Toyota Kata : Managing People for Improvement, Adaptiveness and Superior Results Read online

  That is about to change.

  In the ongoing effort to understand and describe what Toyota is doing, most books provide lists of the organization’s practices or principles. The individual points may all be correct, yet making lists circumvents explaining how Toyota manages people, and as our now 20 years of unsuccessfully trying emulate Toyota’s success shows, such lists are not actionable. This is because an organization’s collection of practices and principles at any point in time is an outcome that springs from its members’ routines of thinking and behavior. Any organization’s competitiveness, ability to adapt, and culture arise from the routines and habits by which the people in the organization conduct themselves every day. It is an issue of human behavior.

  The evidence of the last 20 years indicates that trying to copy or reproduce another company’s tools, techniques, or principles does little to change an organization’s culture, its way of doing things. For example, how do you get people to actually live principles? On the other hand, focusing on developing daily behavior patterns is a leverage point because, as the field of psychology shows us, with practice, behavior patterns are changeable, learnable, and reproducible.

  What has been missing, and the gap that Toyota Kata fills, is a look inside the engine room, that is, a clear explanation of daily behavior patterns at Toyota and how they are taught. By describing these underlying thinking and behavior routines, Toyota Kata establishes the context within which the Toyota practices previously observed and written about are developed and function. This gives us new power.

  This book describes two particular behavior routines, habits or patterns of thinking and conducting oneself, that are practiced over and over every day at Toyota. In Japan such routines are called kata. These behavior patterns are not visible, are not described in Toyota documents, and it takes a long time to recognize them. Yet they are how Toyota leads and manages its people. These two kata are taught to all Toyota employees and are a big part of what propels that company as an adaptive and continuously improving organization. If you want to understand Toyota and emulate its success, then these kata, more than the company’s techniques or principles, are what you should be studying. Toward that end, they are presented here for you.

  Toyota’s intention in using these kata is different enough from our management style that, from the perspective of our way of doing things, we do not immediately understand or see it. However, I think we are now close to a eureka or “lightbulb” moment, a different way of viewing, interpreting, and understanding what Toyota is doing. Once we understand how Toyota uses the two kata described in this book, there can be a shift in our perception that will enable us to progress further, because once we recognize the underlying pattern in how something works, the subject becomes easier to grasp. “The penny finally dropped and now I understand it.” The kata presented here cannot be explained in just one chapter, but the penny eventually drops, and once you get it they are not so difficult to comprehend. This makes sense too, since Toyota would like everyone in the organization to practice and utilize them.

  This Book Will Help You Get It

  The new information that is presented here does not supplant what has already been written about Toyota, although it will require some adjustment in how we have thus far approached adopting “lean manufacturing.” The objective is that you will gain a much more useful understanding of how Toyota manages to achieve continuous improvement and adaptiveness, which will tell you a lot about Toyota as a whole, and a clearer view of what it will take to develop such behavior patterns in a non-Toyota organization. To do that, we’ll tackle two overarching questions:

  What are the unseen managerial routines and thinking that lie behind Toyota’s success with continuous improvement and adaptation?

  How can other companies develop similar routines and thinking in their organizations?

  This book presents behavior patterns at Toyota at a level where we are talking about psychology in organizations rather than just Toyota. Although the behavior routines presented here were discovered through research in production settings, they are universal and applicable in many different organizations, old or new, manufacturing or otherwise, from top to bottom. This is about a different and more effective way of managing people.

  How I Learned

  I have never been a Toyota employee and I have not worked in a Toyota facility. In retrospect this handicap turned out to be an advantage for two reasons:

  I had to figure things out myself by trying them, by experimenting, in real factory and managerial settings.

  After numerous iterations of experimentation I began to notice patterns of thinking and behavior that are different from our prevailing managerial routines. These are the differences that Toyota insiders tend to overlook because they lack points of comparison, and that Toyota visitors, observers, benchmarkers, and interviewers will not see at the surface.

  Most of the findings in this book are based on hands-on experimentation and firsthand observation working with a great many organizations. This iterative “test it yourself” approach takes a lot of time but provides considerably deeper understanding and insight than can be gained through benchmarking or interviewing alone. The lessons here come from several years of:

  Applying certain technical and managerial Toyota practices in non-Toyota factory settings. This involved iterative trials, with particular attention paid to what did not work as intended, investigating why, adjusting accordingly, and trying again. This experimentation approach is referred to as Plan-Do-Check-Act (PDCA).

  Periodically visiting Toyota group sites and suppliers, and meeting with a variety of Toyota employees and former employees, in order to make observations and discuss recent findings.

