159: The Toyota Way for Achieving Operational Excellence: A Masterclass with Jeffrey Liker, Ph.D.

Transcript

In 1996, I failed an exam in one of my chemical engineering classes at Louisiana State University. I remember it as though it was yesterday. There were only two problems on the exam. The first problem involved calculating the flow of blood through an artery as a heart pumped it. I recall being baffled, panic stricken, and angry. Angry because I was an engineering student, not a medical student.

Hi, I’m Alicia Butler Pierre and I learned a lesson that day that forever changed the way I absorbed and comprehended information. You see, up to that point in my studies, I had grown accustomed to calculating the rate of a fluid flowing through pipelines, either by gravity or by a pump. Turns out the blood vessels are the pipelines, the blood is the fluid flowing through them, and the heart is the pump.

As you listen to this episode, keep this story in mind because you might be tempted to dismiss it, thinking this content simply doesn’t apply to your business. The best way to know you understand something is if you can apply its concepts to a different scenario. Dr. Dennis Kimbrough wrote, knowledge only becomes powerful if and when it is applied. This is season 13, episode 159 let’s Start the show.

Welcome to Business Infrastructure, the podcast about curing back office blues of fast growing businesses. If you’re a business owner or operator looking for practical tips and solutions to scaling your business in a sustainable manner, you’re in the right place.

Now Here’s your hostess, Alicia Butler Pierre.

Have you ever wished you had an on demand mentor that could provide advice on how to improve your customer experience and scale your business? HubSpot’s got you covered. Introducing the HubSpot Podcast Network. It’s a one stop audio destination for business professionals looking for education and inspiration on how to grow better. With access to a collection of marketing, sales, sales service and operations shows, you’ll have all the information you need as your company goes from startup to scale up and beyond. Listen, learn and grow with the HubSpot podcast [email protected] podcastnetwork having a tough time trying to explain ideas over a video conference?

Try the Think Smart Whiteboard. It’s the fastest whiteboard software in the world and allows you to upload flowcharts and write on them while colleagues are watching remotely. Call us today for a free demo. The number is 1-866-584-6804 or visit us online at getmytablet.com now that’s smart. Think smart. This is season 13 and it’s all about operational excellence, what it is and how to achieve it.

And joining us currently In New York today is Dr. Jeffrey Liker . He’s one of the world’s leading authorities on the Toyota production system for continuous improvement. You probably know it as Lean. And if his name sounds familiar, it’s for good reason.

He’s currently the president at Liker Lean Advisors and he wrote the definitive best selling book on Lean. It’s called the Toyota Way. And a second edition was released earlier this year in 2021. In fact, we’re going to talk about the Toyota Way and, and how you can leverage its 14 management principles to achieve operational excellence in your company. Dr. Liker, welcome and thank you so much for taking time away from your vacation to be here joining us. How are you?

Okay. Thanks, Alicia, for having me.

Oh, thank you so much, Dr. Liker. I was first introduced to the Toyota Way. The original, the first edition subtitle is the 14 management principles from the World’s Greatest Manufacturer. When I was, I was first introduced to that book when I was taking an advanced Lean Principles course at Purdue University. And your book was actually our textbook and I’ve held on it for dear life ever since then.

If anyone ever wants to borrow it, I just politely tell them no, because it’s one of those situations where I have so many notes and so many things highlighted throughout the book that it’s a keeper. It’s something that I definitely cherish because it was a game changer for me.

I noticed as I started reading up about your background, very interesting background. I noticed that you have a Bachelor of Science degree in Industrial engineering and a PhD in sociology. I’m curious, before you started working as a professor at the University of Michigan, did you work as a sociologist at any point?

Well, it’s not so clear what it means to work as a sociologist. Mostly what I was trained to do mostly was research. And I had done a lot of research as a graduate student, more than some students, because I never was a teaching assistant. So I was doing at least three years of solid research. And then I did a postdoc in the sociology department at Cornell University where I was doing for two years. I was doing only research in that sense.

I had quite a bit of experience at that time. I expected I would get a sociology position. I ended up getting selected to be interviewed in about eight sociology departments. Only got one offer at the very end of this long, difficult process. It was during a, in 1981, which was a type of serious recession and hard to get a job. And then at the last minute I noticed a position at University of Michigan in Industrial engineering Which seemed kind of strange to me because I never expected to even think about industrial engineering ever again. But it was a position for someone with an undergraduate engineering degree and a PhD and a social or behavioral science.

And I called them up and they were very excited because I said they’d almost given up and they didn’t think someone like me existed that fit their requirements. And within about a month, I had the job offer, and it was such a great university and pay was good and teaching assignments were good. So I took that over a sociology position.

Wow. So it sounds like you were literally the perfect fit for what they were looking for.

Yeah, I was, in the sense that on paper, I was a perfect fit and it worked out well. But what they didn’t understand was that in my research, my sociology research, none of it had anything to do with organizations manufacturing industrial stuff. I studied released prisoners and how they adjusted back to civil civilian life.

I studied the effects of the Great Depression on families. It had nothing to do with industrial engineering. They didn’t realize that because they didn’t have really any concept of what a sociologist was. They just figured, you have an industrial engineering degree. I have a sociology degree, therefore I must know a lot about social things related to industrial engineering, which was not true. It’s true now, but. So I had to, when I got there, figure out who I was and what I wanted to do with my life.

I was like, okay, I was trained to be a sociologist in certain areas. Now I’m completely outside that in an arena that I know nothing about or very little about. Now I have to kind of retool and refocus my research. And I just happened almost by chance to be asked to be part of a big study comparing the US Japan auto industries. And I. I was getting a lot of opportunities to do interesting research, and I was saying yes to all of them because I was just exploring. And that. That’s the one that ends up sticking.

Wow. So that’s how it started. You became part of this. This research team, or was it. Was it a team or was it just you?

Primarily, there were a lot of people involved. It was a huge study. And there are probably like 75 people involved from across the university, including outside consultants and researchers. So it was a huge team. Personally, I was working with one other professor who was a senior industrial engineering professor, and he didn’t know anything about social science or how to collect data or how to do interviews or how to write papers in social science, but he knew a lot about industrial engineering. So we actually worked very well together and learned a lot from each other.

As you start conducting this research, did you know that a book would come out of this research or was it mostly writing some paper? Some, you know, papers for.

For different scientific papers. Yeah. So in the. When you first become an assistant professor, the task is to get tenure and to do that you have to write papers and peer reviewed journals. So that was my goal at the time. That was in 1983. 84. 85. And I didn’t write the chat away until 2003 after I had tenure.

Wow. And I’m going off of memory here from the original book, but if I recall correctly, you, when you wrote the Toyota Way, you had already completed, was it 20 years of research? At that point I would.

Well, let’s see. So 2003, I’m just doing the math. Yeah. So I started researching in two in 1976 up to 2003. So it was about 20 years. Yeah.

Wow.

