How to Implement Lean as a Culture and Workflow

Jeffrey shares his two decades worth of insights, captured in his international bestseller ‘The Toyota Way’ and his more recent book “The Toyota Way to Lean Leadership” about how to develop leaders who live the philosophy and support continuous improvement and respect for people.

You will learn:

  • The key ingredient needed to make Lean work
  • Characteristics needed to become a great Lean leader
  • Practical frameworks for developing Lean leaders across your enterprise

I’ve trained thousands of people in the last two decades on the principles underlying the Toyota Production System and how to use these to transform your enterprise. My experience has led me to a sober conclusion. I began to realise that very few organisations have the long-term perspective and dedication to build a culture necessary to even begin to build a work culture around the full Toyota Way. In fact, many companies get stuck after improving selected processes using Lean tools and developing a small number of experts often called ‘black belts’.

Most companies get it wrong before they even begin. They approach Lean methodology with great enthusiasm for new Lean tools and quick results, followed by a concern that Lean is not naturally spreading across the organization, often decaying in islands of excellence, which causes disillusionment with the Lean programme. Then it’s on to the next fad. Curiously, in many organisations Lean would later reappear in a slightly different form, often when new executives were hired from outside. Lean may, therefore, go through various lives over five to 15 years emerging, blossoming, decaying and re-emerging in a slightly different form, and so on.

"Lean usually starts with great enthusiasm for new Lean tools and quick results, followed by concern that it’s not naturally spreading, often decaying in islands of excellence, causing disillusionment with the Lean programme."

The one thing that makes a difference—Leadership

The small percentage of cases where Lean actually catches hold as a sustainable cultural change are all differentiated by one factor: leadership. Organizations that get it right are those where a C-suite executive is passionate about Lean and is determined to make it its way of life, or where a senior executive is below the C-Suite level, say a Director of Operations, will demonstrate such outstanding results that the rest of the organisation will have to take notice. Then Lean may spread to other parts of the company in a positive way and the company may begin to resemble a Lean enterprise.

"The small percentage of cases where Lean actually catches hold as a sustainable cultural change are all differentiated by one factor: leadership"

Leaders who take the reins and turn Lean from a vague concept to a daily reality have a few characteristics in common. They all have:

  • A dissatisfaction with the state of managing and organising before Lean
  • A combination of humility and a burning desire to personally learn and grow
  • A vision of what greatness looks like in their department or business unit or enterprise
  • A belief in the power of engaged people to accomplish great things
  • A hands-on orientation, often meaning they are an expert in what they are managing
  • A passion for building something great that outlasts them as a leader.

Jim Collins has provided inspiring descriptions of these types of leaders in his books ‘Good to Great‘ or ‘Built to Last if you’re looking for a more in-depth description of the right kind of leadership to be a great company. One important thing to realize here is that leadership is more a phenomenon than a set of characteristics. It’s a way of being, inspiring others and building habits through practice, Lean habits.

Developing Lean Leaders at all Levels

I spent a great deal of time studying the leadership literature and working to shift the focus of leadership training on identifying and developing transformative Lean leaders. That led to working with Gary Convis, the former head of North American Manufacturing and Managing Officer for Toyota, on a book that became ‘The Toyota Way to Lean Leadership‘. This was then followed by a more practically-oriented book called ‘Developing Lean Leaders at all Levels‘. Both books were based on a four-stage leadership model that emerged through analyzing Gary’s growth as a leader while working for Toyota.

The starting point were the core values of ‘The Toyota Way’, based on Toyota’s internal model that made them the leaders in the discipline. They represent the ‘Toyota Way’ as a house with two pillars of continuous improvement and respect for people:

 

Toyota_house

 

The foundation of the house has five core values that we believe are crucial to leadership development. The way these are taught is by deliberated developing leaders who learn these values from a more senior leader who acts as a coach. We defined four stages of leadership development as follows:

 

Lean_graph

 


Reflect:

  • What type of leaders (values, skills, mindset) does your organization need to achieve your vision?
  • Are you consistently developing these kinds of leaders?
  • Where are you in this leadership development cycle and where do you need to go next?
  • At what level can you realistically get started in experimenting with better leadership development approaches?

 

Lesson on Leadership from Gary Convis and his leadership journey at Toyota

In Gary Convis’ case, he was hired by Toyota in 1984 as it embarked on its first venture in manufacturing in the United States. It was a joint venture between Toyota and General Motors called NUMMI (New United Motors Manufacturing, Inc) and was located in California where GM had closed down a plant. The factory was shut down because costs were high, quality was low and the workforce was very militant.

Toyota hired back over 80% of that workforce, came to a contractual agreement with the United Auto Workers union, and within its first year of operation NUMMI turned out the highest quality cars at the highest level of productivity of any plant in North America. Gary was a part of that.

Developing Gary as a leader was a major focus of Toyota and he had to start with self-development, as the drive to change had to come from Gary. He was selected because Toyota leaders saw a desire in Gary to learn and improve himself. As he was developing he was learning to coach and develop others.