  The work involved a regular interplay between these two aspects of the research, with one potentially influencing the direction of the other as I went back and forth between them. To facilitate and support this reciprocation, I maintain and regularly update a written document, to reflect on what is being learned and what the next questions are. This document not only captures learning, it also ensures that communication is focused on facts and data as much as possible. You are, essentially, holding the current, civilian version (as of this writing) of that document in your hands. This is how I have been distilling out fundamental but not immediately visible aspects of Toyota’s approach, what is behind the curtain, so to speak.

  Note that Toyota does not utilize some of the terminology that is introduced here. To help us understand the way that Toyota people think and operate, I had to create some new terms. A Toyota employee may respond to a particular terminology with, “I don’t know what that is,” but they will work and behave as described here.

  The five parts of this book mirror how the research unfolded.

  Part I sets the challenge of long-term organizational survival.

  In Part II we use that lens to examine how we are currently managing our organizations. This is important as preparation, because to comprehend what is different about Toyota’s thinking and behavior routines, we first have to understand our own.

  This then leads to the next question: How should people in an organization act so that it will thrive long term? A big part of Toyota’s answer to that question is what I call the “improvement kata,” which is examined in detail and is the heart of the book. The penny should drop for you in Part III.

  But the improvement kata does not come to life in an organization simply because it is a good idea. The next logical question was: How does Toyota teach people improvement kata behavior? The answer is what I call Toyota’s “coaching kata,” which is described in Part IV.

  Finally, after presenting these two Toyota kata the question becomes: How do we develop improvement kata behavior in non-Toyota organizations? That is the subject of Part V, how other companies can develop their own kata to suit their own organizations, and of most of my current research.

  The research cycle never ends, of course, which means this book ref
lects a level of understanding at a point in time. There is more to learn and there are undoubtedly some mistakes here. It is an interim report, as is any book, because nothing is the last word.

  A final comment: The way of thinking and acting described here has a potential beyond the business world. It shows us a scientifically systematic and constructive way of dealing with problems, uncertainty, and change, in other words, how we can work together and achieve beyond what we can see. The more I studied Toyota, the more I became intrigued by the broader possibility of such life lessons, and I invite you to think about them too as you go through this book.

  M.R.

  Spring 2009

  Ann Arbor, USA/Cologne, Germany

  TOYOTA KATA

  Part I The Situation

  Chapter 1

  What Defines a Company That Thrives Long Term?

  The applause dies down as the next conference speaker approaches the podium. The presentation is going to be about Toyota, and in his first slide the speaker presents some impressive statistics that demonstrate Toyota’s superior performance.

  The audience is nodding appreciatively.

  For about two decades now this scene has been repeated countless times. So many books, articles, presentations, seminars, and workshops have begun with statistics about Toyota just like these:

  Toyota has shown sales growth for over 40 years, at the same time that U.S automakers’ sales reached a plateau or decreased.

  Toyota’s profit exceeds that of other automakers.

  Toyota’s market capitalization has for years exceeded that of GM, Ford, and Chrysler; and in recent years exceeded that of all three combined.

  In sales rank, Toyota has become the world leader and risen to the number two position in the United States.

  Of course, such statistics are interesting and useful in only one respect: they tell us that something different is happening at Toyota. The question then becomes: What is it?

  How have we been doing at answering that second question? Not so well, it seems. Books and articles about Toyota-style practices started appearing in the mid 1980s. Learning from such writings, manufacturers have certainly made many improvements in quality and productivity. There is no question that our factories are better than they were 20 years ago. But after 15 to 20 years of trying to copy Toyota, we are unable to find any company outside of the Toyota group of companies that has been able to keep adapting and improving its quality and cost competitiveness as systematically, as effectively, and as continuously as Toyota. That is an interesting statistic too, and it represents a consensus among both Toyota insiders and Toyota observers.

  Looking back, we naturally put Toyota’s visible tools in focus first. That is where we started—the “door” through which we entered the Toyota topic. It was a step in the learning process (which will also, of course, continue after this book). Since then I went back to the research lab—several factories—to experiment further, and present what I learned in this book. The visible elements, tools, techniques, and even the principles of Toyota’s production system have been benchmarked and described many times in great detail. But just copying these visible elements does not seem to work. Why? What is missing? Let’s go into it.

  We Have Been Trying to Copy the Wrong Things

  What we have been doing is observing Toyota’s current visible practices, classifying them into lists of elements and principles and then trying to adopt them. This is reverse engineering— taking an object apart to see how it works in order to replicate it—and it is not working so well. Here are three reasons.