But you know, it wasn’t all related to this topic, but I had a lot of research experience. But I would say I had at least almost 20 years of experience researching Japanese management in various ways. I was looking at supply chain, I was looking at product development systems and I was looking at manufacturing. I also started a consulting company and had experience, for example, working on the Ford production system with people who had left Toyota. And John Shook and Liker Rother both were working with me on the Ford production system as a consulting project.

o I had lots of different ways that I was learning from practice and from research. And it was over time that I narrowed down from Japanese management and manufacturing to Toyota. And it was because Toyota stood out in so many interesting ways from other Japanese companies. And the more I got, the more I delved into things at Toyota. Like I would study product development and Mazda and Nissan were interesting, but there was something special and different about Toyota. And that was true for product development. It was true obviously for the Toyota production system. And I think they’re say a thought leader in Japan. They’re always coming up with new ideas, testing them, and they’re a learning organization.

So we’re always learning and refining and many people learning, refining over many years and they end up with things that work and that are very clever. And then I was able to compare that to the research on organizations and social psychology and psychology. And I could almost always find research findings supporting what they’re doing. But the research findings were like done with college students or with different subjects. But they would find, for example, there was a famous finding, the magic number seven plus or minus two, and that applies to effective work groups.

So five to nine people seem to be the ideal for a work group. And if it’s more than that, you start to lose productivity. And if it’s less than that, you don’t get a diversity of opinions enough to get the best solution. What is Toyota’s magic number for their work groups? It’s five. That’s their ideal number in a work group is five. Over and over again, what they had learned through experience, trial and error, common sense was supported by research.

That is absolutely fascinating. And I’m wondering, so you write the book the Toyota Way, first edition, it’s published. What happened next for you? You were still teaching or were you teaching at the university?

I was at the university for 35 years.

And did you start to leverage your book as part of the course materials or part of the curriculum?

Well, in most universities, particularly in research universities, there’s an allowance for faculty to consult one day a week on average. And I was already taking advantage of that, for example, working on the Ford production system. So I was used to consulting. I had already formed a consulting company before the book came out. I had done an earlier book, Becoming Lean, which had gotten some attention, and that led me to get opportunities to do keynote addresses or to speak at off sites for companies.

And I had a consulting company. So what the Tata Way did was just greatly accelerate the opportunities I had for consulting, for speaking very quickly. So the expectation was that if the book did well, it would sell 60 or 70,000 copies. And within about the first six months, it had sold 40,000 copies.

Wow 

So it took off quickly, and then I quickly got bombarded with calls and emails requesting that I speak here or there. And then I got consulting opportunities. I grew my consulting business. So that part of my life really is what changed the most. The university is the university, and people are pretty busy with their own research and their own students. And I would introduce more of the Toyota Way into my classes. But the students at that time were not particularly interested in Toyota. And if you talked about any one thing very much, they would get bored and annoyed.

So I had to be careful not to talk too much about Toyota, but I had to. So I integrated it carefully into my existing courses. But the biggest effect on me was outside the university and on the notoriety, fame, traveling over the world. That part of my life grew so quickly. I bought off time at the universities so I could spend more time outside.

Wow. And I know that the book, the Toyota Way, it’s received several awards, many shingo awards, to be exact. Can you tell us a little bit more about that for those who are listening and don’t know what a Shingo award is? Can you?

Well, that was created at the University of Utah and it was based on, I think it was Utah State University, but was based on some way of honoring Shigeo Shingo. And in the Toyota production system in Lean, there’s a lot of discussion about Toyota and Taichi Ono, but less discussion about Shigeo Shingo, who was an industrial engineer who was working for the government and he’s working in a consulting capacity. And he was always outside Toyota, but he was a brilliant industrial engineer who learned about the Toyota production system from Toyota and then was hired by Toyota to teach their engineers and also by Taichi Ono to develop single minute exchange of dice, quick changeover of stamping dice. And so he was very intimately involved with Toyota, but as an outsider, as a brilliant industrial engineer, he was quite technical.

So he wrote books like the Toyota Production System from an Industrial engineering perspective that are very technical books. And they wanted to have some award to recognize them. So they created the award, which is primarily for factories, plants within a company that were considered excellent in applying the principles of the Toyota production system. But then they also developed a research award for books and articles. So I had a number of. I had had a Harvard Business Review article, a Sloan Management Review article. So I had a number of articles in applied management journals like Harvard Business Review that won awards. And then I had books like Becoming Lean won an award, and then the Toyota Way won an award. And then after that, every book I wrote about the, about Toyota, Toyota Talent, Toyota Culture, the Toyota Field book, I would send them in and everyone would win the award. So I ended up with 13 of those awards.

Wow, that is amazing.

At some point I was wondering, should I do it or not? You know, she’d get a chance. But I wrote those other books with other people. So for them it was the first time they got the award.

Wow, that’s so impressive. So, okay, the Toyota Way comes out there. It’s an immediate success. It’s an international best selling book published by McGraw Hill. So several years pass and this second edition comes out. You release a second edition in early 2021. What does the second edition have that the first edition does not? I know there’s a summary in the. I believe it’s in the preface of the book where it talks specifically about the differences. But I’m wondering if you can kind of give us a snapshot overview of what Some of those key differences are.

Okay, well, first of all, the Totoa, like you said, had done way beyond my expectations. I mentioned McGraw Hill, thought it might sell 60 or 70,000 copies and that would be successful. And by the time I wrote The Ted Away second edition and it sold, I think 1.1 million copies. Whoa.

Oh my gosh.

So I, for a lot of the last 15, 14 years since it came out, I, I was perfectly happy with that, you know, and I thought, you know, I, it’s enough, it’s a classic. It’s still, it was still being selling well after 14 years. So there’s no reason to touch with touch it or and possibly even make it worse. But two things happened over that time. One is that when I wrote the Tote away, I had some experience, but limited, limited experience in consulting and did not have experience applying all the principles I put together in the Toto way in my consulting teaching work. So over the years I had accumulated a lot more stories and a lot more examples, including in services, not only in manufacturing. So. And I would regularly hear people saying, I’m in a hospital. I read the Tote Away, I could identify, I could see how the principles apply. But it would be nice if there were some healthcare examples and not just manufacturing examples. So I’d hear that sort of thing a lot.

That wasn’t enough to push me over the edge to do a second edition. But in the meantime, Liker Rother, who was a student of mine in industrial engineering, he has master’s degree and then we worked together at Ford on the Ford production system. And he had, he was a shop floor rat. So he was in the shop, in the shop floor. He’s at the Gemba and mostly manufacturing for many years. And he became really good at like walking through a factory and in minutes detecting a lot of opportunities and then helping companies turn around the factories. And he was doing great. He was in big demand. But he was dissatisfied with the sustainability of what he was doing. When he came back often he would see what he had introduced working with them, going backward. He came to the conclusion that was missing was leadership of a certain kind.

