Take a look at the Toyota Way for your Organization

Can The Toyota Way Become Your Way?

by Charles Waldo

Does the name “Dr. Jeffrey K. Liker” ring a bell with you? Probably not. How about “Toyota Motors?” Just about everyone knows that name and you could be one of the millions of consumers driving one of its brands (Prius, Camry, Lexus, and so on).

The Toyota WayDr. Liker’s “claim to fame” is as one of the world’s foremost researchers, writers, and consultants on The Toyota Way-- the philosophies, culture, and practices that have led Toyota to its position as a premier, mass automobile designer, producer, and seller. In 1982 Dr. Liker joined the University of Michigan’s business school as a junior professor, just when the U.S. automobile industry was in serious turmoil in the midst of a national recession. U.S. automakers pointed their fingers at “Japan, Inc.” as a major cause of their troubles. Dr. Liker was invited to join a team of UM profs beginning to study the relationship between Japanese car makers’ very high quality, especially at Toyota and Honda, and their sales successes. He has been at it ever since, authoring or co-authoring eight books on how – and why – Toyota does things, beginning with The Toyota Way: 14 Management Principles From The World’s Greatest Manufacturer, published in 2004, which is what this article briefly looks at.

“But, whoa,” you might say. “My organization is not a manufacturer, we don’t do automobiles or auto parts, we’re less than twenty-five employees, and we’re certainly not Japanese.

We’re not anything at all like Toyota. Why should I spend time on this article, much less on the full book?”

Valid questions. But the truth is The Toyota Way can be universally applied since it deals with universal principles of human and organizational life. Many organizations, just as varied as yours, have already done just that. These are management “best practices,” period. They can help make any organization better.


What is The Toyota Way?

Briefly, The Toyota Way is an integrated business system that has high respect for people; focuses on eliminating waste in time, materials, and processes; builds quality into its products and workplace systems; uses only proven technologies; and constantly seeks improvement throughout the organization.

The following, highly abbreviated “14 Management Principles” provide an overview of The Toyota Way. I have a hunch you will spot at least one Principle that, if applied correctly, can help improve you and/or your organization in a short time. And isn’t improvement the name of the game?

To get a fuller understanding of that Principle (and the other thirteen), get a copy of the book, dig into it, perhaps start a voluntary “reading circle” of interested employees, and explore ways to test and apply it. Take your time but keep at it.

Then tackle another Principle and see where that takes you. One step at a time.

“Principle 1: Base all your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Work, grow, and align the whole organization toward a common purpose that is bigger than making money. Generate value for the customer, society, and the economy – it is your starting point. Evaluate every function in the organization in terms of its ability to produce Value.

Principle 2: Create continuous “process flow” to bring problems to the surface. Create “flow” to move material and information fast. Strive to cut back to zero the amount of time that any work project is waiting for someone to work on it. “Flow” is the key to a true, continuous improvement process and to developing people.

Principle 3: Use “pull” systems to avoid overproduction and extra inventory. Minimize work in process and warehousing of inventory by stocking only small amounts of each product and frequently restocking based on actual customer usage.

Principle 4: Level out the workload of all processes as an alternative to the stop/start approach of working on projects in batches that is typical of most companies. Eliminate overburden and unevenness to people and equipment.

Principle 5: Build a culture of stopping to fix problems, to get quality right the first time, and enhance productivity over the long haul. Quality for the customer (internal or external) drives your value proposition. Build in support systems to quickly solve problems and put countermeasures in place.

Principle 6: Standardizing tasks is the foundation for continuous improvement and employee empowerment. Use stable, repeatable methods everywhere to maintain the predictability, regular timing, and regular output of your processes. Standardization is the foundation of “flow and pull.”

Principle 7: Use visual controls so no problems are hidden. Use simple visual indicators at worksites to help employees determine immediately whether they are in a standard condition or deviating from it. Correct deviations at once.

Principle 8: Use only reliable, thoroughly tested technology. Conduct many tests under simulated actual conditions before changing processes or adopting new technologies. Train on usage before putting into operation.

Principle 9: Rather than “buy” personnel from the outside, grow your own leaders who thoroughly understand the work in great detail, live the philosophy, and teach it to others. Leaders at all levels must be great role models.

Principle 10: Develop exceptional people and teams who follow your organization’s philosophy. Train, train, train in classrooms but mainly on the job. Use both departmental and cross-functional teams to tackle more complex problems.

Principle 11: Respect your extended network of suppliers, customers, and advisors (your partners) by challenging them to improve. Then help them.

Principle 12: Go see for yourself to thoroughly understand a problem situation. Think and make decisions based on personally verified data. Even high level executives and managers should go see problems for themselves, thus avoiding superficial understandings.

Principle 13: Make decisions slowly by consensus, thoroughly considering all options; implement rapidly. Keep an open mind and do not necessarily revert to the
“tried and true.” Try to get input from all those who will be affected before the decision is made. Listen carefully to all ideas.

Principle 14: Become a learning organization through relentless reflection and continuous improvement (kaizen). Protect the organizational knowledge and culture bases by developing stable personnel, promoting slowly, and using careful succession systems. Standardize best practices rather than re-inventing the wheel with each new project or manager. Thoroughly review/evaluate/reflect in detail how a project went and institute changes that can improve things even more the next time.”

Winding Up

Did you find at least one Principle worthy of further exploration and consideration for possible application? I certainly hope so. I’d be interested in hearing from you as you begin your journey on The Toyota Way. As always, good luck.