The Toyota Path to Competitiveness

May 8, 2012

Principle 14 of the Toyota Way states: Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen).

How much do you reflect as an individual? How about as an organization?

Time for reflection is definitely scarce in most organizations. In his book The Way We're Working Isn't Working, Tony Schwartz quotes Harvard psychologists Robert Kegan and Lisa Lahey, who observe that, “We are already the most overinformed, underreflective people in the history of civilization.” Schwartz argues that, “The relentless urgency that characterizes most corporate cultures undermines creativity, quality, engagement, thoughtful deliberation, and, ultimately, performance.”

He’s right. These days we’re continually pressed for time, with little to no time remaining to reflect. We’re doing more with less – and this at times this means more than just doing more with less people, it means that we’re doing more with less thinking about what we're doing now, let alone reflecting on what has already transpired or how we could approach what we're about to do differently. As the Toyota Way articulates, reflection is a key aspect of become a learning organization. The lack thereof will impact us individually as well as challenge the long-term viability of our company.

Agile development, with its philosophy of sustainable development coupled with time baked in for conducting a retrospective (a la Scrum), promotes reflection and improvement. However it’s important for people to understand that this isn’t simply a meeting that should be held because the Scrum Guide tells you to do it, nor should you confine yourself to looking through the lens of what you do today.

What we really want to do is to change our current thinking and develop new behavior patterns and approaches to our work. Retrospectives are a first step in engaging everyone in developing a deeper understanding of the customer and the work processes that are (or should be) designed to deliver value to the customer.

From a leadership standpoint, it is important to understand that the goal is to go beyond improving the work system; we want to improve our people. Mike Rother in his book, Toyota Kata notes that, “The primary task of Toyota’s managers and leaders is not to focus exclusively on improvement, but on increasing the improvement capability of people.”

As part of this, Rother points out that improving “puts considerable emphasis on how people tackle the details of a process, which is what generates the outcomes.” Toyota lives and breathes continuous improvement, training its people in using a PDCA, or plan-do-check-adjust (or act), approach to create those desirable outcomes.

Toyota also extends this continuous improvement mindset in its competitive approach to the marketplace. Toyota doesn’t disregard a promising opportunity because it doesn’t pass an initial cost-benefit analysis. Instead, management views the problem as one of nurturing that opportunity into profitability by “…getting people to work systematically and creatively at the detail level to do what is necessary to achieve ambitious target conditions.”

The message here is simple: numerical targets exist within Toyota, but they are used to define target conditions and not as targets in and of themselves. Learning organizations grow their people and organizational understanding in order to reach new targets that were formerly out of reach.

Mike Rother sums this up nicely in the Toyota Kata: “As far back as 1992, I learned from President Fujio Cho and members of his management team at Georgetown that Toyota steadfastly believes that organizational routines for improvement and adaptation, not quantitative/financial targets, define the pathway to competitive advantage and long-term organizational survival.”