Interview with Jeff Liker On The Second Edition Of “The Toyota Way”

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My guest for Episode #400 is Jeffrey Liker, the retired University of Michigan professor who has recently released the second updated and revised version of his seminal book The Toyota Way14 Management Principles from the World's Greatest Manufacturer. The new edition has more examples from the service sector, including healthcare, and it incorporates “Toyota Kata” approaches (and he credits his former student Mike Rother).

Today, we talk about why he wrote a new edition and what he's learned since the publication of the original back in 2004. We talk about combining the perspectives of industrial engineering and sociology — the mechanistic vs. the organic views of a system like Lean/TPS. What is “coercive bureaucracy” vs. “enabling bureaucracy”? What's the difference between “being Toyota” and “emulating Toyota”?

We also learn a little bit about the musical instrument that Jeff has started playing again. We need to form a Lean band! Maybe not.

The podcast is sponsored by Stiles Associates, now in their 30th year of business. They are the go-to Lean recruiting firm serving the manufacturing, private equity and healthcare industries. Learn more.

This podcast is part of the #LeanCommunicators network

You can listen to the audio or watch the video, below. I hope you enjoy the discussion. Jeff was previously a guest on episodes 34373941, and 111.



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Jeff Liker On The Second Edition Of “The Toyota Way”

LBI Jeff Liker | The Toyota Way

Welcome to episode 400 of the show. That is a big, huge round number. Four hundred episodes since the launch in July 2006. Episode 1 back then, of course, featured Norman Bodek. It's bittersweet to think back to that. This show was Norman's idea. He passed away, but I'm glad that we have all of the episodes with Norman. I'm glad that we have had episodes with so many great guests over the years.

One of those guests who joined us a lot in the earlier days of the show is back with us in this episode. He is Jeffrey Liker. He is a retired professor from the University of Michigan. He's the author of the second edition now of his seminal book, The Toyota Way. That's the opportunity for us to have the conversation here in this episode.

I love doing this show. At this pace, I will be at episode 500. We'll have to do a big celebration for that. I will probably be at that point in another 3 or 4 years. There's a lot to look forward to. There's a lot to be thankful for. You, the reader, are part of this. I do appreciate that I'm able to share these conversations with you. I'd also like to mention that this podcast is part of a new collaboration. It's an informal group we call the Lean Communicators Network. You can learn more about all of our shows at www.LeanCommunicators.com. Thanks for checking it out.

I'm excited that we're joined again by Jeff Liker. You know him I'm sure from The Toyota Way and that series of books. I have the new and revised second edition. We're going to be talking about that. Jeff, thank you so much for being here.

Thanks for having me, Mark.

I'm glad the book created an opportunity to talk again. It's been a while. Before talking about the book, I want to say congratulations on your retirement from the university.

I thought you were talking about the book.

Congratulations on the book, but congratulations on retirement.

The retirement's been a while. It was about five years ago.

We haven't talked in a while. That doesn't feel new at all.

It's not to me.

Even with retiring from the university, I see you still have the black M on your polo over there.

Our basketball team is playing tonight and even though I'm sitting at home with my wife, I got my gear on.

A quick personal sidetrack here, do you go to a lot of games normally?

I go to all the football games. I go to some of the basketball games when I can. Now I can't, but when I can. It's fun to go to particularly the basketball games. What's nice is they're relatively easy to get in and out. It's only a couple of hours rather than a half-day commitment.

There are far fewer people than the big house. I've seen games in both venues. I've seen the basketball team beat my Northwestern Wildcats a lot. I saw that on TV the other day and it's still surprising to me victory on the football field there in Ann Arbor.

It's becoming more surprising these days.

What have you been doing other than working on the second edition of The Toyota Way? You're still keeping busy. What are you doing?

LBI Jeff Liker | The Toyota Way
The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer

I have two hobbies that selected me. One of them is classical guitar. I started playing the guitar when I was thirteen. I played rock and folk. I did that until I was 29 and became an assistant professor at Michigan and then I stopped cold turkey for 30 years. For the last several years, I've been taking classical guitar lessons every week, and I practice every day. That is one thing. That gets my psychomotor skills used. You don't get that much of that typing on a book.

The second thing using more of my motor skills. It is golf. I started playing that many years ago because of my son. By the time he was 8 or 10, he wanted to be an avid golfer. I had to figure out where there was a golf course in Michigan and what it looked like and how you walk onto it because I'd never been on one. He got on the golf team and then he was pretty serious about it but for me, it was a hobby and I'm probably more obsessed with it than he is now.

