Transcript of Podcast #142 – @EricRies on Taiichi Ohno & #LeanStartup

Here is a transcript of last week’s podcast with Eric Ries talking about the impact that Toyota legend Taiichi Ohno had on his work and the Lean Startup movement. This discussion took place just after the 100th anniversary of Mr. Ohno’s birth. Read and listen to reflections from others, including Norman Bodek and Sami Bahri DDS.

You can also now buy an eBook that contains some of my favorite podcast transcripts (including this one), via

LeanBlog Podcast #142 Transcript – Eric Ries

Announcer:  Welcome to the LeanBlog Podcast. Visit our website at Now here is your host Mark Graban.

Mark Graban:  Hi, this is Mark Graban. Welcome to podcast 142 for March 14th, 2012. We have a great guest today, he is Eric Ries, the author of the book The Lean Startup. He was previously a guest on episode 115 which you can access by going to or you can find it through iTunes and the other podcast directories. Today we are going to be talking about Eric’s reflections on the work of the great Taiichi Ohno. One of the fathers of the Toyota production system. Just two weeks back or so would have been the 100th anniversary of his birth. Eric is joining us as Norman Bodeck did in the last podcast episode 140 to share how Mr. Ohno’s work impacted him and helped in his development of the lean startup methodology. As always we want to thank you for listening.

Well, joining us again is Eric Ries, the author of the book The Lean Startup, thanks for joining us Eric.

Eric Ries:  Thanks for having me.

Mark:  As we’re just passed what would’ve been the one 100th birthday of Taiichi Ohno, one of the fathers of the Toyota production system. I wanted to get your thoughts because you cite Mr. Ohno a few times in your book and I’m curious how did you get introduced to his work and how did he influence you.

Eric:  It has been incredibly influential, I think I would go so far as to say it has changed my life. It’s actually just a coincidence, it’s a funny thing how these things work. To just set the stage a little bit I had founded a company called IMVU in 2004 and I was really into a lot of the ideas that are called agile software development which have their origins in lean. But a lot of the works I had read about them Toyota was not specifically mentioned, lean principles were not mentioned, so I didn’t know the theory of a lean or anything like that. I knew nothing about manufacturing. I have actually to be totally honest never set foot in a manufacturing plant in my whole life.

I had no idea at any of that would be relevant to me. But I had this intuition that we should be going a lot faster in a startup and doing practices that even in the agile world were considered a little bit extreme. We’ve had the chance to talk about them on other occasions things like continuous deployment really putting software customers hands much faster than was previously considered possible.

I had this problem which was, I had no way to explain to anybody why that was going to work. People were looking at me like I was completely crazy. I could see that it was working because I was very stubborn and I had this intuition. I said we’re going to do it no matter what.

It was working, we’re always hiring new employees, the company’s growing, we’re bringing on investors. We had investors that when they were doing their due diligence for the company pulled out because they didn’t like the answers I was giving them about how we built the technology.

They would bring their experts in, experts trained in more traditional software development methodology. They’d be like this kid is crazy, he doesn’t know what he’s talking about this is not the way it’s done. It was a continuous point of stress for me and my co‒founder, OK.

You have to remember at the time I was by far the youngest person on the team and I was often younger than the employees I was hiring and training in them in this method. It’s not like it was this easy situation to be in but I really believed it was right.

So I was reading everything I could get my hands on for ideas about first of all was I actually right or was it a fluke? If that was right how could I possibly explain it? I had read some cases about Toyota, business school cases so I was a little bit familiar with that. There was this thing called Toyota Production System that’s all I knew and I figured I should be educated about it.

I go on Amazon and I type in “Toyota Production System” and lo and behold this book by Taiichi Ohno comes up called Toyota Production System. I said perfect, it must be the definitive guide. Toyota Production System, I got this book and I’m holding in my hand right now. I found my copy.

You’ve read the book, it is a very wise, very humane philosophical treatise on how to run a business. As a practical manual for setting up a factory or doing any other task it is not exactly your step by step guide. I remember just having this feeling that I was reading something crazy.

It is kind of like Zen mumbo jumbo about auto‒nomination and automation with a human touch and all this stuff. But there is that one passage about about five whys in there and just all the sudden for me for what ever reason that little section where he talks about trying to get to the root cause of problems by just asking why.

He has a few examples, things that I don’t even know what they are. A machine with a strainer it incorrectly attached. I have no idea what that looks like, never seen a machine strainer my whole life. But somehow his their humble, very analytical approach was like a lightning bolt to me.

