Profit Beyond Measure

By H. Thomas Johnson and Anders Broms

Book Overview

Waste has plagued almost every industrial-age firm for the past century. In this powerfully argued alternative to conventional cost management thinking, experts H. Thomas Johnson and Anders Br ms assert that any company can avoid the waste that is generated through excessive operating costs in the short run and excessive losses from market instability in the long run. To gain more secure levels of profitability, management must simply change how it thinks about work and how it organizes work.
Profit Beyond Measure details how two extremely profitable manufacturers, Toyota and the Swedish truck maker Scania, have rejected the traditional mechanistic mindset of managing by results that generates waste. Johnson and Br ms explain how Toyota and Scania achieve their legendary cost advantage through a revolutionary concept they call managing by means (MBM). Instead of being driven to meet preconceived accounting targets, the production systems of Toyota and Scania are governed by the three precepts that guide all living systems: self-organization, interdependence, and diversity.
Amid a wealth of new insights into Toyota's vaunted system, Johnson and Br ms introduce the tools of MBM to show how design, production, and profitability analysis are done to customer order. They demonstrate that by following the principles that emulate life systems, even a lean and profitable company can organize work to greatly lessen its long-term earnings instability and sharply reduce its short-run operating costs.
Scania has achieved sixty-five years of financial stability and longevity in the face of fierce competition. Toyota has amassed a market value since 1988 that has rivaled -- or sometimes surpassed -- the American "Big Three" automakers combined. The principles that Johnson and Br ms set forth in Profit Beyond Measure can guarantee the same richer, longer life to any company that applies them.

• Format: Paperback
• Language: English
• ISBN: 1439124620
• ISBN13: 9781439124628
• Release Date: August 2008
• Publisher: Free Press
• Length: 280 Pages
• Weight: 1.00 lbs.
• Dimensions: 0.7" x 6.1" x 9.0"

Customer Reviews

Tom Johnson, financial heretic!

Comments on Profit Beyond Measure by Tom Johnson:Tom Johnson's overview of business thinking is astoundingly clear, the beginning of the revolution that Dr. W. Edwards Deming demanded for so many years.The Toyota story is told beautifully in chapter 3; now I begin to understand what happens in that Kentucky facility.Chapter 4 is the weakness of the book; there is no there there. The Scania "secret" is not in the same universe as that at Toyota. What more evidence do we need than the sale of the company?Chapter 5 is fascinating. Tom Johnson the heretic! A modern day Martin Luther! No one on Wall Street will want to know about orderline analysis. However, if those using it prosper...The stock market vanish? That is precisely what will happen if Tom Johnson's thinking catches on. And that can't happen too soon. It may already be too late to preserve our culture as we know it. But then, it may be time.Most in business will not want to hear the last two chapters. But no one wants to hear that they have cancer either, right? This patient (the world economy) has cancer, and no one knows if survival is possible. I can't wait for the next iteration of this "stuff." The books that Johnson (and a few others, like Dr. Ed Baker) are going to write could make all the difference in our future. Dr. Norman Borlaug and his cohorts are trying to feed the world in spite of potentially deadly water shortages; Johnson and a few like-minded intellectuals are trying to feed the world correct thinking in spite of potentially deadly shortsightedness.

At last, a vision of capitalism with heart

I've always found the notion that businesses should 'maximise profit' to be naive, but to come up with a better business rationale seems to get real messy, quickly. This book uses some concepts that moved me when I read Fritjof Capra's 'The Web of Life', and applies them to effectively and realistically running a business in a competitive environment.In integrating living systems concepts with management control issues, this is the most philosophically thoughtful book I've seen written by someone who understands accounting.

20th Century Manufacturing Illuminated

For manufacturers the 20th century was the story of Ford and Toyota. The story of the transition from mass production to lean production has been told many times, but often focusing on the techniques, not the strategy. Professor Johnson has developed a profound insight into the strategy behind Toyota's approach, framed as management by means, rather than management by results.This is the most important insight into the Toyota Production System which has come my way in the last ten years. Johnson demonstrates why the Toyota Management by Means approach gives superior long term value to customers, shareholders and employees.Profit without Measure is essential reading for any manufacturer building a strategy for World Class Manufacturing.

Living systems applied

Tom Johnson's new book could be just as impactful as Relevance Lost. His close study of perhaps the most powerful and robust company on the planet, Toyota, exposes what others don't see. Toyota is perhaps the most studied and imitated company, and not just by the other autos. Many people look for that one missing link that others don't see. Others have seen it, but few have articulated it as well as Johnson. If you resort to curtailing travel and eliminating donuts to try and make budget, or think lean is a material control system, or simply feel that their current patterns of management will never get you where you need to go, you should read this book. Through the attention and cultivation of the work and relationships of the business and not just the measurement results you will find many disconnects in how you are serving your customers. The work of the organization carries all of the information you need with it, and while output measures are important for reporting reasons, they are not helping you to design a system that connects workers to customers. This can help.I predict this book and not Relevance Lost will be considered Johnson greatest contribution. Enjoy!