And he identified that as scientific thinking. When he stripped away what is the toad away, what’s different about Teichiono? What’s different about these managers who work for Toyota? He came to the conclusion it was a way of thinking, not simply tools like Kanban or setting up a one piece flow cell. It was a way of thinking. And then he further concluded that it was a scientific way of thinking. And by that what he meant was that they didn’t trust their assumptions and felt a need to test their assumptions. So, for example, if they were really good at setting up one piece, low cells, and they kind of had that down, and then they went into a different company like Toyota, worked closely with their suppliers, teaching the tps, but then they also were teaching it outside of Toyota and outside of automotive, as a service to all sorts of companies. And even though they had kind of a recipe of things that worked, they would not go into another company starting with a recipe. They would go in assuming they know nothing.

And they would spend a lot of time with the CEO trying to understand the vision of the company or helping the CEO develop a vision, because often their vision was kind of weak. And then they would start working with people on the shop floor. And their goal was to develop those people by asking questions and challenging them, not by giving them answers. And they would start with the very basics. If the biggest issue for the CEO was on time delivery with high quality, they would want the people they were coaching to study their existing quality systems, to study the problems that cause on time delivery, just to understand the current condition. And then they were ground, then the projects were then grounded in the starting point, the current condition. And then they would encourage people to just try things. If people were kind of hung up like, what is the right solution and what’s the ideal quality system and what does Toyota do?

They wouldn’t want to answer those questions. They would just want to say, here are the problems you have identified that prevent you from reaching this goal. These are the obstacles. Pick one and just try something, but don’t spend money, don’t buy anything. Just try working with what you have. And then through a process of experimenting, discovering, learning, the system would start to build itself up over time. They would give hints and tips, and if it came to a pulse system, they would teach them about Kanban, but only teach them when the student was ready and they had a need. The end result would look like the Toyota production system, but they didn’t start with the Toyota production system and try to implement it. Liker had seen that for many years and studied a variety of tps, sensei, teachers, mentors. He came to conclusion that there was a pattern to their thinking.

That pattern was more important than the tools. In fact, if you take the tools underneath, the tools are a way of thinking, and there’s a purpose for each tool based on that way of thinking. And the underlying thinking is easily, not easily, but it’s broadly transferable, whereas the tools may not be. And that’s where a lot of people get confused by saying, well, we don’t make cars. We don’t make something every minute. We don’t have repetitive, simple jobs. We can’t, down to the second, create center work because they’re looking at the surface, which are the solutions that Toyota has applied in what you see when you go on a tour in Toyota, you’re going to see the assembly plant.

Almost very few people have gone beyond the assembly plant. But Toyota is a big company and has lots of departments and does a lot of things besides assembling cars. But that’s what you see. So if you’re just trying to find something you can copy, you might be out of luck. But if you understand the underlying principles and you understand and you learn the way of thinking, then you’ll solve your own problems. And that’s what Liker called scientific thinking. So he. He wrote about that ultimately in the book to Cotta Kata, in his case, Kata, as a way of practicing exercises to get better at scientific thinking. And he was very excited about it. And he had brought his book to me, signed, and he was very interested in. In teaching me about this. And he also wanted me to start incorporating it into what I.

When I talked about the Toyota way. And it seemed to me like it was a missing puzzle piece. Like, I knew. I knew about it, I knew about scientific thinking, because that’s actually in the original Toyota production system document. They say, really, TPS is based on scientific thinking, but Liker had fleshed it out in a way, tying it into neuroscience, tying it into cognitive psychology, tying into a lot of different literature. And he had fleshed it out in a much deeper way than I’d ever seen. And I started to get these aha moments, like, okay, that makes sense.

for example, the starting point for Toyota is always a challenge. What’s your direction? What’s your purpose? And the mentor will give you a challenge. And it could be to eliminate 90% of your defects. It’s going to be a big challenge. Or if you have a lot of late shipments, you’re paying emergency freight, it would be zero late shipments, no emergency freight. So they’ll give you a big challenge that might even seem impossible. And then they will encourage you and coach you to work your way toward the challenge with a lot of passion, persistence.

Don’t give up. Just keep trying. And what you’re trying are a lot of experiments. And that’s where Kaizen comes in, that you’re experimenting and learning your way to the goal. Through Kaizen, through repeated plan to check act cycles. Because the underlying assumption is you don’t know. You think you know, but you don’t. You know a lot of things, but you don’t know what’s going to work in this particular situation until you test it. So Kaizen is all about testing your ideas, recognizing many will fail and many will succeed, and you’ll keep on getting closer to your goal. So that’s what he.

That’s the essence of Toyota COT is teaching the scientific way of thinking to reach a challenge. But Liker’s starting point, number one, is to find the challenge. Now, I knew challenge was part of the Toto way, and I knew that and I talked about it, but I’ve seen it happen. But it never had occurred to me, I hadn’t put it together, that every single time a Japanese TPS master worked with another company, the first thing they did was establish a challenge. And they wouldn’t do anything until they had the challenge. And what the challenge gave is a direction, a direction that was a breakthrough, not little small incremental changes, but that would be a breakthrough for the company. And then all the activity after that was geared toward that challenge in that direction. Very focused. So based on all these discussions I had with Liker and these aha moments, I realized there was something really that I hadn’t clearly stated and explained in the Chota Way. And that’s what really led to the second edition.

I’m so glad you gave us that very detailed description of what scientific thinking is, because that actually was a question I was going to ask you. And then also defining Kaizen. So it’s such a great segue to the next question that I have for you. I’m going to ask you to put your professor hat back on and give us a crash course on some of this terminology, because I think some, sometimes also what I’ve noticed in the past when I’m working through my own consulting practice and people, they hear about lean and they hear a lot of Japanese words, and so that too can kind of trip them up and they start to.

That alone can cause them to think that, well, this isn’t something. This is over my head. This isn’t something that I can apply to my small company, or maybe this just doesn’t apply to my industry, as you mentioned earlier with that healthcare example. So, you know, the introduction of the second edition of the Toyota Way is actually titled the Toyota Way Using Operational Excellence as a Strategic Weapon. So I’m wondering if we could start there in terms of defining Certain terms. For those who are listening right now, what exactly is the Toyota Way?

Okay, so in what Toyota is best known for is the Toyota production system, which is their system for production, for operations. And Toyota recognized that more broadly, their management system for the. For the company was a way of thinking about their business. And it was rooted in an underlying philosophy of why the company existed, what the purpose was. And they also realized that as they went overseas and set up factories all over the world and other kinds of operations, sales organizations all over the world, that the Americans, the Mexicans, the Russians, the British, the, you know, whatever, French, that they would learn, like what most of us, they would learn the tools of Lean first, and they would learn some principles like eliminate waste and what are the seven wastes? But they didn’t understand the underlying philosophy and way of thinking. So that led to a document within Toyota called the turret away 2001. And that was because it was introduced in 2001. And they put a timestamp on it with the understanding that at some point it might change. And actually in the last couple years, it has changed. But The Toyota Way 2001 was Toyota’s way of explaining the underlying way of thinking that the Toyota production system is one piece of, one part of. And they have two pillars.

