Toyota Way to Lean leadership

Agenda
History and Background of Toyota and I
TPS, The Toyota Way and Driving toward a Vision
How do you Drive to the Vision?
How do you Develop People with the Skills and Motivation Aligned toward the Vision?

History and Background of Toyota and I
Master-Apprentice Craft Model
Striving for Perfection

How I got here
Boris and Lucy Liekara born in Kiev to a wealthy family
Bolshivaks took their money… but some was hidden
1919-money used to smuggle out Boris and Lucy
Lucy, pregnant with my dad, was accepted in the U.S.—she was a nurse (U.S. wrote down name “Liker”)
Boris, a barber, had to go on to Cuba
Lucy put my dad in foster care and went to Cuba
All were reunited, struggled through the Great Depression in NYC, where my father met my mother, and all lived happily ever after.

What allowed this success story to happen?
Vision of a better future
Planning
Family members sacrificing for the family
Incredible focus
Aligned interests
Determination and toughness
Adaptive Problem solving
… Same characteristics made Toyota a great company!

The Vision and Company Value of Toyota Started with its Founders
“King of Inventors” in Japan inventing new kinds of looms
(contribute to society, customer first/company second, respect for people, know your business, get your hands dirty, hard work, discipline, teamwork, and always innovation)
Favorite Book: Samual Smiles,Self-Help
Sakichi Toyoda

1937 - founded Toyota Motor Co.
Kiichiro Toyoda
Founder of Toyota Motors
Kiichiro Toyoda announced at the opening of a Toyota Motor Company factory: “I plan to cut down on the slack time in our work processes…. As the basic principle in realizing this, I will uphold the ‘Just in time’ approach.”
Kiichiro Toyoda: A Seminal Speech

1950’s Toyota Production System Started
2012 Still developing
Taiichi Ohno
Taicihi Ohno and his team accepted Kiichiro Toyoda’s Challenge by laboring non-stop to develop the Toyota Production System…through adaptive problem solving.
Taiichi Ohno: A Manufacturing Genius

TPS, The Toyota Way,
and Driving toward a Vision
Company Purpose
People
Lean Tools
Lean Processes
Problem
Solving

The Origin of TPS Philosophy
We protect our own castle:
* Products that consumers trust will sell
* A company should operate with no-debt
(Even a penny should not be spent if not necessary)
* Continuous cost reduction is the only way
for survival
* Meeting challenges will make us stronger (catch up to Ford in productivity)

Eventually it was Written Down:
The Toyota Production System House

“Lean” (based on TPS)
Launched a Global Movement
Do more with less
Healthy
Agile
Survivability
Adaptable
Half the Time, Labor, and Inventory
1984

Shorten the time between the customer order and the product build / shipment by eliminating sources of waste.
Lean Manufacturing
BUT IT WAS OFTEN REDUCED TO A WASTE REDUCTION TOOL KIT

The Real Genius of TPS
Tightly linked processes
Problems cannot hide
Problem!
Countermeasure!
Source: Glen Uminger, Toyota Motor Manufacturing North America

What is real TPS?
A Mindset of Continuous Improvement in all Employees
Identify problems
Identify and Test
solutions

PDCA Problem Solving is the Core of Lean Thinking

‘Get It Done’ Mentality Destroys the PDCA cycle

Avoid the number one Trap!
Jumping from “problem” to “solution” without clear understanding and analysis

So how did a university professor get obsessed with studying a single case study—Toyota?
Interest in sociotechnical systems in 1970s
Frustrated by sociotechnical systems—all social, no technical
Invited to join UM US-Japan Auto Study in 2002
Learned that Toyota was best Japanese automaker
Began building relationships—the Japanese way
Got hooked on the many lessons to learn from Toyota’s long and deep experience and wisdom

A Tale of TPS in Two Plants
Both helped by TSSC in 1990s
Plant 1: Top Leadership committed, spread across first plant, then company, leading to huge profits and growth
Plant 2: Great cell with team functioning like Toyota team members—never went beyond the one cell
Why Difference?

Why don’t more firms get to lean as a system?
View lean only as a technical “toolkit”
Focus on only short-term results
Fail to develop people
Move too fast--skim the surface
Inconsistent, weak leadership direction
Miss the philosophy!
NOTE: ALL THESE WEAKNESSES POINT TO LEADERSHIP ISSUES!

The 4 Ps of ‘The Toyota Way’

Base management decisions on a long term
philosophy, even at the expense of short term financial goals
Toyota mission:
Serve Society and Customers through exceptional quality automobiles
Contribute to the economic growth of the country and community in which it is located (external stakeholders)
Contribute to the stability and well being of team members through job security and personal development (internal stakeholders)
Contribute to the overall growth of Toyota
Philosophy

BREAK

How do you Drive to the Vision?

The Most Important People are the people that touch the product, or the customer.
The rest of us exist to set them up for success.
Invest in team members as your most valuable appreciating asset

Develop Leaders who Live the Values and Philosophy
Do not Jump Here too soon!