I was wondering. Golf wasn't part of the strategy for networking with the Toyota executives?

They're usually too good for me.

For something like playing the guitar, did that come back to you pretty quickly or was that relearning again?

If I played golf for ten years when I was young and then stopped for 30 years, I would be better than I am now playing every week for the last twenty years. Unfortunately, we don't learn as quickly and as easily as we get older. If you have the advantage, kids that hated to play the piano, but had to play it when they were young have now the capability to learn it when they're adults. At some point, many people are so happy that their parents made them learn piano when they're young.

It is like learning a language and I'm going to reach over here. It's not quite the same, but I've got a pair of drumsticks in the office. I'd given this up cold turkey for a while, but in recent years, I've surprised myself with that muscle memory and ability come back pretty quickly. When I was a kid growing up, I used to take lessons from a University of Michigan graduate student. He was getting his Master's degree in Percussion. That's where I learned I didn't want to be a professional musician because I learned from him how much time you spend in a practice room all by yourself.

It's very exciting when you're on stage, but that's rare. My guitar teacher gave me a little book that was how to practice guitar and every instrument has a little book like that that teaches you how to practice. That's one of the things that even after over ten years, I'm going to have a lesson Monday, and I'm sure at some point, my teacher's going to say, “Remember how we learned to practice,” because we'll see him making mistakes and he'll teach me once again how to practice. That fits with some of what I wrote in the new The Toyota Way.

I was thinking that's a good segue to talk about the book, learning, and practicing when it comes to scientific thinking and other practices and principles. First off, I was curious, Jeff. At a high level, why do an updated second edition? Maybe the publisher asked you to.

That didn't happen, but you can imagine, I wrote this over fifteen years ago. You can imagine, I might look back and say, “Why did I say that?” That didn't happen so much but what happened was I learned more and put more flesh on the bones. Also, at the time I wrote the book, I had less experience practicing lean, particularly in different environments. Early on, I was doing work with auto companies, particularly Ford.

I learned a lot about automotive, which is somewhat of a peculiar business with all the manual labor in an auto plant. I started to branch out and I got opportunities in shipbuilding and in iron ore mining, finance, and healthcare. As I got broader experience, it broadened my view of how you use the tools of lean and how they apply. I had more examples.

In the original book, what I was trying to do was to take Toyota as a case example. The book wasn't intended to be an analysis like a journalist would do of Toyota that says, “Here are its strengths. Here are its weaknesses,” but rather pulling out best practices and pulling out exemplars that can be used as a model and turning it into principles. The principles are based on I have a Bachelor's degree in Industrial Engineering, and I have a PhD in sociology.

I taught Organizational Behavior when I first got to Michigan for years. I was tying it into a lot of bodies of knowledge and what Toyota did and say, “That relates to this Theory of Motivation.” Toyota seems to have some depth of understanding that they got through their folk wisdom and experience that is missing in this body of literature by academics.

This interplay between the academic world, theory, and practice led to these principles. As I read more and learned more and branched out into new directions in my research, I could relate different ideas like, for example, Mike Rother's Toyota Kata. It wasn't only Toyota Kata, but Mike was one of my students at Michigan. He was a Master's student and because he got interested in this kata, he had done a lot of research in different areas.

LBI Jeff Liker | The Toyota Way
Toyota Kata

For example, he was interested in how people learn and how people develop and their thinking skills. We talked about lean thinking. Toyota talked about scientific thinking from the beginning, and how do you acquire that? That led to studying neuroscience and cognitive psychology. He would send me an email saying, “You should read this.”

I read a bunch of stuff that I hadn't read at all ever and some things I reread. I was able to relate to those. It was clear that there was more to say and that there was a somewhat different perspective to put this into. It was accumulating and I hit the breaking point. It went over the edge where there was enough news to say that I thought it might be worth revision. I was nervous about it because the book was sold so well and was read by so many people. People call it a classic, and how do you improve on a classic? I felt it was a little bit risky, but I had learned enough that I thought it was worth it.

With a traditional book and a printed book, there are no opportunities for small kaizen. You've got to come at it as a fairly big batch. We dive into some different details around what you said there. For one, it's an interesting reminder or some people reading might not know that you have a background in both industrial engineering and sociology and that you are combining those educations and experiences in your head.

Personally, I found it interesting to try to learn more from lean authors or others in the community that do have social science backgrounds like David Mann in Western Michigan who has a background in social sciences, and others that I've learned. That does start flushing out and I was going to ask you maybe to elaborate as you are touching on the book, mechanistic versus organic views.