One is respect for people and one is continuous improvement. And that’s in English, because the Choto Way was really. That document was really not intended only for Japanese. It was primarily intended for everybody except Japanese, because the Japanese already got it and they had usually hired into the company and they spent their whole careers in the company. And it also fits certain aspects of Japanese culture quite well. So they didn’t really need to explain all this internally. The culture was a culture, and they were like fish and water, and they didn’t know what it was. But explaining it outside was more difficult because it’s always difficult to explain your own culture to outsiders. And they did have experience, for example, in America with the Georgetown, Kentucky plant and the. To a technical center where they do product development. And they had.

Were teaching it to Americans. And then the Americans would explain things in their own words that could be better understood by other Americans than the Japanese could explain. So the Toyota Way was written for outside, for. For overseas operations. And they ended up with a house like the Toyota production system, with two pillars. But instead of the two pillars being just in time and what’s called jidoka, a Japanese word that often means it’s interpreted as built in quality, the two pillars were continuous improvement and respect for people.

Now If I went to any of your clients who don’t like Japanese words or think auto doesn’t apply, and they think that some of the Japanese, the terminology of the Toyota production system, like tact and hey, junka, I sound complicated. I would bet that every one of your clients could understand the idea of continuous improvement and could understand the idea of respect for people.

Yes.

And if you ask them, would you like to do those things, would you like to show your people respect or would you rather not show them respect? I bet nobody would say they’d rather disrespect their people.

Right.

And if you ask them, would you like to continuously improve or you’d like to be. Would you like to be stagnant, not improving? I bet nobody wants to be stagnant. Everybody realizes that they need to adapt and improve in order to keep up with the market, to keep up with the competition. So they understand that the world is dynamic and changing and they have to be dynamic and changing to keep up with it. So those are two things that everybody can understand. Then Toyota’s Toyota Way has a foundation starting with a challenge, which I mentioned.

Then a Japanese term which means go and see to understand. Often they will use the expression grasp the situation. What is the current situation? There is a Japanese term, the gemba, which is where things are happening. So if you want to understand the shop floor, don’t sit in a conference room theorizing about the shop floor. Go to the shop floor and observe and see for yourself. If you want to design a new product for customers, don’t theorize about what your customers want. Go and talk to your customers and see how they live and see how they are using their existing products. So it’s delving in almost like an anthropologist who goes and observes directly and talks to people and asks questions and listens. There’s a lot of value placed on direct observation, listening carefully and understanding the facts of what’s really going on here.

So if you understand the challenge, which gives you the direction, and then you understand the current condition, which is your starting point, then the third step is what I call kaizen. It’s starting to experiment. And Toyota would prefer that you try many small things rapidly instead of big home run transactions. Like you might say that we need to reduce our costs of purchasing. So we’re going to create a global purchasing operation and even consider the possibility of outsourcing purchasing, which some companies now do. So that’s, you know, you bundled up purchasing into one transaction. We find a vendor and we outsource it, and then you’re spending all your time trying to compare vendors and find the best deal.

Whereas what toy would say, okay, well maybe you’ll eventually you’ll conclude that you need to outsource purchasing. But let’s just start with understanding what you’re trying to accomplish. What is your real goal? They might say, we want to cut costs. And they might say, okay, I understand cutting costs is one goal. Is there anything else they might pull out of them that they have to ensure high quality and that the products need to be integrated with their products so they need to have design integration. You’ll usually find that there’s more to it than just cutting costs. Then they’re going to say, let’s understand the current condition. And they might find, for example, that the purchasing people are buyers and they’re trained in negotiating costs, but they’re not trained to really understand if the products fit with their current products. They’re not trained to support design engineering. They’re not trained to understand quality of their vendors. So there’s a bunch of holes in the current system for working with suppliers. So that would lead to the Kaizen process.

What can we focus on first? If the company takes that seriously, they will almost always make great progress on all their goals by developing their current organization in new ways. And they will conclude that it would be crazy to outsource this because now our people are so good and they understand our culture and they’re integrated into our systems. And to outsource this to strangers just to cut costs would be nuts. They couldn’t possibly do the same job. That’s in the foundation and then in the foundation of respect for people, is respecting people by developing them, by investing in teaching them, developing their capabilities so that they’re better people and they’re more valuable. And that will spill over into their personal lives. It’ll spill over to charitable work and a lot of parts of Toyota. You’re expected to do charitable work that involves your time and using the skills that Toyota has taught you. And also that’s rooted in treating every person who works for the company as a team, a long term team member that TO is investing in, expects to keep around hopefully for their whole careers.

That’s great. So, you know, I know we need to go ahead and take a break real quick so that we can hear from our sponsors. But when we return, I’d like to shift gears just a little bit. I am going to ask you for your definition of operational excellence first, but I’d like to also shift gears and ask if you can Address some of these common myths and misconceptions about Lean and its application, particularly to small businesses. So let’s go ahead and take a quick break. As your business grows, things get more complicated. A CRM platform that has been cobbled together gets clunky as you add more users data and processes, slowing you down just when you need to speed up. That’s why HubSpot built a powerful CRM platform that’s easy to adapt to your customers expectations and and changing business needs.

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Always learn [email protected] okay, we’re back. And before that break, Dr. Liker was starting to define some key things that if you’re listening and you’ve always heard about the Toyota way, you’ve heard about the book, you’ve heard about Lean, but you never really quite knew what some of these things meant. We’re starting to talk about some of these core definitions. So operational excellence, what exactly is that? Is it a mindset? Is it a cultural thing to try to achieve in a company? What exactly is it?

Okay, so in the 14th principle and we jump ahead to now, I talked about Toyota’s House of the Toyota Way 2001. And in my new model I have reconfigured the problem solving p. I had four Ps and problem solving was one. And the new 14th principle is connecting strategy to execution. So I want people to have a bold strategy, but then to work to achieve that strategy through both. Some big steps, but a lot of small steps. And the steps are designed to execute on the strategy. So the strategy is really kind of a theory. This is where we want to be in the marketplace. Here’s a business model, here’s what’s unique about us compared to our competitors. So that’s all a vision of what you want to achieve and a plan. And then you need to put that plan into action. And I refer to that as execution, operational excellence to me, is about execution. So if you’re just focused on operational excellence and that’s all you’re saying, then, and this would be true, say, for industrial engineers, then your client is the company, your client is the management, the executives, and you want to know what they want you to achieve. So they have a strategy and they have a reason for wanting, wanting you to achieve something. And to some degree, it doesn’t matter what that is.

So the typical industrial engineer will not question that. But then, once they understand the direction, now they have marching orders, now they have to improve the ability of the whole system of people, processes, technology to achieve those objectives. They didn’t just define the objectives, that was somebody else’s job, but now they’re helping to execute to achieve those objectives. So to me, operational excellence is about execution. It’s about doing excellent job at delivering on whatever the objectives are. We want to have this great product that customers love that needs to be designed. So there’s a process for designing that product that the companies that people are going to love, we need to deliver that product to them with very high quality. So that requires excellence and quality in perhaps manufacturing or creating the product, delivering the product, you know, whatever’s involved in doing that, they want it to be very reliable, to want to be able to depend on you to give them something that works every time, and they would like it to be on time, they’d like to have it when they. When they need it. So Toyota defines really the main elements as cost, quality, delivery, and if I can give you, with high quality exactly what you want, when you want it at a competitive cost, you’re going to be happy, whatever the product or service is.