I said, “Oh, I can do that. That is going to solve a huge class of problems that I have in my life where I’m constantly fighting with people about how much prevention…” When something goes wrong do we the person, do we blame the computer, do we fix just that problem, do we try and solve that whole class of problems?

That was super helpful. That was one of the very first times I’ve learned to see the work that I was doing in the management as a system that needed engineering and debugging just like the software I was used to writing.

Mark:  So the ideas of the five whys being so impactful and you expand on this in The Lean Startup and everything you’re teaching, did that become a helpful reference point to talk about Ohno and Toyota? I mean, how did people in software companies or startups react? “Oh, here goes Eric talking about this Toyota guy.”

Eric:  You’ve got it exactly right. People were looking at me like I was completely nuts. To be totally fair it’s of course not just Ohno’s book but a lot of others that were very helpful. I didn’t really make a lot of progress, I got to mention about the five whys but that was as far as I got until I read Lean Thinking and that series of books. The Mission That Changed The World, the books that have been specifically written for American managers breaking it down in a lot more detail and putting it together not in the Zen style but in a much more western analytical style. Even then, a lot of people would come to me with a software problem and I would start talking about batch sizes and die stamping and stuff.

But of course you got to remember my ability to explain die stamping machine is limited, I’ve never seen one and I don’t really understand what it does. A funny thing that happened to me was after that… we were able to get really clear by changing batch size, by doing five whys especially, and by adapting some of these practices.

It was later that I came to really appreciate that I had started with Ohno’s book. It almost felt like I went back and I read it again and again I felt like I had his voice in my head in a lot of situations where my first instinct would be to blame somebody or to not go and investigate something for myself but just assume that somebody else had it figured out.

The idea that your organization has an autonomic nervous system, that it needs to be able to do the right thing automatically without people having to expend heroic effort. Those kinds of ideas, that philosophical approach it was just there with me all the time.

When you reached out to do this and celebrate his 100th anniversary I thought what an awesome opportunity to reflect on just the wisdom that he represented.

Mark:  Yeah, I know it is something I’ve learned a great deal from. Sami Bahri who a fantastic dentist in Jacksonville, Florida is a similar pioneer to the work you’ve done, Eric, because he wanted to apply this idea of lean to his dental practice. He didn’t have a book to go read about lean and dentistry. He went and he read the books by Ohno, and Shingo, and Womack, and others. He very had to kind of synthesize his own approach that would make sense. But it is really fascinating to see that Mr. Ohno’s work has touch people in different industries, including yourself.

Eric:  I’m just flipping through the book as you are talking too because I am remembering his simple formula. Something like present capacity equals work plus waste. You’re like “well duh”, but no not “duh”. If you’ve never thought to think of the system in that specific way I don’t think there is anything intuitive about it. I don’t know anybody who would can frame that as a matter of intuition. But once you have that framing in your mind you cannot, it is a testament to what a good idea it is you cannot let it go. You can’t see any work…

I went through a phase where my family was sick and tired of it because we couldn’t go to a restaurant without me being like, “Wait a minute, they should be using [unintelligible 00:09:57] on the line with gravy. What are they doing?” Grocery store analysis and all this stuff but it changes your sense of what is intuitive and what actually makes sense.

I am kind of looking forward to reading this again. I feel like I am going to go back and see what other wisdom I haven’t yet come to understand.

Mark:  Well, it is definitely fun to go back and revisit. I would love to help fix that problem that you have never visited a factory Eric. Maybe we can line something up, we can find a sponsor in your neighborhood or if you are back in Texas let’s go down to the Toyota San Antonio plant.

Eric:  I would love to do that sometime.

Mark:  Give you some context for what you’ve read and hopefully will be rereading.

Eric:  Yes. Would love to do that.

Mark:  Well, I want to thank you. Thanks a lot Eric for sharing some of your recollections and thoughts here as we celebrate what Mr. Ohno brought to the world and to what we would call the lean or and now through your work and others the lean startup methodology. Thanks for taking the time to talk about that today.

Eric:  No, I appreciate it. I feel honored to even be in the same kind of chain of thinking as them. Thank you for your leadership in this issue and thanks for your support.

Mark:  Thank you.

Announcer:  Thanks for listening. This has been the LeanBlog Podcast. For lean news and commentary updated daily visit If you have any questions or comments about this podcast email Mark at [email protected]

Transcription by CastingWords

About Mark Graban’s passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all.
Mark is a consultant, author, and speaker in the “Lean healthcare” methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. Mark is also the
VP of Customer Success for the technology company KaiNexus.

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