That goes back to at least the 1940s as a distinction. You can also find it in Robert Kahn's book The Social Psychology of Organizations. We talked about systems thinking and it links it back to Bertalanffy, who was one of the biologists who introduced the idea of General Systems Theory. There are a lot of different biases of knowledge that go back a long way. The distinction between mechanistic and organic was presented more as a dichotomy. It's a little more complicated than that but mechanistic means we look at the organization as if it's a machine and a machine has fixed parts and they function in a certain way.

LBI Jeff Liker | The Toyota Way
The Social Psychology of Organizations

If you want to improve the machine, you can clean the parts and replace the parts but if you want to get a big improvement, you have to change the parts or change the fundamental design of the machine. If you're thinking about the organization like a machine, you're thinking, “How does it function now? What's the next design change I can make to make it function at a higher level?”

The assumption is once you make the design change, you figure out the parameters and the specifications. You can implement that in the same way, wherever that organization is, whatever culture it has and it should work in the same way. We had a coffee maker go and if you get a replacement part for the coffee maker, you don't expect it to act differently than the original part, but in an organization, replacing a part could make the organization act very differently. That's the organic point of view, which sees organizations of biological systems.

You then have these crazy things called humans that you never can predict what they're going to do. That ends up leading to a lot of interaction between the parts and a lot of uncertainty because you can't predict now what's going to happen in the future. Also, recognizing that the external environment plays a big role and that there are a lot of feedback loops. From a linear point of view, if you do something, you expect a result. “If I implement this, I get this benefit. It needs my ROI targets.”

That doesn't make sense within a complex system. As you look at, “This is a living complex system,” it changes the game. Now, you have to think about evolving and experimenting to see what happens. You don't know exactly what's going to happen. You need to think about continuous improvement because things are changing all the time. It gives you a very dynamic view of the organization and changing the organization, which turns out from basic folk wisdom in Toyota, they called it the Toyota production system.

They'll say it's a system and the parts are related to each other and we have to try. That's about as theoretical as they want to get, but what they're saying is if you look at these simple statements that they make based on experience, it's quite profound in leading to a very different view of the organization and how you improve it.

We maybe extend some of that analogy. I've heard sometimes people talk about if you try to introduce something new to an organization and there can be antibodies that kick in or you can think of the idea of an organ transplant, how a new body can reject an organ that was perfectly good in somebody else.

Those are the kinds of analogies you can make. The mechanistic organic is very extreme. In the original organizational design writings, they were saying, “If the tests are fairly predictable and routine, then a mechanistic organization is much more efficient and works well. If the work of the organization is new and innovative, you're creating like in design, then the organization should be organized more organically.

If tests are fairly predictable and routine, a mechanistic organization is more efficient and works well. If it is new and innovative, the organization should be organized more organically. Click To Tweet

There's that distinction. In that writing, if you look at a factory, the assumption is that almost all the work is very routine so therefore, it works best when you have a bureaucratic organization. Toyota confused things a bit because they are very bureaucratic and they have rules and procedures and all the defining features of bureaucracy are part of Toyota factories. They have rules for everything and yet, there's a lot of employee engagement involvement. There's continuous improvement.

It's a very dynamic environment, and therefore, they seem to look organically, you look from one point of view and then mechanistic from another point of view. That led, Paul Adler, who was a professor at the University of Southern California to question this dichotomy. Instead of 2 types, he came up with 4 types. At one extreme was the pure mechanistic bureaucracy, which he called coercive where it's the managers and engineers who decide things, and then the workers obey, like Frederick Taylor on scientific management.

The other extreme was the organic organization that has very few rules, but then in between, he called what he saw at Toyota enabling bureaucracy. He said that there are rules and procedures, but there are tools to be used by the people doing the work and the people who lead them to enable them to better do the work.

There are more guidelines that can be used to improve the work, rather than rigid procedures that need to be followed. That's where I come out in the preface. Mostly, what we're doing with lean is introducing enabling bureaucracy. It was simply a matter of saying, “Mechanistic is bad, organic is good,” then there's no real need for all these procedures and standards we put in place.

Maybe we can talk a little bit about healthcare first. One of the differences in the book is you have examples from service industries including healthcare. What I was going to ask is in healthcare, one of the organizational antibodies that comes up, you get me thinking about how we want to emulate Toyota and talk about elements of enabling bureaucracy.

