The Toyota Way: Helping Others Help Themselves
Two lean experts discuss their Shingo Prize-winning book and mission to spread a culture of continuous improvement
By Jeffrey K. Liker & James K. Franz
The Toyota Way to Continuous Improvement
As we have struggled over the years to make sense of what we learned from Toyota, and to teach it to others in many business sectors, we have developed a broader and deeper view of this thing called “lean.”
Jeff comes at the issue from a practical academic perspective drawing on 30 years of studying Toyota, and advising hundreds of companies. Jim comes at it from a more applied perspective, beginning with his work in production engineering at Toyota, then at Ford, where he applied what he learned at Toyota, and ultimately as a private consultant. We both have a personal mission to positively change organizations so they have a sustainable culture of continuous improvement.
Today, the word “lean” has become ingrained in organizational cultures all over the world and there is a significant consulting and book writing industry built up around this word. The intention of introducing the term “lean” in The Machine that Changed the World was to evoke an image of a holistically healthy organization, like a lean athlete, that can accomplish remarkable things doing more with less. This original concept has been morphed and confused by many organizations with the help of consultants and journalists with only a superficial understanding of lean.
Jeff tried to sort this out in his original book, The Toyota Way, with a four-level model focusing on a foundation of the philosophy, processes which ideally flow value to the customer without waste, people who are continually challenged and improving processes and themselves, and problem-solving as a lean mindset. Fourteen principles detailed the “4P model.”
While the book received a great reception, it was clearly not enough as companies continue to struggle to “implement lean in a sustainable way.” In fact, after years of frustration in trying to teach the whole system, neither of us could point to a single organization that has anywhere near the consistency and depth of continuous improvement at Toyota. Even more alarming, we found that companies had begun to ‘outsource’ their transformational efforts by relying on outside consulting companies to ‘make them lean’ using ‘standardized tool sets’ instead of internalizing the transformation. What was, by design, a coaching model with a teacher/student relationship had morphed into a project-focus on delivering measurable results through kaizen blitzes.
In this article we would like to address why we think organizations have been struggling to go lean and provide some suggestions for a positive way forward. We believe there are four main barriers to achieving the Toyota Way which, as defined by Toyota’s own internal model, is to develop a system that is continually improving while respecting people by challenging and developing them.
Barrier 1: An Epidemic
of Short-Term Thinking
The ability to focus on long-term objectives has been a critical factor for success at Toyota. Coupled with this long-term focus, we have also found a culture of respect and deep functional knowledge at all levels in the organization. This isn’t dumb luck or an accident. Closer study shows that the board of directors at Toyota is made up of current Toyota leaders who themselves are accountable for supporting the culture and driving improvements. They are true leaders and teachers that bring an intimate knowledge of the business through countless decades of experience.
This most senior leadership is able to strongly advocate for the companies’ vision and mission because they have spent their entire careers on the inside of the very system they’re now coaching. With this experience and understanding, they are able to provide superior coaching and guidance to the leaders within Toyota and hold them accountable to deliver on their objectives in accordance with their values. This teacher/student relationship is repeated down through the organization so that each level of the organization is focused on delivering results using the best processes available. This would not be possible if there wasn’t the constancy of purpose and high level of training that is expected at Toyota. With these items in place, Toyota is able to continually impact their Key Performance Indicators and sustain the improvements.
Contrast this to the ‘typical’ thinking that we encounter in other companies. We find that most publically-traded companies are intently focused on the next quarter’s numbers and are busily managing projects that have a calculated ROI high enough to warrant implementation. To implement these projects, a core group of staff-based ‘lean’ experts are quickly drafted, superficially trained, and then deployed to ‘lean out’ parts of the organization to get the fastest cost reductions. The impacted areas are the focus of intense blitzes using a lean toolkit, often with little involvement or understanding of the people in the designated area, which leads to superficial improvements that cannot be sustained over any period of time.
Barrier 2: Underlying View that
Sees Organizations as Machines
The pervasive view of lean as nothing more than a toolkit for delivering slash-and-burn results is driven by a unique view of how the world actually works. We call this type of world view “machine thinking.”
It’s characterized by strongly held beliefs that the world is a rather simple place, with linear cause and effect relationships. The environment can and must be controlled and all changes need to be buffered from the organization as a whole. People are seen as simply extensions of the machines that operate on a daily basis and that they’re nothing more than interchangeable parts of the larger system. We can control them by using a supervisor to reward and punish based on performance that is measured against metrics set by staff experts. In this world, it is critical that we maintain a firm grasp on the organization through autocratic methods and focus only on delivering bottom-line results regardless of the means used to achieve them. This management style creates a risk-averse culture where the mantra ‘if it ain’t broke, don’t touch it’ rules the day and any and all changes to the organization are managed by the team of staff experts.
The opposite of this “machine thinking” is best described by the phrase “systems thinking.” It’s important to note that while quality guru W. Edwards Deming is credited with the widespread adoption of statistical quality control tools, a closer inspection of his work reveals that he was really advocating adopting a systems-thinking approach. This way of thinking sees the world as sets of interdependent and interactive systems. The environment is in a constant state of change that needs to be embraced and the organization must have the flexibility to respond to changes as they occur. The people within this organization are viewed as the only appreciating asset within the company and their job is to continue to think creatively to improve themselves and their work. Internal self-regulating subsystems are the method of control in this environment and the management style is participative and collaborative. Society in general, and people in particular, are also critical areas of focus for the organization beyond the simple bottom line metrics. Controlled risk-taking is encouraged as the most effective learning comes through experimentation and changes to work processes are managed at the work-group level.
