Many organisations scale effectively by hiring promising people and then teaching and motivating them to do exceptional work.
The following example shows how important is to hiring and developing people.
Tamago-Ya is a Japanese company that produces fresh box lunches and sell them to Tokyo office employees. The typical order comes from a office that buys lunches every weekday. Each lunch box contains six or more items and customers have a fairly long list of options to choose from stir-fried beef with oyster sauce, boiled spinach, etc.
The company takes orders between 9am and 10:30am, prepares the food with fresh ingredients each day and assembles the lunches near Haneda Airport a 60 to 90 minutes drive from their customers in downtown Tokyo.
The lunches are delivered by 12 noon the same day, so there is little margin error in assemble or delivery. From the 70,000+ lunches Tamago-Ya delivers every day, late orders are very rare and fewer than 50 are wasted.
Without a doubt, the company needs to have a sophisticated procurement and forecast system, but his founder Isatsugu Sugahara explained that they are decidedly low-tech.
The company relies on market intelligence from van drivers, mostly high school dropouts many of whom were arrested in their youth.
These drivers interview and choose their customers in their territories, they also reject customers when it will be too difficult to deliver lunches on time, each driver own his or her route. The driver’s compensation depends on how many lunches their customers buy and weather they can keep waste low.
Boxed lunches are delivered in reusable containers that drivers collect about 2pm, this give them the chance to find out what customers like and didn’t like and to get an idea of what customers will order next day.
Every evening, each driver talks to the area manager who oversees his or her team. Forecasts from these conversations are sent to the central office so they can plan next day’s production.
Suppliers deliver raw materials by 5am, this order is an educated guess based on previous day report from the drivers. Tamago-Ya also relies on these estimates to start preparing food and loading vans even before orders start coming in at 9am.
Tamago-Ya founder knows that the methods his company uses to motivate and ensure accountability are the reason for the success of the business.
Tamago-Ya case illustrate how people make the place, the drivers reciprocate Sugahara’s faith in them by achieving superior performance, feel and act like owners because they choose customers and routes and at the same time they feel obliged to customers, peers, area manager and the CEO who gave them a chance to rebuild their lives.
Read more: Robert I. Sutton and Hayagreeva Rao “Scaling up Excellence“. Random House Business and Tamago-ya of Japan: Delivering Lunch Boxes to Your Work. Harvard Business Review Case Study.