I'm generalizing, but a lot of health systems traditionally have been a coercive bureaucracy environment with pockets of complete freedom to do whatever you want if you're in certain professional classes. You talk about having more experience with the practice. Have you gotten better at trying to navigate some of that? How does a health system embrace something when they hear bureaucracy and they have this reflex of saying, “No. Bureaucracy is bad because it's coercive?”

Every organization has the ability to reject new ideas and say, “That doesn't work for us. We're different.” Every organization at some point seems to do that, whatever the industry. Healthcare has a lot of highly educated professionals. The nurses are not powerful compared to doctors, but they're extremely well-educated compared to the general population. They can resist in an articulate way, but for some reason, even educated people seem to define the world in black-and-white terms.

Standardization is bad. This came from Toyota. Toyota's mainly interested in productivity and producing widgets. We're trying to save lives. We're concerned about health and safety, therefore, they're so different we can't learn anything from that. However, what you see in hot healthcare are a lot of rules and procedures. They're extremely bureaucratic, as you said, and it seems like it's bureaucracy gone wild and often bureaucracy without a purpose.

From the experience of people in the healthcare system, more rules mean more constraints. “I'm handcuffed and I can't do my job,” whereas in this enabling bureaucracy idea, which is a little bit hard to understand, the bureaucracy serves a purpose, and if it doesn't, you get rid of it. Even the doctors have all sorts of constraints, and they're very concerned about getting sued, but then they introduced what is called the best practices of surgical procedures. It's science-based medicine.

They usually say evidence-based.

It's evidence-based medicine, and everybody agrees that having medicine based on data and evidence and best practices would be a good thing. That gets turned in healthcare into this mindless bureaucratic system where people in the government are creating procedures and saying, “You should use this.” Doctors are saying, “I have a better way.”

That's much more like a coercive bureaucracy trying to impose that on doctors who are the freest and have the most power. If somebody doesn't understand lean and they have a superficial understanding, and then they're trying to make standardized work in every place, including with doctors, they're going to get kicked out. They won't last. It takes a more sophisticated approach. What I've discovered is that in the lean world, the best lean consultants have often learned from industry and manufacturing, but have developed the ability to rise above that. Also, adapt what they've learned to new situations like in the different parts of healthcare.

There are parts of healthcare that are very routine like in the test labs. A lot of what the pharmacists do and what are these moving things about. There are parts that are very organic that need to be very creative. A person who understands lean deeply will understand the situation and figure out how to apply it in an appropriate way for the situation and explain it to the people in an appropriate way for the situation. That to me is the difference between somebody who's only mindlessly applying tools and somebody who understands the principles and then applies them in a flexible way. The person who's thinking and applying in a flexible way is always learning new things.

A person who understands lean deeply will understand the situation and figure out how to apply it in an appropriate way for everyone. Click To Tweet

As you've demonstrated with updating the book and being willing to do that, for what it's worth, I was going to say, it's great to see because as you said, the book has been a bestseller. I consider it a seminal work in the field. It would probably be hard to admit that it could be better or words like expert and guru get thrown around. The humility to say, as you were saying in the preface, filling in gaps in your knowledge. That's a great example.

Thank you. I appreciate that. It was a little bit humbling to have my former student, Mike Rother teaching me. I resisted a bit at first, but I found that I had a lot to learn.

We'll come back and I want to talk more about Toyota Kata and what you've learned from Mike. Again, it's great that you've incorporated that, but I wanted to talk about healthcare more. That's what I've been swimming in the last many years. You touched on a lot of things that trigger different questions or thoughts.

For one, talking about the weird different-ism. That's true, but I try to guard against the leap then people say, “We're different, so therefore it doesn't apply.” However, when things are brought into principles, for example, I helped lead a book study at the laboratory at Children's Health Dallas of the first edition of The Toyota Way.

Different people from the lab would take a chapter, and have a typical book study format of discussing not just, “What did you learn from the book?” but then the question and the laboratory directors were helping drive this conversation. We've learned about Toyota and these principles. How does that apply to us? That was an incredibly helpful conversation to get that discussion going. A lot of times in healthcare, people might be tempted to say, “I'm going to go visit some other hospital and copy what their hospital did.” In terms of what their lab did to be a “lean” lab, they were trying to avoid that trap.

That's good because in some ways, having a model that's totally different from you is a good thing because it might reduce the inclination to just copy. Also, I make it clearer in this version of the book than the last that the goal is not to copy Toyota or anybody but to evolve your own system. Also, you can't because if you think from a systems' point of view, you're starting at a totally different place and you are unique, not just because you're in healthcare, but because you're in this children's hospital in the Los Angeles area or wherever it is.

