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

by Rother, Mike

  TOYOTA KATA

  TOYOTA KATA

  MANAGING PEOPLE FOR

  IMPROVEMENT, ADAPTIVENESS,

  AND SUPERIOR RESULTS

  MIKE ROTHER

  Copyright © 2010 by Rother & Company, LLC. All rights reserved. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

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  Contents

  Foreword

  Acknowledgments

  Introduction: Transforming Our Understanding of Leadership and Management

  Part I. The Situation

  Chapter 1. What Defines a Company That Thrives Long Term?

  Part II. Know Yourself

  Introduction to Part II

  Chapter 2. How Are We Approaching Process Improvement?

  Chapter 3. Philosophy and Direction

  Chapter 4. Origin and Effects of Our Current Management Approach

  Part III. The Improvement Kata: How Toyota Continuously Improves

  Introduction to Part III

  Chapter 5. Planning: Establishing a Target Condition

  Chapter 6. Problem Solving and Adapting: Moving Toward a Target Condition

  Summary of Part III

  Part IV. The Coaching Kata: How Toyota Teaches the Improvement Kata

  Introduction to Part IV

  Chapter 7. Who Carries Out Process Improvement at Toyota?

  Chapter 8. The Coaching Kata: Leaders as Teachers

  Summary of Part IV

  Part V. Replication:What About Other Companies?

  Chapter 9. Developing Improvement Kata Behavior in Your Organization

  Conclusion

  Appendix 1. Where Do You Start with the Improvement Kata?

  Appendix 2. Process Analysis

  Bibliography

  Index

  Foreword

  Mike Rother’s Toyota Kata is a rare and exciting event — a book that casts entirely new light on a much heralded set of management practices, giving those practices new significance and power. Countless people in the past 20 or more years have studied and written about Toyota’s wildly successful management thinking and practice. But paradoxically, despite the vast amount of knowledge presented in these works, no organization outside Toyota’s family of companies has ever come close to matching Toyota’s stellar performance. There is a widespread feeling that something Toyota does is still not understood and put into practice by non-Toyota companies.

  Toyota Kata will change all that. In this book, Mike Rother penetrates Toyota’s management methods to a depth never before reached. In doing so, he offers a set of new ideas and practices that enables any organization, in any business, to do what it takes to match Toyota’s performance.

  This is not the first book in which Mike Rother presents path-breaking insights into Toyota. He advanced the business world’s understanding of Toyota’s methods light-years in his 1998 book Learning to See, coauthored with John Shook. A brief look at the message of Learning to See explains how Toyota Kata advances that understanding yet another order of magnitude.1

  Learning to See describes and explains a mapping tool Toyota uses to “see” how work moves from the start of production to delivering finished product to the ultimate customer. Known inside Toyota as “material and information flow mapping,” Rother, Shook, and publisher Jim Womack renamed Toyota’s tool “value-stream mapping” and explained it for the first time in their book. Thanks to the enormous success of Learning to See, value-stream mapping became one of the most widely used tools to teach and practice Toyota’s vaunted production system.

  With the value-stream mapping tool, Rother and Shook show how to use many of Toyota’s well-known techniques systematically to change a conventional batch-oriented mass-production factory flow — replete with countless interruptions and massive delays—into a flow resembling what one finds in a typical Toyota factory. Familiar names for some of these techniques are takt time, andon, kanban, heijunka, and jidoka. For most students of Toyota, Learning to See was the first extensive and clear explanation into how to use Toyota’s techniques to improve across an entire facility.

  That book, however, does not explore why and how these techniques evolved, and continue to evolve, at Toyota. Although Learning to See provides a monumental step forward in understanding how Toyota achieved the remarkable results it has enjoyed for over 50 years, it does not reveal why others, after implementing Toyota-style techniques, still seem unable to emulate Toyota’s performance. How does Toyota develop its solutions? What specific process do they use? Now, in Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results, Mike Rother shows us this next vital layer of Toyota practice.