So delivering on that is some sort of a system and processes and people, and there’s technology involved and that all has to come together. And now if you want to be excellent at that execution, then what Toyota does is they start with defining the ideal state. They say, what would perfection look like? Perfection is zero defects. That’s the vision, that’s the true north for operations. Excellence for Toyota is striving for perfection, but also they recognize that they never could be perfect. Nobody in the company is perfect. There are so many variables, there’s so many things that happen unexpected that you’re always going to have waste, you’re always going to make mistakes. So what they actually do, their actual execution, the reality of it, it will always fall short of perfection. But what perfection gives them is something to strive for, something.

Yeah.

So operational excellence for Toyota is something to strive for, to Deliver on the promises made by the company to their customers.

Excellent. And this might seem like a really simple basic question, but how did we go from Toyota production system to just referring to it as lean?

You can. Well, there’s a guy named David Krafczyk who was a student at Stanford University, and he had the opportunity to be an intern at Nummi, Toyota’s joint venture with General Motors, the first Toyota assembly plant in North America. So that was, like, right around the corner from Stanford. And he had an opportunity to work there and learn about the Toyota production system. He then went to mit, where he worked with Jim Womack and Dan Jones. And Kravchak actually came up with the term lean. And apparently what he was thinking about. He was also apparently a pretty good athlete. And what he was thinking about is that the Japanese, whatever it was, whether it was product development, whether it was manufacturing, whether it was inventory or cost or productivity, whatever it was, they seemed to be able to do more with less, more with less people, faster, higher quality. He was thinking, what would be a good word to describe more with less. Then he thought about an athlete who can do more with their body, expending less energy than average people. He came up with the term lean because you talk about a lean athlete.

So his, you know, his. I think this is my understanding. I haven’t talked to him about this, but he did write an article in Sloan Management Review introducing Lean before the machine that changed the world came out. And then the machine that changed the world amplified that a thousand times and became a bestseller. And then lean took off as part of the terminology. Now they called it lean production, but in the book, and Jim Womack, if you listen to him, he will always say, it wasn’t just production. We didn’t mean was product development. It was purchasing, it was sales. It was every part of the company. It was a lean enterprise. It was not just lean production, but they use the term, the title lean production. Then it took off. And like any hot words, buzzwords, it gets misinterpreted. And also it gets interpreted in many different ways, like a Tower of Babel by many different people.

Well, I would have never imagined. Not even my most educated guess, I think, would have led to what you just shared with us. So thank you for that, because I know sometimes people get confused. I, for one, for years, was confused by that. Well, is there a difference? Is it the same thing? So thank you for clearing that up. I’d like to read a quote from the preface of the second edition of the Toyota Way we want, and this quote comes from Margaret Wheatley, we want organizations to be adaptive, flexible, self renewing, resilient, learning, intelligent attributes found only in living systems. The tension of our times is that we want our organizations to behave as living systems, but we only know how to treat them as machines. And this kind of goes back, Dr. Liker, to what you were sharing earlier.

When people start to just automatically break down and say, well this or shut down, I should say, and say, you know what? Lean Toyota production system, this does not apply to my company because we have a professional services firm and I know you’ve, you’ve co authored a book specifically on the Toyota Way forest service companies. And that’s a very common myth and misconception that it can’t be applied in banking, it can’t be applied in healthcare or professional services in general. Can you speak to that just a little bit more? And why Lean or the Toyota tps? It truly is industry agnostic.

Okay, so. Well, first of all, Margaret Wheatley is a systems thinker and I love that quote. And before I’d ever read the quote, before I knew even about Japanese manufacturing, I was very interested in, interested in socio technical systems, which is a whole field of consulting and design and design of organizations. And it’s a. And basically you’re looking at the organization as a combination of a social and technical system that need to work together and be integrated and they influence each other in complicated ways. So the technical system itself is the machine part. And if you look at the organization as a machine and view it like you would say an engine, and then you might say the engine’s broken, we need to fix it, so we repair the carburetor and then the engine works again, or maybe you find a defect in the design of the carburetor and you have to recall 100,000 engines and repair the carburetors and the expectation is that all 100,000 engines will now work the way they were designed because we fixed the problem.

If you view an organization as a machine, that you make the same assumption that if the machine, if the organization is broken, we need to have the right solution to fix it. And then we ought to be able to introduce that same solution into many other organizations and get the same result. So if in the case of Lean, for example, if you’re viewing it as a technical toolkit to fix a technical system, like we have waste in the technical system, we want to get rid of waste, so we’re going to pull out these tools, then the expectation is if you have say, 40 factories around the world, then it should work in the same way in 40 factories, when in fact each factory is in a different country. Each country has its own culture, each factory has different equipment from different ages, and each factory is actually a unique sociotechnical system and needs to some degree be treated as something unique that needs to evolve in its own way. So the paradigm, our worldview of looking at organizations like their machines, machines that happen to have people in them, and people are the least predictable part of these machines, in a sense, people are just defective robots who have all sorts of quirks that prevent them from working in an optimal way. Then you want solutions to fix the problems for mistake proving. Sounds great, because now I can. Now these dumb people who make mistakes can’t make mistakes. On the other hand, if you’re looking at the organization as a socio technical system and the technical part is routine, predictable, repairable, but the human part needs to be created, developed, grown, like Mark Wheatley is suggesting, and it’s really the human part that’s going to do the thinking, going to improve the technical system, going to solve the problems. Then you have a totally different image, which is Toyota’s image. The most vital part of any organization, whether it’s in sales or purchasing or manufacturing, are the people who are doing the thinking, doing kaizen improving. So in the preface to the new edition, I made the distinction between mechanistic and organic.

Organic meaning a living system. In a sense that’s a false dichotomy because I mentioned it was a social technical system. So there’s a mechanistic part and there’s an organic part that need to work together. But just for simple, explicity, I just divided the world into two things, the mechanistic view and the organic view. Then when you look at it from an organic point of view, then you think more of evolving your system, not somebody else’s system. How can we evolve to another stage of maturity? The starting point is always our purpose. Toyota has their purpose. What is our purpose and what are our challenges and what do we need to work on? Then our starting point is where we are and then we’re going to try to work our way toward the goal. Now, in the meantime, the charter production system gave us some interesting ideas. For example, the idea of one piece flow, which is flowing value to the customer without waste, and the idea of eliminating waste. And when you look at the delivery process, the execution process for your goals, you will discover that you have a lot of waste and you’d like to have less waste.