LBI Jeff Liker | The Toyota Way
The Toyota Way: Having a model that is totally different from you is a good thing. It might reduce the inclination to just copy.

Every hospital is different and has unique clientele and backgrounds of people that are in the hospital and the unique history and leadership. Every hospital is different. Every department in the hospital is different from every other department. One of the interesting things about Toyota that surprises people is that if you go into a Toyota factory in Kentucky and then you go to one in the United Kingdom and one in France, and one in Poland, they're not all the same.

Toyota and the Toyota experts in Japan don't try to make them look the same. They won't see a best practice in Kentucky and say, “This is great. Now, everybody has to use this.” They might try to make the information available, but if you were in Poland and you looked at Kentucky and said, “This is cool. They're doing this. I should do it,” your sensei is likely to say, “Why? Why would you do that?”

If you explain why and you have a reasonable explanation, then they'd say, “That's why. What you're trying to do is you're trying to improve the standard work and how it's being updated.” You now have an idea from Kentucky, but maybe you can improve upon it and find a better way. They're encouraging you to think, experiment, and learn. When you copy, you don't do any of those things.

When I used to live in San Antonio, I had maybe 5 or 6 opportunities to take students from the Master of Healthcare Administration Program there at Trinity University and other healthcare professionals from related quality improvement circles. We would go tour the Toyota plant. Going through the plant, even within that same plant, you can see clearly in even different zones of the assembly line, it looks like they have different mechanisms for how they're tracking and managing improvement ideas.

They don't have copycat bulletin and boards. Some places might have what looks like a giant whiteboard-type A3. Some people have what you might call a punch list that you might see in any factory, whether it's a lean or not. That's interesting to see where I'm sure the thought process is more similar. They're avoiding the situation I've seen in healthcare of, “We visited hospital X and they have these boards and they were great. I took a picture of the board.” We've then put up 50 boards throughout the hospital. What would your hypothesis be about what might happen then?

My hypothesis would be that you'd have a lot of boards that look the same and that wouldn't translate into necessarily any effective practices at all.

That happens a lot or the board doesn't get used at all.

I tell a story, which is in the original book. The good examples I kept in my new book, but one of the examples was a guy who was in a supplier plant in Chicago. They're a smaller supplier and they were trying to win more to add a business. They're very excited that somebody from Toyota had come out to the plant, a Japanese guy. They were trying to be at their best.

One of the things that they had worked on, the Japanese guy had suggested that they have something like Andon. How do you know when there's a deviation from the standard? They do their homework and they learn about Andon. In the whole system, it's lighting, but it's hooked up through numerically controlled devices. You pull the cord and it moves to a certain fixed position and then stops automatically. It then keeps records of every time it stops.

It's fairly expensive so you can spend easily $500,000 on a full Andon system. They bite the bullet. They put in this elaborated Andon system, and they're very proud that they made this commitment to lean. The Japanese sensei comes and he looks concerned and not very happy. He says, “Come with me.” He takes the president in his car to a hardware store. He looks around. He finds this place that he is happy with and he grabs a green, a red, and a yellow flag. He hands it to the guy and says, “And done.” The purpose was to say it's not the technology. It's what you do with it. Start with this. If you can't make it work with these three flags, then you can't make it work with anything.

It is not the technology. It is what you do with it. Click To Tweet

There was a story from the BBC going back many years ago, where you think the company would know better. There was a story about a Ford truck plant where they had installed an Andon cord system and the cord was pulled a couple of times a week. This b BBC story compared that to the behavior and the culture in a Toyota plant.

The American auto companies in general, historically, one thing that's going to get you fired for sure is shutting down the assembly line. That carried over. Now, you give people the tools, the Andon and you say, “Pull the cord and you have a problem.” They're like Pavlov's dogs. They're going to cower in the corner because I'm going to get beat up if I pull this cord and they expect somehow that's going to change overnight.

I tell a story in the book about a guy named Mike Brewer who was at General Motors and one of the first about fifteen members who were sent to NUMMI to learn from Toyota. He came back with a pretty deep understanding and then he was eventually responsible for a large part of what they called competitive manufacturing. He would pick a few plants where he personally was a sensei.

In one plant, they had put in that whole fixed position line stop Andon system. It costs him millions of dollars and they were excited about it. The first thing he told him to do is turn it off. Not turn off the whole thing, but turn off the automatic line stop part. You hit a zone and then it stops the line automatically. He gave him a checklist and he said, “Once you've achieved this level of maturity on these ten things, then in that area where they've achieved that maturity, you can turn on the automatic line stopping.”