  The central message of Toyota Kata is to des
cribe and explain Toyota’s process for managing people. Rother sets forth with great clarity and detail Toyota’s unique improvement and leadership routines, or kata, by which Toyota achieves sustained competitive advantage. The transformative insight in Toyota Kata is that Toyota’s “improvement kata” and “coaching kata” both transcend the results-oriented level of thinking inherent in the management methods still used in most companies in the Western world.

  The findings in Toyota Kata confirm my own interpretation of what I observed so often in Toyota operations since my first study mission to Toyota’s giant facility (TMMK) in Georgetown, Kentucky, in 1992.2 What distinguishes Toyota’s practices from those observed in American and other Western companies is their focus on what I call “managing by means,” or MBM, rather than “managing by results,” or MBR. 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.

  In this era, business organizations also have a great influence on the nature of society. How these organizations operate and, especially, the ways of thinking and acting they teach their members define not only the organizations’ success but great swaths of our social fabric as well. While a rapid advance of knowledge about human behavior is now under way, those scientific findings are still too far removed from the day-to-day operation of our companies. Business organizations cannot yet access and use them to their benefit in practical ways. Because Toyota Kata is about developing new patterns of thinking and behavior in organizations, it provides a means for science to find application in our everyday lives. The potential is to reach new levels of performance in human endeavor by adopting more effective ways of working, and of working together.

  In my opinion, the greatest change Mike Rother’s Toyota Kata can bring to the non-Toyota business world is to replace traditional financial-results-driven management thinking with an understanding that outstanding financial results and long-term organization survival follow best from continuous and robust process improvement and adaptation —not from driving people to achieve financial targets without regard for how their actions affect processes. What has prevented this change from happening before now is the lack of a clear and comprehensive explanation of how continuous improvement and adaptation occur in Toyota, the only company I know in the world that truly manages by means, not by results. That explanation is now available to anyone who studies Mike Rother’s findings and message in Toyota Kata.

  H. Thomas Johnson

  Portland, Oregon

  Spring 2009

  Notes

  1 Mike Rother and John Shook, Learning to See: Value Stream Mapping to Add Value and Eliminate Muda (Cambridge, Massachusetts: Lean Enterprise Institute, 1998).

  2 I recount my findings from these study missions in Chapter 3 and other parts of H. Thomas Johnson and Anders Broms, Profit Beyond Measure: Extraordinary Results Through Attention to Process and People (New York: The Free Press, 2000; and London: Nicholas Brealey Publishing, 2000 and 2008).

  Acknowledgments

  Thank you to the many dozens of people who have given me access to their companies and factories, who worked with me or in parallel in testing ideas, engaged in discussion about what we were learning, critiqued my thoughts, and were happy to keep going.

  This book also reflects an ongoing dialogue with an ardent group of fellow experimenters, whom I count as colleagues, mentors, and friends. Thank you to: John Shook (who was coincidentally preparing a book on a related topic), Professor H. Thomas Johnson (Portland State University), Dr. Ralph Richter (Robert Bosch GmbH), Gerd Aulinger (Festool), Jim Huntzinger, Professor Jochen Deuse (Technical University Dortmund), Dr. Andreas Ritzenhoff and Dr. Lutz Engel (Seidel GmbH & Co. KG), Tom Burke and Jeff Uitenbroek (Modine Manufacturing Company), and Keith Allman (Delta Faucet Company).

  Thank you also to a few exceptional people who over the years have given me support, input, or guidance that opened doors, moved my horizons, and created new possibilities: my wife, Liz Rother, Dr. Jim Womack (Lean Enterprise Institute), Professor Daniel T. Jones (Lean Enterprise Academy), Mr. Kiyoshi Suzaki, Professor Jeffrey Liker (University of Michigan), and my daughters, Grace and Olivia.

  And, last but not least, a deep bow to Toyota for giving us such an interesting subject about which to learn.