It could be, for example, you’re delivering software to a client and if you look at the current software development process, you’ll find a lot of wheel spinning, a lot of, a lot of problems that created because different software engineers are not talking to each other so their parts don’t fit together. The end result of a lot of that is rework. And you might find you spend as much time on rework as you do on the original design of the software. And you might say, you know, we’d be a whole lot better off if we could eliminate most of this rework. We could shorten lead times, we could do a better job of giving the customer what they wanted and pay more attention to the customer. We could reduce our costs. So even though you’re dealing with a knowledge work process and it’s not a bunch of machines that you lay out in a certain way on the factory floor, the idea of one piece flow is still relevant. And trying to get the knowledge work to flow without interruption, without a bunch of waste doing it right the first time is a very good vision for a software development company.

I know you know that. The subtitle again to the Toyota way is the 14 management principles from the World’s Greatest Manufacturer. Now, unfortunately, we won’t be able to address each of those 14, but suffice it to say those 14 management principles are categorized into four. 4. Philosophy, process, people and problem solving. What I found interesting about that, Dr. Liker, is that when I talk about business infrastructure, there’s primarily three elements. And for those who are listening to this show for the first time, business infrastructure is an operation system for linking your people, your processes and your technologies to ensure that growth happens in a profitable and sustainable way.

Unfortunately, I know we’re running out of time here, so we won’t be able to look at each of those 14 management principles individually. But I’m wondering if you could share with us at a high level each of these categories, starting with philosophy and that long term systems thinking. This is so important because it’s literally the foundation or the center, as is illustrated in several diagrams throughout the book. Book. That is the core of everything that you’ve been talking about.

Yeah. So like Margaret Wheatley says, we need to think of organizations as living systems. So the opposite of thinking in terms of systems is thinking in terms of point improvements. I make this change and I expect to get this measurable result and I expect that to be fairly predictable. What are the levers that are going to give me these results? Then I could just pull the levers once I understand them. But when you deal with a system where parts interact, there’s feedback from the environment that can influence what happens in your organization.

Then a lot of those simple linear cause and effect assumptions break down and that’s what creates the uncertainty, which leads to the need for experimenting and learning in each part of the organization, not just once in a corporate office and then deploying what you figured out. So that’s why you need the people who are closest to the work, who are involved in continuous improvement, because things are always happening that you can’t predict and can’t expect because it’s a system. Toyota’s thinking about Toyota as a system that’s part of a larger system in the world that’s very dynamic and changing. There’s so many different parts of the world that are moving parts and the world is so complicated that you need to have some focus.

You can’t focus on everything. The other piece of systems thinking that’s critical is purpose. What do we want to be? What are we trying to accomplish? Toyota has a global vision every 10 years and they right now have a 2050 vision. So they’re looking way out and then that can then also becomes a one year vision for everybody. So everybody has a one year challenge, which is part of what’s called Hoshin Connery. Toyota is always looking out where they want to be in the future and they want the direction to be clear. But then they understand that the system is complicated. So you need to give local control as much as possible with some flexibility to improve things at the front line by shop floor workers at the front line of where customers are with engineers who are developing products. So there’s a lot of flexibility given to the frontline workers who see the problems every day and can respond to actual problems, not just theoretical problems.

So long term systems thinking, they understand that, number one, you need to have a long term vision, you need to have a clear purpose and you’re going to have both ups and downs. Things work, things that don’t work. You can’t punish people when things don’t work. And you need to develop your people to become really good at sensing problems, understanding their causes and solving the problems. And that means that you need to value your people very highly and treat them as a long term resource that appreciates in value, while all the equipment depreciates in value. So people are the only appreciating asset in the company. And when you give them an assignment that has a goal, you want to get the goal, you want to get the results. But you also want to develop the people. And if they’re, if there’s a new problem for them and you’re challenging them, they will take longer to solve it than perhaps you could with your expertise. But you have to have patience to let them struggle and let the project take longer. Because in the long term you want to develop those people so that in the future they’ll take less time and they’ll have more capability to develop. As a leader might have 10 people who I’ve developed and now I’ve expanded my reach 10 times. So that’s all part of long term systems thinking.

Now I know there’s another cluster of out of those 14 management principles that fall under the category of process. And I’m going to read a quote from your book regarding processes. We often think of a process as if it were a physical thing, but it is actually an ideal to strive for, not a tool to implement. So again, just looking at those different management principles that do fall under process, what does it mean overall?

Well, overall, first of all, the processes people follow in each other production system or in lean are things like one piece flow, which often in manufacturing is a cell. Instead of having equipment in different departments that builds to inventory and then ships to downstream processes, you create a cell where you line up the equipment to make a family of parts and you make it self contained. You move the equipment very close together and you have almost no inventory in between, in between steps in the process. I’ve even seen it in offices where they’ll pull together people. For example, one was in a transportation department where they arrange transportation logistics and there’s different specialists and they put a collection of specialists together into a set of desks arranged like a cell so that they could actually flow their work from person to person.

So that’s a specific configuration. And what I asked in the Toyota way is what is the underlying principle? And the underlying principle for Toyota is to strive to achieve one piece flow. And one piece flow means you, if you have three people and each has some specialty and it has to go from person A is perhaps the engineer, and then it goes to prototyping and they build a prototype of the part you’ve envisioned. And then it goes to a test group and they test the prototype instead of having a big batch of different engineering designs that go to prototyping as a batch and then they find time to schedule and figure out and, and build the prototypes and eventually it comes back to you and then you bring it to testing and they, they have a whole Backlog of things to test. You’d like to come up with the idea, prototype it, test it in a one piece flow. So that that would be a waste free process. If immediately when I came up the idea I could build it and then immediately I could test it, that would be, you know, kind of perfection, the ideal of perfection, because there’d be no waste in the process. As soon as I have to hand off to someone else and it goes into a queue, there’s waste.

One piece flow is an ideal. Again, recognizing the ideal is never reality, but it’s something to strive for. Then also recognizing that people are limited in our ability to capture enormous amounts of information and know what’s going on and prioritize, how can we make the priorities of each person very clear? That’s done through visual management. It’s also sometimes called 5s, where we have everything organized and color coded so that almost if I’m doing a lot of work and I’m very productive and I don’t have time to search around for stuff, I know I go to the red box and I get this, I go to the orange box and I get this. So, so they’ve created a visual workplace because of the unique talents, strengths and weaknesses of humans. And the ideal for the visual workplace is not just to have things color coded. The ideal is that we only have what we need to use within easy reach. And when something’s going wrong, there’s a gap between what should be happening, what is happening. We can immediately visualize that, it becomes immediately apparent.

So visual management is trying to visually display very clearly and easily a gap between the standard and the actual. And the standard is also an ideal that this is the best way we know how to do whatever it is. So whoever’s doing that job, let’s all do it that way until we come up with a better way. And the standard is something to strive for. We would like everybody to be following the best known way and have the skill to achieve the best well known way. So again, the standard is something to strive for because not everybody’s going to do it perfectly. And some people will do it right and some people won’t get it. So they have to be trained and developed to get it. And then there’s a method called job instruction training to train people in a very structured way to practice and practice until they can achieve the standard. So when you look at standards, you look at visual management and 5s, you look at one piece flow, you can look at them as solutions to problems. But in Toyota’s case, they’re looking at them as a vision to strive for something to work toward, but that we can get our hands around and understand and grasp.