That maturity included that they had to learn to problem-solve. The Andon system had to be used properly. They had to have decent 5S. They had to have standardized work that was functioning. There was a whole set of things that needed to be functioning as a system with leadership that knew what they were doing and at that point, they were ready for Andon.

We can talk more about scientific thinking and whether are people ready for that. One thing that I saw in the book, you quote Meg Wheatley and I've been a fan of her work. There are these questions about how to help affect change not just trying to copy the tools. I think back to my time at General Motors. I still have this guidebook on the shelf that's 200 pages. This is all the mechanics of stuff that somebody learned from Toyota.

There was nothing in there about how are you going to become more like Toyota. It requires more than painting lines on the floor and doing those easily observed things. Can you talk more about the scientific thinking piece, what you learned from Mike Rother, and what were some of the key insights for you?

In my original book, the fourth P was Problem-solving. For years, I'd been talking to other people and they would always say, it starts with problem-solving. It's all about problem-solving. If you asked, for example, “What kind of Andon system do you prefer?” because there are bunches of different kinds of Andon systems. They would say it depends on the problem. No matter what I asked, the answer was always it depends. What they're saying is what we're trying to do is solve problems, not push tools.

Also, with standardized work, what it does is highlight problems so that people can solve them. They have tons of problem-solving courses. You learn problem-solving when you come in as a new employee but if you've been there for fifteen years, you've probably gone through fifteen problem-solving training courses. Your supervisor is teaching you that all the time. I was familiar with the problem-solving idea.

One thing that surprised me when I talked to Mike is he was criticizing some of the fundamentals of problem-solving, which to me were sacrosanct. For example, you always have to find the root cause and you should always follow these steps and the methods. He criticized the idea of a countermeasure as the way it was used.

What he was criticizing was that almost every company that teaches problem-solving has a problem-solving method that has some number of steps. It could be 6, 7, or 8. Toyota now has an eight-step process called Toyota Business Practices but the steps all follow the Plan-Do-Check-Act and it appears to be very linear.

The planning includes understanding the goals, the condition, the gaps, and the root cause of the gaps, and then you develop your ideas for countermeasures. You then do this by putting the countermeasures in place, then you check to confirm the countermeasures, and maybe make some adjustments and what works, you standardize. One of the things that he noticed when he thought about a scientific approach is that you've essentially, through your countermeasures, developed all your solutions in the planning phase.

You haven't tested them and you have this big batch bundle of solutions that now you're trying to shove into the system in the Do stage. Also, you're committing to these solutions at the point of maximum uncertainty. Since you haven't done anything, you know at the very least, you're going to know at the time you committed to those solutions. He said a more scientific approach is to have a stage where you set goals because that gives you your targets and even a vision of where you want to be.

You look at the current condition and that would be the first time you look at the condition and you'll collect data and you might make a cause-and-effect diagram. There are all sorts of charts you can use to understand the condition. You bounded the problem now. I know where I want to be. I know where I'm at but then from then on, every idea that you have becomes a hypothesis to test.

It is much more effective to guide your direction to have a shorter-term target than a long-term target. That's true from all sorts of things like even sports psychology. Having short-term goals is more effective than long. Long-term goals give you a big direction. He calls the short-term goals the target condition. I know where I want to be a year from now. Where do I want to end up with weeks from now? Now it's more real, but even with that, he doesn't want you to assume that you know the solutions. He wants you to test the solutions and the best way to test the ideas is one at a time.

Having short-term goals is more effective than long. Long-term goals give you a big direction. Click To Tweet

It's to help gauge cause and effect. If somebody's implementing that batch of ideas and they have no interest in evaluating, “It's okay to implement a batch,” when we're being scientific about it.

If you throw enough stuff at the wall, some sticks and you can get improvements that way. We don't necessarily learn a lot and usually, you don't make any further improvements beyond that. You wrap up the project and it was done. Even within Toyota, you'll see a lot of non-scientific problem solving and that was a shock for me because I always looked at Toyota as the model. Over time, I get a little more sophisticated and I was also pushing back a lot on Mike.

A lot of what happens on the shop floor with team members and their team leaders is you pull the Andon. I had a problem. We record that. We look at the end of the day and we see we had this problem four times, so let's work on solving that. We very quickly decide on the root cause and then we very quickly come up with an idea.

If you have an idea, we try it, and we see if it works, but it doesn't look very iterative and you're not doing a very sophisticated job of understanding the root cause and understanding the condition. It's quick and dirty. The reason it can be quick and dirty is because the problem is very clear. We have scratches on this body. Where did it come from? Somebody's belt.