  1. Critical Aspects of Toyota Are Not Visible

  Toyota’s tools and techniques, the things you see, are built upon invisible routines of thinking and acting (Figure 1-1), particularly in management, that differ significantly from those found in most companies. We have been trying to add Toyota Production System practices and principles on top of our existing management thinking and practice without adjusting that approach. Toyota’s techniques will not work properly, will not generate continuous improvement and adaptation, without Toyota’s underlying logic, which lies beyond our view.

  Figure 1-1. Toyota’s visible tools and techniques are built upon invisible management thinking and routines

  Interestingly, Toyota people themselves have had difficulty articulating and explaining to us their unique thinking and routines. In hindsight this seems to be because these are the customary, pervasive way of operating there, and many Toyota people—who are traditionally promoted from within—have few points of comparison. For example, if I ask you what you did today, you would tell me many things, but you would probably not mention “breathing.” As a consequence, we cannot interview people at Toyota and expect to gain, from that alone, the deeper understanding we seek.

  2. Reverse Engineering Does Not Make an Organization Adaptive and Continuously Improving

  Toyota opens its factory doors to us again and again, but I imagine Toyota’s leaders may also be shaking their heads and thinking, “Sure, come have a look. But why are you so interested in the solutions we develop for our specific problems? Why do you never study how we go about developing those solutions?” Since the future lies beyond what we can see, the solutions we employ today may not continue to be effective. The competitive advantage of an organization lies not so much in the solutions themselves—whether lean techniques, today’s profitable product, or any other—but in the ability of the organization to understand conditions and create fitting, smart solutions.

  Focusing on solutions does not make an organization adaptive. For example, several years ago a friend of mine visited a Toyota factory in Japan and observed that parts were presented to production-line operators in “flow racks.” Wherever possible the different part configurations for different vehicle types were all in the flow racks. This way an operator could simply pick the appropriate part to fit the particular vehicle passing down the assembly line in front of him or her, which allows mixed-model assembly without the necessity of changing parts in the racks. Many of us have been copying this idea for several years now.

  When my friend recently returned to the same factory, he found that many of the flow racks along that Toyota assembly line were gone and had been replaced with a different approach. Many of the parts for a vehicle are now put into a “kit” that travels along with the vehicle as it moves down the assembly line. When the vehicle is in an operator’s workstation, the operator only sees those parts, and she always reaches to the same position to get the part.

  My friend was a little upset and asked his Toyota hosts, “So tell me, what is the right approach? Which is better, flow racks or kitting?” The Toyota hosts did not understand his question, and their response was, “When you were in our factory a few years ago we produced four different models on this assembly line. Today we produce eight different models on the same line, and keeping all those different part variations in the flow racks was no longer workable. Besides, we try to keep moving closer to a one-by-one flow. Whenever you visit us, you are simply looking at a solution we developed for a particular situation at a particular point in time.”

  As we conducted benchmarking studies and tried to explain the reasons for the manufacturing performance gap between Toyota and other automobile companies, we saw at Toyota the now familiar “lean” techniques such as kanban, cellular manufacturing, short changeovers, andon lights, and so on. Many concluded—and I initially did too— that these new production techniques and the fact that Western industry was still relying on old techniques were the primary reasons for Toyota’s superior performance.

  However, inferring that there has been a technological inflection point is a kind of “benchmarking trap,” which arises because benchmarking studies are done at a point in time. Our benchmarking did not scrutinize Toyota’s admittedly less visible inner workings, nor the long and gradual slope of its productivity improvement over the prior decades. As a result, those studies did not establish cause and effect. The key
point was not the new production techniques themselves, but rather that Toyota changes over time, that it develops new production techniques while many other manufacturers do not. As Michael Cusumano showed in his 1985 book, The Japanese Automobile Industry, Toyota’s assembly plant productivity had already begun to inch ahead of U.S. vehicle assembly plant productivity as far back as the early 1960s! And it kept growing.

  A deeper look inside Toyota did not take place until Steven Spear conducted research at Toyota for his Harvard Business School doctoral dissertation, which was published in 1999. It describes how Toyota’s superior results spring more from routines of continuous improvement via experimentation than from the tools and practices that benchmarkers had seen. Spear pointed out that many of those tools and practices are, in fact, countermeasures developed out of Toyota’s continuous improvement routines, which was one of the impulses for the research that led to this book.

  3. Trying to Reverse Engineer Puts Us in an Implementing Mode

  Implementing is a word we often use in a positive sense, but—believe it or not—having an implementation orientation actually impedes our organization’s progress and the development of people’s capabilities. We will not be successful in the Toyota style until we adopt more of a do-it-yourself problem-solving mode. Let me use an example to explain what I mean by an implementation versus a problem-solving mode.