  Introduction: Transforming Our Understanding of Leadership and Management

  Imagine you have a way of managing that generates initiative among everyone in the organization to adapt, improve, and keep the organization moving forward. Imagine that although this method is different from how we currently manage, it is ultimately not difficult to understand. That is the subject of this book, which describes a way of bringing an organization to the top, and keeping it there, by influencing how everyone in it, yourself included, thinks, acts, and reacts.

  In many organizations there is an unspoken frustration because of a gap between desired results and what really happens. Targets are set, but they are not reached. Change does not take place.

  The music industry’s major labels, for example, were broadsided by digital music downloads, even though the widespread popularity of compiling homemade mix cassettes, starting over 30 years ago, indicated that the market was there. For several decades Detroit’s automakers chose not to focus on developing smaller, more efficient vehicles for their product portfolios, despite repeated signals since the 1970s that there was a growing market for them. More recently, PC industry giants were late to develop compact, Internet-oriented laptops tailored for Web surfing, e-mail, sharing photos, downloading music, and watching videos, even though many people, sitting in plain view in coffeeshops, use their laptop primarily for these tasks.

  Our reaction to the fate of the music industry, the automakers, the PC companies, and hundreds of organizations like them is predictable: we blame an organization’s failure to adapt on poor decision making by managers and leaders, and we may even call for those leaders to be replaced. Yet can there really be so many managers and leaders who themselves are the problem? Is that the root cause? I can assure you that we are on the wrong path with from-the-hip assertions about bad managers, and that hiring new ones, or more MBAs, is not going to solve this problem.

  So what is it that makes organizations fall behind and even totally miss the boat, and what can we do about it? What should we change, and to what should we change it? Once you know the answers to these questions, you will be even more capable of leading and managing people, and of ensuring that your organization will find its way into the future.

  Most companies are led, managed, and populated by thoughtful, hardworking people who want their organization, their team, to succeed. The conclusion has become clear: it is not the people, but rather the prevailing management system within which we work that is a culprit. A problem lies in how we are managing our organizations, and there is a growing consensus that a new approach is needed. But we have not yet seen what that change should be.

  Business authors sometimes suggest that well-established, successful companies decline, while newer companies do well, because the new companies are not encumbered by an earlier, outmoded way of thinking. On the surface that may seem true, but the important lesson actually lies one step deeper. The problem is not that a company’s thinking is old, but that its thinking does not incorporate constant improvement and adaptation.

  Drawing on my research about Toyota, I offer you a means for managing people, for how leaders can conduct themselves, that is demonstrably superior to how we currently go about it. I am writing for anyone who is searching for a way to lead, manage, and develop people that produces improvement, adaptiveness, and superior results. You may be an experienced manager, executive, engineer, or perhaps you are just starting to learn about or practice management. Your organization may have only a few people or it may h
ave thousands. You are successful, but you want to be better and still relevant tomorrow.

  With that in mind, here is my definition of management:

  The systematic pursuit of desired conditions by utilizing human capabilities in a concerted way.

  Since we cannot know the future, it is impossible to say what sort of management systems we will be using then. However, precisely because we cannot see ahead we can argue the following: that an effective management system will be one that keeps an organization adjusting to unpredictable, dynamic conditions and satisfying customers. Situations may always be different from place to place and time to time, so we cannot specify in advance what should be the content of people’s actions. Leading people to implementing specific solutions such as assembly cells, Six Sigma tools, kanban, diesel or hybrid power trains, today’s high-margin product, and so on will not make an organization adaptive and continuously improving. Of greater interest is how people can sense and understand a situation, and react to it in a way that moves the organization forward.

  One of the best examples we currently have of an adaptive, continuously improving company is Toyota. Of course, Toyota makes mistakes too, but so far no other company seems to improve and adapt—every day in all processes—as systematically, effectively, and continuously. Few companies achieve so many ambitious objectives, usually on time and within budget.

  How Does Toyota Do It?

  We have known for a long while that Toyota does something that makes it more capable of continuously improving than other companies, and by now we have recognized that it lies in its management approach. But how Toyota manages from day to day and thereby embeds continuous improvement and adaptation into and across the organization has not yet been explained.