It's a pretty observable cause and effect perhaps.

It would be a waste of a lot of effort to go through an elaborate eight-step problem-solving process for that, and Toyota doesn't. They have a simplified problem-solving process for different levels. Toyota calls that SDCA instead of PDCA where the S stands for Standard. You're starting with the standards. You notice something very specific out of standard and then you're trying to bring it to the standard.

For that, they have a fairly quick and dirty problem-solving method. For the more scientific thinking, even though business practices look linear, what you end up doing is taking a big problem that's unmanageable and you break it into smaller problems. You pick one problem at a time. You set a target for that one sub-problem, you find the root cause for that one sub-problem, and then you're seeing through your solution except that you're doing it in the Gemba and they'll be in a lot of natural iteration.

If you ask people who follow through on a project, did you get all the ideas right in the planning stage? They would just laugh. Of course not. What Mike was highlighting is the iterative nature and the benefit of rapid problem-solving and experimentation. He started using language that was not necessarily Toyota language like experimentation and target conditions. It's the idea of having these shorter-term targets and also, what is the condition I want it to be in? Also, try to overcome obstacles through testing your ideas and when you do a test, ask yourself, “What am I trying to test? What's the idea? What do I expect will happen when I try this out?”

You then run the experiment. What did happen and what did I learn from this? That's PDCA, you could say but it's applied to each individual small little experiment. That's true whether you're trying to achieve a revolutionary new product or a vaccine or it's true if you're trying to make the workplace for one worker more efficient and that in every case, there are going to be lots of things you don't know and a lot of uncertainty.

The way to learn and he talks about learning with a flashlight. You can only see so far with the flashlight. When you learn more, you can move to a new place and you can see more with a flashlight and learn with a compass rather than a roadmap. It gives you a much more dynamic view of the process of learning scientifically than the mechanistic, “Here are the six steps. What step am I at?”

It takes a different way of thinking. It's a more organic way of thinking than a mechanistic way of thinking. To add to that, he asked, “How do you learn that?” He wanted to go farther than, “Now, I understand it. It's an interesting theory. How do you learn it?” He then looked at a lot of research and literature on how people learn. That drives you to start to think about habits and how we have habitual ways of thinking, not only habitual ways of physically doing something.

If you're trying to change somebody who's thinking in a certain way that's linear and where they think they have the answers, they aren't testing their ideas and aren't learning new things. Trying to change that to this more scientific way of thinking is going to take a lot of practice to develop a new habit and a new routine way of thinking that feels natural.

Trying to change somebody's linear thinking to a more scientific way will take a lot of practice to develop naturally. Click To Tweet

That requires practice and he learned about kata from the martial arts where the way you go from being hopeless if you had to defend yourself to being a skilled fighter in the martial arts is you learn kata. They break down all the skills required to fight into small pieces, small movements and then you practice those movements exactly as the teacher says over and over again until you're asked for that piece.

It's like wax on, wax off.

Wax on, wax off is a kata. Essentially, the way I learned classical guitar was wax on, wax off. My teacher is saying, “You're playing through this mistake. Every time you play through this mistake, you're learning the wrong way of doing it. Your brain is getting better. It's getting locked in. You're developing a habit,” and what the habit looks like is a bunch of neurons that are connected in a cluster. When you push a button in your mind, you're running that routine and it's going to do it exactly the way it's been taught, which is the way you're doing it. It's not hearing what you say, it's only experiencing what you do.

Every time you practice it wrong, you get better at playing it wrong. You're more likely to play it wrong in the future. He stops me and says, “Jeff, stop. Let's go back to this one measure and what's the right way to play this.” He says, “Slow down and play it at 100th of the speed and do everything correctly. Every movement, every way your hand connects to the string, does everything perfectly. As you repeat, you get faster and faster. When you get to this piece, find the areas of weakness and just focus on those measures. It's a lot less fun than it is to play the piece.

Every time you practice something wrong, you get better at playing it wrong, and you are more likely to play it wrong in the future. Click To Tweet

People use the word grueling.

Exactly. That's why a kid doesn't like to take piano lessons.

In organizations that are impatient and people can be impatient. They maybe want to rush through the “rollout” or implementation of these team boards or some practice instead of going slow to get it right. I think of the Toyota-ism of going slow to go fast. Do similar ideas apply from what you've seen as you've gotten better at practicing this within an organization?