And visual control is one of my favorite process management principles, for whatever that’s worth. Now, the third category is people. And I know you’ve spent a good bit of time speaking with us about the importance of developing leaders and people and teams. Can you talk a little bit more though, specifically about the management principles? I believe there’s three of them that have been categorized under people.

So first is to develop leaders to live the philosophy, to live your values. Because just because you have a set of values and you explain them to somebody, it doesn’t mean they can behave in that way or act upon them in different situations appropriately. So you have to develop leaders to live your values. And for Toyota, any development of people is best done through on the job development or actually doing the real job at the Gemba, doing the real work. I can tell you what to do and you might think you understand, but then it doesn’t translate into behavior. I might go further in a classroom, for example, give you exercises where we notice that you’re not doing what you think you’re doing. We can give you feedback on how you’re doing. And that’s the next thing is that you can now do it in a simulated environment. But finally what I want you to do is to do it in the real world, in your daily work, in all the different situations you face.

So the ideal for Toyota is that people are learning on the job and leaders are close enough to the people that they can observe when they’re doing well and when they’re not doing so well and give them feedback and coach them based on actual situations that occur on a daily basis. That’s called on the job development. That’s a different skill set than the skill set of planning, controlling, disciplining, the skill set of listening, observing, giving feedback, challenging, giving praise, supporting in leadership model, and then also thinking long term is part of what you expect of a leader in Toyota. Thinking scientifically, being really good at problem solving, something expect in Toyota, you have to develop all those things in your leaders. Then Toyota also views their suppliers as just a part of the overall trader system. So they need their suppliers to be thinking and acting in a way that’s consistent with the total way and achieving the levels of quality and on time delivery that Toyota expects. So they need to partner with the suppliers and develop their suppliers, not just buy their suppliers and buy parts from their suppliers. It’s Much more than transactional.

So that’s the second. Another part is dealing with suppliers and the whole value chain, also dealers who sells a product. And then developing work groups that actually do the core work is a third part. Toyota has a work group structure that includes a team leader with a one to five ratio that I mentioned. And the team leader is expected to be a coach to develop people. The team leader also does the jobs sometimes and coaches other times. So I spent a lot of time talking about the work group structure that leads to a team leader who then reports to a group leader. The team leader has about four or five people in his team and the group leader will have about 20 to 25 people in their group. And I describe the group leader as being like the president of this mini company. They’re 20 people. Whatever they do, they run that part of the business. They own the technology, they own the standard work, they own the, the annual targets.

And if I may just kind of chime in to piggyback off of what you were saying about supply chain. And I’m so glad you mentioned that, because it goes when these management principles that focus exclusively on the people aspect, it goes beyond just your immediate team. It includes your vendors, your suppliers, the entire ecosystem. And so I did notice that in the second edition there is a section that you were able to include about what happened to all of these supply chains as a result of COVID 19. So I would say, if for no other reason, when you buy this book, definitely read this, because it goes beyond just your ability to provide a good or a service.

There are raw materials or there are other. Even if you have a service, there are other people within your overall supply or value chain that can directly impact your ability to deliver on time, within budget, with high quality, consistently to your customers. So I think that’s really important. I just kind of wanted to chime in there. And so the last category, the fourth P out of the 14 management principles is problem solving. And I know you’ve already talked to us about one of the management principles that falls under this category, connecting strategy to execution. But can you tell us overall, in general, what is problem solving about and the management principles that speak specific to problem solving?

This is the part that I changed the most. It’s almost completely revised. And a lot of that was because of Liker Rother’s Torakata and what I learned talking to Liker. And So the, the 12th principle is dealing with thinking scientifically and learning iteratively. And I already discussed that. And the first step of that is your Challenge your direction. And then the question is, how do you set the challenge of direction? And you could set the challenger direction, you know, have a manager just pick one, and then have a lot of different targets in the organization that may not align to what matters most of the company. So you need to mat to define what matters most. And that’s defined by the strategy. So strategy gives you long term vision, then you are developing people to do the day to day problem solving.

Then in between that, you need shorter term objectives that people can actually dig their teeth into. And that’s Principle 13 is about Hoshin Connery, also called policy deployment. How does Toyota deploy the strategy so that everybody knows what they need to do to support the strategy? And the way they do that is through an annual planning process. It takes about five months of the year planning for the next year. And what they’re doing is taking the strategy, which is longer term, and then at the top of the company saying, what are our main priorities for this year? And then that cascades down level by level, where at each level people are asked, all right, what can you do to support the strategy to support what your boss needs to accomplish in the year? And then what can you do to supply to help your boss meet his objectives? And you go all the way down to the point where you get to the work groups, for example, of team leaders or group leaders.

And so that that annual planning process then sets the challenges for everybody in the company. So what they’re doing matters and adds up to something meaningful for the company. And that gives direction to the problem solving. Without that, the problem solving can be fairly directionless. And when it comes to something like say 5s is very popular. Cleaning up the workplace, getting rid of what you don’t need, color coding things, finding a place for everything, that’s an interesting exercise and most people enjoy it and it looks better when you’re done. It’s like cleaning your garage or your basement. It feels so good to see everything look neat and orderly and tidy. But you could do endless 5s. You could never stop doing 5s. So in Toyota they would ask, why are you doing that?

What are you trying to accomplish with a 5s? Where does it fit into your annual objectives? A certain amount of 5s you just want to do, for example, a lot of 5s will help with safety, and that’s always the first priority. But you need to somehow prioritize because just way too many things to improve or fix than we possibly have time to improve or fix. So we need to pick those things. Not that we could change, that might be nice to change, but that we need to change in order to meet the goals of the company. And those goals are set through this annual planning process.

Well, this has been absolutely fantastic as I know it, as I knew it would be. This. Wow, it’s, it’s great. And, and hopefully for everyone who’s listening right now, you are convinced why you need to go and get the second edition of the Toyota Way. If you want to have a best in class business offering the highest quality and highest value to your customers or your clients, this book is a must have as far as resources. Dr. Liker, so I know you have. Is it 10 books or is it more than that?

It’s about 15

Wow. Okay.

Some of those were before the turn away and they’re not just lean books.

Okay. So we’re going to make sure we have a listing with, with links to all 15 of those books because obviously we don’t have time to talk through all 15. We’ve talked a great deal about the Toyota Way. But I’m curious for people who are listening to you and they’re thinking, oh my gosh, Dr. Liker is an excellent teacher. I really like this idea of scientific thinking. I want to learn more about these 14 management principles that constitute the TPS. How can I learn more from you? I know I went to your website, your company’s website, liker, Lean Advisors and I did notice that people can sign up for courses and maybe even some coaching or consultation from you. Is that correct?