When NUMMI reached a certain level of maturity after several years, workgroups throughout the operation were able to operate relatively self-sufficiently. Gary’s role shifted to supporting daily kaizen, (a systematic improvement method coined by Toyota) rather than trying to lead it himself. The final step was aligning targets for improvement from top to bottom and across departments using a Japanese management method called Hoshin Kanri.

This was possible within NUMMI with intensive support of executives, managers, and trainers sent from Japan. Every leader from Gary to the group leader on the shop-floor had one-on-one coaching every day. This is difficult and often too costly to replicate in most organizations.

Developing Lean Leaders with Kata

If we cannot simply copy Toyota’s results, and we do not have the hundreds of experienced coaches to teach our leaders day by day, what can we do? That was the question that led my former student Mike Rother to start to experiment with different methods to develop Lean leaders in organizations that lack a critical mass of executives steeped in the philosophy. This, in turn, gave rise to Toyota Kata and a structured methodology for teaching the kata, or routines, required to be a Lean leader. He borrowed the term kata from the martial arts. Kata is ways of doing things, as in, please punch out in this way. The student practices the kata over and over with feedback from the teacher until it feels natural.

Mike’s model for developing leaders starts with a focus on developing a scientific mindset. He also studied Toyota for decades and concluded the core skill required for continuous improvement was approaching a challenge with a scientific mindset. Toyota wants leaders who accept a clear and measurable challenge to make a step-function improvement in the level of performance using Kaizen to do so. They are obsessive about leaders going and seeing for themselves, directly observing the process. They are developing themselves as a learner so they can nurture teams of people and show the utmost respect for people they are mentoring to learn and accomplish great things.

To do this leaders need to learn a scientific process for improvement. Mike developed a model for doing so that he calls the improvement kata:

Kata process

The model would be very familiar to any scientist. It is how they advance knowledge. In this case, the focus is on using the scientific method to improve how we perform work. The first three stages are planning in preparation to begin executing the improvements through experimentation:

The starting point is always a big challenge, generally one to three years out, which provides the direction for improvement efforts.

Then we must understand in detail the current condition through direct observation. This must be done openly and objectively focusing on both strengths and surfacing weaknesses. The leader of this activity must be humble enough to realise that the world is complex and they must dig deep to understand the current reality.

The challenge may feel overwhelming because it is way beyond our threshold of knowledge. How can we improve so much? To make progress we must break down the challenge into manageable pieces. We do this by setting a series of short-term target conditions (2-4 weeks out) one by one. The starting point is our first ‘target condition’, which is time dated. An example of this if the challenge was to reduce defects in an entire plant by 95% could be: “Workers in this department will be using mistake proof devices and Quality defects in this department currently at 10 per 100 units will be 5 per 100 by three weeks from Tuesday.”

Executing is a process of experimentation following the Deming cycle of Plan, Do, Check, Act. We experiment because we do not know if this will work or how to accomplish it. Acceptance of uncertainty is a characteristic of the scientific mindset. We are running experiments like a scientist, except they are run on real processes, not in a laboratory. We iteratively learn from experiment after experiment until we reach our first target condition and then we assess what we have learned and define our next target condition and so on until we meet the challenge.

 

PlanDoCheckAct

 

This is called a kata because it represents a series of specific skills to develop and a way to advance them. We are developing routines or habits (kata) that, with practice, become second nature. This is how we change to a scientific mindset and start implementing Lean methodology. When we have reached a level of maturity we can learn the coaching kata which is used to develop others to follow the improvement kata.

"Practicing routines or habits (kata) daily with a coach is the way to make the scientific way of thinking natural. Lean is not a toolset, but a way of experimenting toward big challenges."

What I saw in Mike’s work was an opportunity to operationalise the leadership development model I created with Gary Convis. It was not enough to say leaders should self-develop with a coach and here is how Toyota does it. We needed a concrete methodology for those who are not living in a mature culture like that of Toyota.


The Lean approach to Leadership Development

The leadership model and Kata for developing people have led to a very different approach to Lean deployment. We are no longer deploying tools or leading individual projects. We are focusing on developing people who have the capability to accomplish great things meeting challenge after challenge that at first glance seems impossible. This is a slower process than deploying tools and the speed of progress is usually limited by the number of qualified coaches. But it will in the long term result in much greater accomplishments and sustainable improvements: the growth of progress increases exponentially as more coaches are developed and the impact multiplies exponentially across the organization.

"We are no longer deploying tools or leading individual projects. We are focusing on developing people who have the capability to accomplish great things meeting challenge after challenge that at first glance seem impossible."

This, of course, is all based on the premise that senior leaders eventually understand the philosophy and are willing to make a long-term commitment.

The question here is simple: Do you want short-term results that are impressive but not sustainable, or do you want to build a world-class enterprise? In Jim Collins’ words: Do you want to be good or great?

Join Jeffrey Liker at a Masterclass featuring Toyota tour to learn how to become a true Lean leader and achieve superior performance: 

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Books Referenced:

The Toyota Way, McGraw Hill, 2004

Toyota Kata, McGraw Hill, 2010

The Toyota Way to Lean Leadership, McGraw Hill, 2011

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