Barrier 3: Fundamental Misunderstanding
of What it Takes to Learn and Improve
Deeper study of the machine-thinking paradigm reveals that it makes it impossible to understand the value of people, much less appreciate what is required for them to learn and grow. Absent also is an awareness of how to provide the motivation and the commensurate creativity that is demanded in a continuous-improvement environment.
Any undertaking to develop people is most often superficial and follows a generic path that is suited neither to the person’s needs nor the organization’s. Training happens mainly in the classroom and lean and Six Sigma training leads to formal certification with limited directed experience. A developmental assignment is nothing more than a brief and basic exposure to a new department or function where the learning is not deep enough to be of benefit. The person is looking forward to their next developmental assignment since they now have gotten their ‘ticket punched.’ Imagine if you will that we tried to train doctors, scientists, fine musicians, or professional athletes in this manner. Without a strong coach and deep practice, what skills could ever be truly mastered, even at a basic level?
It should be obvious how the differences between machine thinking and systems thinking drive the very way we think about process improvements in particular and learning in general. The approach to process improvement at Toyota follows the model of Plan-Do-Check-Act as taught by Deming. Even this deep model of organizational learning gets distorted by machine thinking.
With machine thinking, we seek above all else to control our environment by solving problems and implementing ‘solutions’ created by experts who use a vast array of statistical tools to confirm a hypothesis. With this confirmation complete, we then standardize the process and replicate the solution far and wide. The world is simply a complex machine and we need to be able to identify the right levers to pull to achieve our desired outcomes.
With systems thinking, we are focused on learning by trying, with the goals of improving processes and concurrently developing the people directly involved in the process. These teams are supported by experts when needed and develop and implement countermeasures after building a deep understanding of the problem and gaining consensus with the affected groups. Through the implementation of countermeasures we can reflect on what happened to identify areas for further opportunity. The world we live in is dynamic and uncertain. Today’s countermeasures may become obsolete as soon as the environment around us changes—as it inevitably will. We will standardize what worked well and share the learning gained through the process. Without this focus on the PDCA cycle, continuous improvement and lean could not exist.
Barrier 4: Misunderstanding of the Purpose of Lean Tools
Machine thinking brings us to the obvious conclusion that we can leverage lean as a collection of tools to allow us to achieve certain results depending on which tool we have pulled from the toolkit. A companion toolkit to lean is that of Six Sigma. If we are able to take advantage of both toolkits we can get the benefits of lean time reduction (lean) and we can reduce the variation in our system (Six Sigma).
This common misunderstanding also gives us a superficial understanding of the different aspects of lean. Machine thinking sees flow simply as the most efficient way to produce a product or service. Pull systems are developed and introduced to reduce inventory, which will give us a benefit in operating cash flow. We strive for a leveled schedule (heijunka) because the unevenness drives higher levels of inventory and waste throughout our systems. The concept of Jidoka (stopping when there is a problem) is simply a way to keep defects from reaching our customer while standards reflect the most efficient way to perform our tasks. Visual management is implemented so everyone can know the status of an area simply by looking and we can leverage technology, often unproven, to engineer out problems in our systems.
These views, while common, completely miss the point of lean: surfacing of problems. Flow is implemented to immediately surface problems. Pull systems and level schedules are introduced to do the exact same thing. Stopping immediately when there is a problem allows us the best chance of truly solving our quality problems. Standards exist to give us a basis of comparison with the current and the desired state so problems are visible. Visual controls are instituted to clearly define the standards so abnormalities are obvious.
The Answer: See Lean as a System
Linking Business Strategy
to Personal Accountability
When we treat lean as a procession of projects that are completed by experts with marginal support from the team we find that, without fail, the improvements are superficial and transitory, with backsliding to the original performance levels once the expert moves on to the next project. We describe this phenomenon as “organizational entropy;” a process that yields only temporary gains that are quickly surrendered and results in a dead end as the affected areas are still working using their existing experience and know-how.
When we look at lean as a system in totality where people responsible for the work are also responsible for improving the work we begin to gain a deeper understanding of what it takes to build a culture of continuous improvement. A lean system not only utilizes the well-known tools, it also is designed to surface problems and has mechanisms in place to collect all of the problems and filter them against the needs of the business. These prioritized problems are then solved one-by-one to both yield process improvements and to further develop the work teams. Learning and improvements can only happen through structured problem solving with a strong, experienced coach.
It is in this systems concept that we find the most confusion amongst the leadership teams that we work with. It is much easier for people to think about running a business and achieving targets by efficiently managing a ‘project deck’ and the resources available to them. The evil Gemini of control and ROI keep most people we encounter from truly seeing what it takes to build a lean system as a way to run the business.
While we have described some of the traps and pitfalls organizations encounter when attempting to transform to a lean organization with a culture of continuous improvement, we are not without hope. We have seen progress in a myriad of businesses and environments. Some of the key factors that make these successful cases work have been:
- A strong, committed leadership team that believes the teacher/coach model of people development is mandatory;
- An admission that problems, while painful in the short term, are learning opportunities and are valuable to the company;
- Seeing lean as an integrated system and not simply a collection of clever tools;
- Recognizing process improvements can only be sustained by raising the level of development of the teams that are using the process;
- A long-term commitment to learning and development to provide the basis for a continuous-improvement culture;
- People spending enough time in an area of specialty to develop deep functional knowledge and expertise; and
- Lean coaches who are respected teachers and not simply another ‘pair of hands’ whose job is to solve your problems.
At the end of the day, lean is neither something you can contract out or delegate downward. Leaders must take responsibility and lead. The best companies realize the value of a strong, intentional culture of continuous improvement and find ways to build a deep bench of leaders who in succession maintain and improve the culture. ME
This article was first published in the November 2012 edition of Manufacturing Engineering magazine. Click here for PDF.