lead one of the attendees to sound off using words I have become all too familiar with – they went something like this…

“Look, I don’t understand why people keep on trying to compare cars with houses. One is built in a nice clean factory by a combination of direct labour and robots, while the other is built outside in all weathers by a contract labour force that doesn’t feel involved with the end product – you just cannot compare the two.”

I find this attitude so frustrating. Ok, if you are not convinced by the car analogy look around at other industries that have changed, perhaps retailing or the airlines, but do look around. If all we are going to do is copy and benchmark our fellow housebuilders we run the risk of ending up with a sort of mass mediocrity.

During the rest of this article and into next month I want to share some thoughts with you. This month I want to look at a car makers’ approach to people management.

Respect and The Three Joys

The Egan report calls for committed leadership, a focus on the customer and a commitment to people. The next 250 words provide the best proof I have found that such a philosophy can and will work.

Honda, a relatively small player in a global market, but achieving one of the industry’s highest gross margins, has a company philosophy based upon the two fundamental beliefs of Respect for the Individual and The Three Joys.

In Honda’s own words: “Respect for the individual comes from a fundamental belief in the uniqueness of the human being. The human being is born with the capacity to think, reason and create - and the ability to dream. This belief calls on Honda to nurture and promote these unique characteristics in our company by respecting individual differences and trusting each other as equal partners.

“Because of our belief in the value of each individual, we at Honda believe that each person working in, or coming in touch with, our company, directly or through our products, should share a sense of joy through that experience. This feeling is expressed in what we call ‘The Three Joys’.”

The three joys are:

• The Joy of Buying, which is achieved through providing products and services that exceed the needs and expectations of each customer. It is essentially the establishment of a relationship with the customer, beginning with the product and continuing through the sales and service experience;

• The Joy of Selling, which occurs when those engaged in service and sales within Honda experience pride and joy in satisfying the customer; and

• The Joy of Creating, which occurs when Honda associates and suppliers involved in the design, development, engineering and manufacturing of Honda products recognise a sense of joy in the company’s customers and dealers.

Respect for the Individual and The Three Joys permeates the entire Honda business. They drive the way people think and behave, They drive R&D and they drive relationships with suppliers and dealers.

I know that in the rough, tough world of housebuilding the thought of standing up in front of your employees and talking of The Three Joys might feel strange.

Indeed, when I joined Honda with my typical aggressive ego-driven western management style I found it quite hard to come to terms with “The Honda Way “ as it is affectionately known. But once I had, I found a spirit of teamwork and energy that was breathtaking.

Lack of respect, and no joy

I have often wondered where the joy is in fitting a central heating system that doesn’t work properly (it is estimated that 20% of installations, or around 37,500 per year are not properly tested or commissioned). Or the joy of expecting a customer to move into an unfinished home or of not providing remedial work when promised. The answer, of course, is there isn’t any joy.

You might argue that the accountants are joyous because of the extra legal completions at year-end, or the cheap rates for installers, but this is a false joy.

The car industry has found that waste, poor quality and lack of customer focus cost you money in the short term and your company in the long term.

People management is, I believe, the most challenging management skill in housebuilding.

It is poorly managed and de-motivated people that cause waste, work inefficiently and fail to put the customer first. It has nothing to do with the fact that a product is built inside a factory or outside in all weathers.

As Egan says: “In the Task Force’s view much of construction does not yet recognise that its people are its greatest asset and treat them as such”

Given the right motivations people can change. In the late 1980’s the North East had a reputation for poor quality and inefficiency – witness the demise of shipbuilding. In that same area today Nissan has the most efficient car plant in Europe and the eleventh most efficient in the world.

If, like Honda, you want to engage in a philosophy of people and customer focus consider these words from the great Soichiro Honda himself: “Action without philosophy is a lethal weapon; philosophy without action is worthless”.