At this point? Yeah. We’re not offering sort of standard like public courses where you could just sign up. But people contact me and they ask for support of various kinds. It could be mice coming out and speaking on left side or doing a keynote address, or they might want more hands on support. And I have a network of people who I draw on for doing that. So we do consulting. And then I would have to say that there are many qualified consultants out there, Alicia, you’re one of them.

Thank you.

That are strong in certain areas. But there’s a lot of, for example, former Toyota people. There’s people I’ve written books with, some of my co authors and frankly there are a lot of people out there who are better than me at the hands on, detailed work of transforming an organization, introducing these concepts and tools. That’s why I had a consulting firm and it’s much smaller now than it used to be and I spend less time on it.

I do a master class, Lean Leadership in cooperation with Toyota and that’s through a group called the Leadership Network, a private company. And I do those about five or six times a year. We did our first one through virtual reality last month where people have headsets and they’re participating from their homes or offices. But anyway, so I do a three day class on lean leadership and that’s a standard offering that I’ve been doing for about six years and that’s offered four to six times a year. That’s the only thing I do that’s sort of standard, off the shelf and everything else I do. Somebody contacts me and asks for help in a certain area and we work together and find some way I could help or I could recommend somebody that could help.

Okay. And before we get into how people can contact you, I’m also curious and it’s so tempting to just jump right into the tools, which is what you warned us against at the very beginning of this interview. But I am curious. For those who read the Toyota Way and there’s so many amazing, wonderful illustrations throughout the book and for those of us, for example, if we see an example of an A3 and there’s several examples, actual illustrations throughout the book, is there a central place where you would recommend people go to download some of these templates based on some of the tools, you know, value mapping?

Yeah, a lot of this if for me, if I want an example, I would Google it. Literally I would go to Google and I would put in value stream management templates, value stream mapping templates and I would click images and I would see all sorts of examples. So that’s, you know, that’s one way. The one place that does teach a whole bunch of different courses and is true to the Toyota Way is the Lean Enterprise Institute Lei and they do on all these tools, they do various kinds of workshops and they have mostly former Toyota people or people who have trained or trained well in the Toyota Way.

They really top notch people are teaching these courses. So they have a whole set of courses that are excellent. And that’s another place I’d go is just to their website. They also have examples. But there’s a lot of books that the Lean Enterprise Institute put out like Learning to See, which is a book about value stream mapping and making things flow, which is about setting up material flow systems. And there’s how to workbooks on most of the lean topics through them. And then there’s Productivity Press that has a zillion books on all these tools and topics.

And I know even you know, I’m looking, I have the book in my Hands right now. And even in the second edition of the Toyota Way, there’s actually a list of books, not only books that you’ve written, but books, other books that you recommend as well.

They also have an appendix in the. In the second tutorial way, where I list for each of the 14 principles, I say, here’s what it would look like. It was purely mechanistic and you’re missing the point. Here’s what it looked like in the ideal, if you’re achieving the principle, and here’s a midpoint of where you might try to get to. And then I suggest that you might want to use that like a checklist and say on each of the 14 principles, where am I now? And where would I like to be? And that gives you a way of focusing.

I’m actually looking at that right now. It’s pages, it’s. It’s in the appendix, pages 376 and 377. So funny you had mentioned that, because I was going to bring it up anyway, but. But I’m glad you, you brought it up first. So it’s figure A1 again in the appendix of the second edition of the Toyota Way, and it actually spells out each of those 14 management principles.

And the cool thing is you and your team can actually take a look at this table and figure out, as the instructions say here, circle your company’s maturity level for each of these principles, and you can see where you are versus where you’d like to be. So there’s that visualization component of it as well. What’s the best way for people to connect with you?

Dr. Liker, through email. My email at the University of Michigan, Liker. Dot edu. Liker. Edu. And that’s been my email for probably the last 30 years.

Wow. And again, that’s Liker for UniversityOfMichigan.

Yes. Okay, thank you very much. So, I know we are kind of running out of time here, unfortunately. There’s so much more I wanted to ask you, but I do want to be respectful of your time. But I’ll just quickly, quickly summarize some of the key things that you shared with us. First, thank you so much for sharing with us your backstory and your background and how you came to get involved with research in the automotive industry and in particular, Toyota. So that was really fascinating and it gave great context, knowing about your background in sociology as well as industrial engineering, and how you’ve been able to blend elements from both of those fields into this body of work that you’ve become well known for.

One of the things that really stood out for me was your definition of what the Toyota way is in and of itself. It’s Toyota’s management system for thinking about the business with the two main pillars of it being continuous improvement and respect for people. I also appreciated the fact that you said most of us, and I’ll admit I’m very guilty of this myself as well, we focus on the tools and not the underlying philosophy and the scientific thinking. So I’m definitely going to go back and reread those chapters that you said, your former student Liker, Liker Rother I believe is his name, and how he introduced that scientific thinking aspect. So I’m definitely going to make sure I go back and check that out even more.

I also started writing out kind of a very rough step by step process, very generic, based on some of the things that you’ve shared with us. So starting off with defining what does perfection look like, because that is the true north, that is the guidepost, it is the true objective. But to your point, Dr. Liker, it’s one thing to we’re striving for one piece flow when it comes to process. We’re striving for perfection knowing that it never really will be attained. But as long as we’re striving for it, we can always be in that mindset of continuous improvement. The next thing that I have is define the challenge because that’s what gives direction toward a breakthrough in the company. And then next you talked about going and seeing to understand, which is summarized under the Japanese term Gemba, going to the Gemba, seeing it for yourself. And then lastly you talked about Kaizen, that idea of experimenting, trying many small things rapidly. And you made it a point to let us know, to not outsource this. If you’re talking about building this scientific thinking culture within your company, train your people from the inside. Don’t bring in those outsiders.

So that was really great advice as well. I really appreciated your definition about operational excellence, the fact that it’s about execution and doing an excellent job at delivering on objectives. And lastly, I think this is also a point that’s definitely worth repeating and that is that we have to look at our organizations, look at our companies as socio technical systems and not as machines. This has been absolutely phenomenal. I can’t thank you enough. If you want to know more about how you can apply, apply the Toyota way to your business. Again, regardless of industry, regardless of size, you have to buy this book. It is an investment.

If you’re serious about offering best in class product goods and services. This book is a must have. In fact, I think it should be required reading for any business serious about sustainable profitability, customer loyalty and operational excellence. If you want to connect with Dr. Liker, he was kind enough to share his email address with us. That’s liker l I k e r at umich edu so that’s um like money I c h dot edu Dr. Liker, thank you so much for taking time to come out and and speak with me today. I really appreciate it.

Thanks for having me. That that was a great summary and I enjoyed talking to you.

Thank you. Now don’t forget to check out BusinessInfrastructure TV. That’s where you can access quick links to all 15 of Dr. Liker’s books as well as his consulting firm’s website and even more resources that he’s mentioned throughout this interview. There’s no need to type out that web address, just make sure you click the link in the description of this episode wherever you’re listening to this podcast and it’ll take you directly to that list of resources. You’ll also find out more information about the HubSpot Podcast Network as well as our sponsors. Please support them when you do.

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