GBR: In a nutshell, what characterizes American Honda’s corporate philosophy?
Ross: It all goes back to Mr. Honda. He founded the company on a set of beliefs the main building block of which is respect for the individual. He felt that no matter who the individual is, no matter at what level he or she functions in the organization, that individual is valuable, so the basic principle for the company is respect.
Beyond that, the next significant thing that Mr. Honda articulated was the Three Joys: The Joy of Buying, the Joy of Selling, and the Joy of Creating. You can think about these Three Joys in terms of Honda’s products and services. For example, being an internal service and support organization, although our customers for the most part are internal, we in IT want to make sure our internal customers feel good about what they’re buying–the Joy of Buying–and what we’re delivering to them. We want to ensure that the money that they have entrusted with us as an investment in these goods and services is well spent, so that would be the Joy of Selling. The people who actually do the construction, the development, experience the Joy of Creating.
I find it interesting that Mr. Honda talked about working for oneself. “Don’t work for the company. Work for yourself so that you get satisfaction and enjoyment.” He believed that if he surrounded himself with associates who did that, then the company was going to be successful.
GBR: So would you say that he meant to be so identified with the company, its goals, and its products, that to work for excellence in the company meant that you were working for excellence for yourself?
Ross: Yes, very well put. Mr. Honda was a remarkable man.
GBR: How would you describe your management philosophy and the way that this philosophy has contributed to your success at Honda?
Ross: I don’t think of myself as having some sort of philosophy. Over the years, I’ve developed a set of values and ways of doing things from bosses, peers, and people who work for me. I’ve parlayed that learning into my management style. I don’t like formality, and I tend to surround myself with people who are also informal. If you look at the culture here at Honda, it’s pretty much informal, too. No one has offices. The space is all open cubicles.
I believe I’ve got high personal values and standards, and I think my staff would say that I’m a fair person. My management style is based upon good common sense. I don’t get emotional very often. I’ve always believed that a boss is only as good as the staff he or she assembles. I want to surround myself with good people who have differing opinions so that I get different “flavors.” Once a direction is set, I believe in giving staff resources and getting out of their way; they’ll come through for you.
Communication plays a big role in my philosophy. I have open communication with all members of my organization regardless of where they are. If I want to find out something about the organization, I’ll typically go walk around and talk to people—non-management folks. We all recognize that information gets filtered before it gets to me, but the people doing the day-to-day work won’t filter it. You may not like what you hear, but you usually get the straight story.
GBR: So workers feel comfortable telling you the straight story?
Ross: Definitely. Trust is a key element in open communication. If the information received dictates action, then management must verify to determine its credibility. One can take action on information without destroying any confidence. The minute you destroy confidence, open communication is no longer possible.
We also have the Information Systems Department (ISD) portal on our Intranet. There people can ask me questions anonymously if they prefer. One of my administrative assistants receives the question, forwards it to me, and the answer travels the reverse path. I never ask the identity of the person asking the question.
Finally, the other major component of my management style is to recognize and celebrate successes. People need to be patted on the back. You need to give people credit for what they’ve done. I’ve been in this business a long time, and that always felt good to me when I was younger.
GBR: What were your job-to-job transitions like for you?
Ross: My first transition from aerospace to Coors was significant because that’s where I switched from the scientific, mathematical, and engineering side of business into the business side. My background and training were in engineering and mathematics, although I later completed my Executive MBA.
The transition from Coors to Honda was really fairly easy because the distribution processes are almost identical. It is just that Coors has what they call distributors versus Honda’s dealers. The hard part when I came to Honda was in understanding the Japanese culture because I didn’t know anything about it.
During one of the first presentations that I made, a Japanese executive closed his eyes in the middle of my presentation. Because I didn’t know the culture, I thought, “Oh, no, I’ve lost him! What have I done?” But he was just listening and thinking, which is perhaps typical of Japanese business style, and I had to get used to that.
GBR: How did you bridge such cultural gaps?
Ross: With experience came understanding. There’s very little turnover at Honda. For example, when I came to Honda, some of my staff had been here for 30 years, so new people could learn from those associates about the Japanese culture. Instead of receiving a jump-start through an orientation program, new associates learned on the job.
Honda’s Human Resources Division recognized the need for orienting American associates to Japanese culture, and to the specific culture of Honda itself. HR developed especially for new associates a two- or three-day introduction that covers the Honda philosophy, what the company is all about, its facilities, and so on.
GBR: Who are the people who have positively contributed to your professional development, and what have you learned from them that might offer insight to GBR’s readers?
Ross: Certainly many people have contributed—my wife, my family, my business staff. However, when I look back, I would pick Ed Crowe as one who contributed significantly to my professional development. As vice president at Coors, he is the one who taught me to focus on the business and not on technology.
GBR: Can you explain that?
Many IT folks think that they’re in the business of implementing technology, but they’re not. They’re in the business of solving business problems. Technology is just an avenue to do that. If you lose focus such that you and your staff concentrate only on implementing technology, in my opinion, you’re doing the business a disservice.
Crowe was very good at focusing on the business. He had a great business background, so his influence changed me from being so much focused on technology, and I’ve never forgotten that. He is the one who encouraged me to attend the University of Michigan, and Coors funded my degree there. He also gave me the opportunity to run distribution at Coors. I left IT, transferred into the business side, and for two years ran distribution, logistics, and ordering at Coors.
It was interesting and challenging going to a line function and being an IT customer. For the first several months I found myself evaluating things as if I were part of IT. It took me a little while to put on my business hat and say, “Hey, I’m the customer! I need to do things because of the business I’m running.”
I look at that experience as my becoming aligned with the customer. In business, you only exist if you can satisfy your customers. You’ve got to be aligned with them, and you’ve got to understand what they need to help their business.
GBR: From a senior executive’s perspective, what would be your top three recommendations for managers who want to be more successful in today’s business environment?
Ross: Number one, you have to know the business. You have to know who your customers are and understand enough about their businesses that you can respond effectively to their challenges and opportunities.
Number two, you have to stay in touch with your customers—both internal and external. You must communicate frequently with them.
Number three, you must have good communication. An example of this is “Lunch with Tom.” Once a month, 20 to 25 associates join me for lunch; I don’t even know who is coming. People always want to hear from the top persons in the organization; that’s just human nature.
I have seven direct reports, and I allocate three openings to each one of them. Outside contractors also participate because I am so contractor dependent. We discuss the status of Honda’s business and also provide an IT update. Then I throw the meeting open for Q & A, which I enjoy very much. I’ll cancel these meetings when people stop volunteering. As I say, I don’t think you can communicate too much.
GBR: What book have you read recently that has given you good insight regarding some aspect of business?
Ross: The last book that I read was Lou Gerstner’s book, “Who Says Elephants Can’t Dance?” Lou became head of IBM in April of 1993. Each year Lou hosted a CIO meeting for IBM’s customers, and I was fortunate to attend all of them. These meetings were invaluable in understanding IBM’s strategy.
I found Lou to be a remarkable individual. I liked his management style, his directness, and his self-assurance. It was easy to believe that he came into that job knowing all the answers, but when you read his book, you realize that he dealt with a great deal of uncertainty.
You have to be comfortable with uncertainty if you’re going to be a good manager. Even though people such as Lou are often put on pedestals, they go through some of the same trials that other managers do, but just at a different level. Gerstner came into IBM to change its culture, which he certainly accomplished. This resulted in IBM’s regaining its position as a leader in the technology field.
GBR: Thanks, Tom, for sharing your experience and insights with the GBR readership.