Leadership Self-Development Learning Cycles (PDCA)
Select for Leader-Job Fit
to advance Learning
and Growth
Gemba Immersion
to Understand Gaps
to True North Vision &
Build Relationships
Lead &
Develop Others to
Achieve Challenging
Goals
Be a Coach,
Stabilize Processes,
Reflect & Learn
Mentor Challenges
Thinking Way
Challenge
Continuous Improvement
Go and See
Teamwork
Respect for Humanity
Plan
Do
Check
Act

The Liability of Charisma--Jim Collins
Confront the Brutal Reality
“The moment a leader allows himself to become the primary reality people worry about, rather than reality being the primary reality, you have a recipe for mediocrity, or worse. This is one of the key reasons why less charismatic leaders often produce better long-term results than their more charismatic counterparts.
* From Good to Great

Results as Lean Evolves Depend on Leadership Philosophy
Total Business Results from Lean Transformation
Starting out
Maturing
Maturity in Integrating Lean and Business Strategy
I.Apply Tools
II. Management Led Lean
III. Aligned
Continuous Improvement
Without Philosophy
With Philosophy

How do you Develop People with the Skills and Motivation Aligned toward the Vision

6
Working to Achieve Standards is the foundation for continuous improvement and employee development
Coercive vs Enabling Bureaucracies-Employee Empowerment
Social Structure
Coercive
Enabling
High
Bureaucracy
Low
Bureaucracy
Technical Structure

Enabling Structure is a Balance between Mechanistic and Organic
MECHANISTIC BUREAUCRACY
Systems focus on performance standard to highlight poor performance.
Everyone follows the standards exactly: deviations punished.
Specialists plan and monitor standards.
Standards are instructions to be followed, not challenged.
ENABLING STRUCTURE
Performance standards used to identify problems for group problem solving
Standards are guidelines to be improved on.
Standards are visible and controlled by work groups.
Standards are a target to work toward through kaizen
Source: Paul Adler, USC

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Use visual control so no problems are hidden
Visual control systems are about improving value added flow
Visual controlt tells us at a glance if we are deviating from the standard.

Ideal TL:TM Ratio= 1:5
Group Leader (GL) = 1st level of management
Team Leader (TL) = Alternates working production and leadership roles.
Team Member (TL) = Production worker
TM
TM
TM
TM
TM
Team
Leader
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
TM
Notes
Toyota Work Groups
at the Heart of Continuous Improvement
Team
Leader
Team
Leader
Team
Leader
Group Leader

Continuous Improvement means a little better every day:
Visual Management Boards for Each Work Group (Toyota, Kentucky)

Visual Metrics Aligned from Top to Bottom to meet Annual Plan (Hoshin Kanri)
Hoshin
Vision
Floor Management Development System:
Trim Group 1
Main KPIs
Process
KPIs
Sub-KPIs
Safety
Quality
Productivity
Cost
HR
.
.
.
.
.
Trim Shop
Assembly Division I
Plant-Wide
Trim 1
Trim 2
Trim 3
Trim 4
Door
Trim
Chassis
Final
Stamp
Body
Paint
Assembly
.
.
.
.
.
x
x
x
x
x
.
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Problem
.
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Shop KPIs

Visualization &
Striving to Meet Aligned Standards
“Workers are far more committed and do a far better job when they understand how they can have a positive impact on the outcome.”
--Gary Convis

Comparison between MBO and Hoshin Kanri

Lean Leaders are at the gemba, Asking Questions, listening thoughtfully
Bad news first
Every concern
is legitimate
Let’s focus on facts
And figure this out
together

Chain of Modeling and Coaching, NOT Chain of Command
What Should Be?
What Is Happening?
Root Problem?
What’s the target?
What is Next Step?
Leaders at all levels practice the same basic patterns of coaching and modeling behavior to
Teach values everyday
See: Mike Rother, Toyota Kata
See Mike Rother,
Toyota Kata

Leadership takes expertise. Will any of these teachers or students become an expert in a 2-Week Training Course?
Master Chef & Students
Soccer Coach going over plays
Coaching Girl’s Basketball Team
Teaching Violin

Summary of what Lean Leaders Need to Learn
Managing from the gemba
Developing themselves
Live the core values of the philosophy (respect for people and continuous improvement)
Manage effectively from the gemba
Become a role model for discipline problem solving
Become a teacher and coach for disciplined problem solving

Western Leadership Vs. Eastern Leadership

How Culture Changes
“It’s easier to act your way to a new way of thinking
than to think your way to a new way of acting.”

Toyota Veteran’s View of Toyota’s Success
“The most important factors for success are patience, a focus on long term rather than short-term results, reinvestment in people, product, and plant, and an unforgiving commitment to quality.”
-Robert B. McCurry,
former Executive V.P., Toyota Motor Sales
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