The Toyota Way— A Top of the Page Review
January 2023
I have a confession…even though I am an operations person, I avoided the Toyota Way for a long time because I (unfairly, as it turns out) associated it with the bastardized version of Lean, or just in time, production that is so common among start-ups here in the United States. This book calls out those companies that pride themselves on Lean but only focus on process — not philosophy, people, or problem solving.
Lean is culture, not a technique. Moreover, it is a culture that values people above all else and prioritizes long term thinking over short term gain. And that is a system I can be all-in for.
Liker, Jeffrey K. 2004. Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. New York: McGraw Hill
Quick Summary
The Toyota Way is an in-depth presentation of the management philosophy underpinning the Toyota Production System. As one of the most successful and recognizable brands in the world, Toyota is credited with creating the Lean paradigm. To truly appreciate and employ Lean production, the author argues we must look beyond the tools and techniques that Toyota employs to understand the interlocking principles that guide the company in every interaction and every process.
Toyota’s operations are constrained by two pillars which guide all decision making — continuous improvement and respect for people. The author divides Toyota’s fourteen management principles into four sections. As I read through the book, these sections seemed to represent the company’s operational perimeters, or priorities. Rather than diving into each of these fourteen principles, I will simply summarize the four priorities.
- Philosophy — Long term thinking is a key differentiator from their competitors. The company exists to bring value to customers and society, even at the cost of short term financial goals. Doing what is right for the long term benefit of the company, their customers, and the communities they operate in outweighs hitting numbers for the quarter.
- Process — Toyota is famous for it’s obsession with eliminating waste. But eliminating waste is not the goal. Improving the quality of work and the experience of doing that work is the goal. Standardizing work and work flows supports people inside and outside of the company. The right processes lead to the desired outcomes. Everything else is waste.
- People (and Partners) — Toyota sells cars, but their real business is people. Growing people is what matters. Those who work in the business and those who do business with them (partners) are to be respected and challenged so that they grow.
- Problem solving — Learning is critical to the Toyota Way. Effective problem solving means resolving root causes, not treating symptoms. Finding root causes requires analysis, reflection, and communication. These activities are built into and protected by the operational system.
Key Takeaways
Quality Assurance
Toyota has long had a reputation for quality. This book argues that their reputation is the result of operational excellence. Many of principles in the book center quality within the operational system and the day to day processes within Toyota. Gemba walks hold managers responsible for observing and improving. Line workers check and confirm quality and own responsibility for shutting down the line when they find errors. Processes are designed to bring problems to the surface quickly so they can be remedied with urgency.
For years, I have distinguished between quality control and quality assurance. Quality control is a final check on the end product before it leaves the production team’s control. Quality assurance is a system of controls that reduce errors and consistently confirm pre-production planning and production itself are meeting expectations. Immature organizations rely on quality control resulting in high costs to repair their products and their reputations. Mature organizations value quality assurance, recognizing that slowing down to get it right the first time produces steady growth that keep costs in check and produce value for everyone engaged with the organization — internally and externally.
Leadership
This book makes clear that people are at the center of Toyota’s philosophy. Although the author doesn’t spend much of the book fleshing out leadership, much is implied about what leadership should look like. Allow me to present some ideas inspired by the stories in the book.
Every leader has the responsibility to “think and speak” (aka understand and decide) based on information or data they have verified. The best verification is what the leader can see and confirm for themselves. When leaders rely entirely on the observations of others, things go sideways. Gaps in reporting can be innocent matters of oversight or misaligned priorities or they can represent toxicity in which problems are intentionally hidden or facts are purposefully skewed.
In my opinion reliance on unverified data is what drives most of the worst micromanagement in business settings. Micromanagement kills morale because it resides on the twin points of self imposed isolation and uninformed judgement. Self imposed isolation refers to the unproductive habit that many executives have in believing that they are too important to be directly involved in the work of their company. As a result, they do not understand the experiences, constraints, or value of the activities being done. Because they don’t understand, they delegate but do not trust. They command, but do not lead. They pontificate, but do not strategize. They shirk responsibility for thinking through what their decisions mean, in practical terms, leading to uninformed judgements about what can be or should be done, how, and with what outcomes. Micromanagers demand to be informed and punish failure, rather than sharing experience, stimulating thinking, and facilitating valuable bidirectional insight.
Leadership requires getting one’s hands dirty. Throughout this book are stories of company leaders at various levels jumping into the work to truly understand it. The concept of Gemba only works when leaders are willing and able to put themselves in the shoes of those doing the work. Leaders have a moral obligation to value those who do the work for them. They have responsibilities to their community and society to understand the work that they create and its impact on others.
Process Improvement
When improving processes, it is worth bearing in mind the old adage that the whole is greater than its parts. It is critical to see the system as a whole. Process often turns on the intersection of purpose and procedure. When process improvement initiatives fail, it is often because this intersection did not align.
An overarching theme within this book is that nuance matters. People need to know not only what they are to do and why, they also need to know how the pieces are intended to fit together. They need more than the bite size, headline version that is blasted out in a launch celebration along with a catered lunch. They need the fully nuanced version that displays how the sum is greater than each of the parts.
By aligning purpose and procedure, the system gains exponential productivity. When people understand the nuance in what they do and why, they are empowered to learn and improve what they do it and how they do it. Continual improvement only happens when people can see the whole system and their role in it.
Memorable Quotes
1️⃣
In the Toyota Way, it’s the people who bring the system to life: working, communicating, resolving issues, and growing together…But the Toyota Way goes well beyond this; it encourages, supports, and in fact demands employee involvement…The Toyota Way means more dependence on people, not less.
2️⃣
As managers, we must take the responsibility for developing and nurturing mutual trust and understanding among all team members…[M}anagement has no more critical role than to motivate and engage large numbers of people to work together toward a common goal. Defining and explaining what the goal is, sharing a path to achieving it, motivating people to take the journey with you, and assisting them by removing obstacles — those are management’s reasons for being.
3️⃣
[T]ools and techniques are no secret weapon for transforming a business…[Success] at implementing these tools stems from a deeper business philosophy based on its understanding of people and human motivation.
Final Thoughts
Over and over, this book returns to the centrality of people to the Toyota Way. Businesses that adapt Lean at the cost of the people inside and outside of the company are missing the point. Toyota is more reliant on people, not less, as a result of their Lean thinking. This is an excellent case study for keeping people at the heart of your thinking if you want to create a strong company with a strong reputation for quality.
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Thanks for reading! I am a self professed nerd who loves reading and learning. To me every book is a conversation. By the end of the conversation, I always have new ideas that I want to try. What are you reading?