Similar things apply and the organizations are impatient. What we learned from Toyota was the idea of the model line, they called it. In the US we have TSSC, which is called the Toyota Production System Support Center. That was a spinoff of the group in Japan called the Operation Management Consulting Division that Ohno set up that had the original masters who only taught the right way.

They would go into suppliers, for example, and they'd set up a model line. They'd pick one area of the plant and they would spend four months, or the people who worked in the plant, the managers would set ridiculous targets that seem impossible to achieve. An engineer and a manager would be working on that for four months and they'd keep improving it.

Finally, they would achieve the challenging goal that four months ago seemed impossible. In the process of doing that, they would end up with a full Toyota Production System, all the bells and whistles, and all the features. The teacher would guide him through that without ever teaching them anything. Just by asking questions and challenging them, and occasionally, giving them an idea and suggestion, and then they would keep on going.

The assumption is once they learn in this one area, what they want them to learn in one area is the process of transformation, the way of thinking, and also building the system so it functioned as a system and the people doing the work understood what they're doing and why. Also, the leaders brought in and they could continue to improve it beyond the four months.

They would learn how this works as a system and then they would expect them to continue it. They'd come back periodically, maybe once a month, and then once every six months and they're challenged. They'd push and they'd criticize. The plants in Japan would get it and they would keep on going. When we do that in the United States and build the model line and everybody likes the model line, suddenly, you get an order coming down from the top, “Good. Do the rest of the company by the end of the year.”

They had no understanding of what it took to get from day one, and instead of four months, it took eight months because we're slow learners. They had no idea what happened in that group, what they learned, all the lessons learned, all the things they tried that didn't work, how hard they worked at it, and how hard the leaders worked to change their way of thinking.

They didn't understand what happened in that model line in that organic transformation learning process. What I would always say is you're not trying to replicate the solutions and the results at the end. You're trying to replicate that process. Every other part of the organization's got to take eight months. That's hard for many organizations.

The process you're describing of asking those questions and I often fall back on Taiichi Ohno and his book. There's a header for one of the chapters, Start from Need. He would talk about what are your most pressing needs. For me in healthcare, the most pressing needs right now would include figuring out what needs to be done for COVID treatment and for COVID vaccination.

Also, in normal times, patient safety in general might be the most pressing need. John Shook, in the Lean Enterprise Institute model, says, “What problem are you trying to solve?” That reminds me of what you're saying where so often, there's this dogma where people will say, and I'll challenge it. You always start with 5S. That's a very mechanistic linear roadmap or cookbook.

I've never heard a Toyota sensei say, “You always start with 5S.” As Ohno said, “Ask, what is the problem?” There is also this dogma, and people have learned this from some sensei where they'll say, “What is the problem?” You'll state something and they'll say, “No, what is the problem?” They'll ask what is the problem 50 times. You'll have this laundry list of problems and they are never happy with that.

At some point you say, “This is the problem. This is the most pressing problem.” They want one. It could be pretty general. For example, effectively and efficiently distributing the vaccine. Getting it into people's arms.” That's the problem. The two other people say, “Good. Now, we can move. We can proceed.” When you're doing something, they're always going to ask, “How does that relate to the problem?”

When it comes to roadmaps and again, The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, the subtitle is not something like an easy 10-step 90-day roadmap to becoming lean.

That's intentional and in Ohno's case, he used to say, “If you write it down, you kill it.” Everything important you learn at the Gemba by doing. I started to write and they created the house. They started to write things down more and as they globalized, they found more value in having things written down. I was encouraged by people who learned from Toyota. They would say, “When are you going to write another book?” “Wait a second. I thought you didn't like books.” “It has some value. We've changed our minds.”

Again, it's the principles. The problem is when you get, let's say a hospital saying, “We're different. How does this apply to us? When you talk about standards, that's bureaucracy. We don't like bureaucracy.” There's a Buddhist expression, “When the mind meets the mind, everyone gets confused.” Once you get into this debate and dialogue where I'm pitching my theories, my mental models, and my data against your theories mental model, and data, nobody's going to win.

Where you can win it at the Gemba by trying it. Particularly, if I can let go of my ego as an expert or teacher and let you try it and ask you your ideas. That's what the Toyota sensei did and what Ohno did. Now, it's your idea. You're trying it. You see it works. You'll eventually find standard work and you'll learn how to make it work as you keep trying things. I don't have to convince you about standard work. You'll be telling me how great it is.

What I found is that the people who read my book, who benefit the most are people who have a good deal of experience at the Gemba trying this stuff. For them, they'll say, “I hadn't thought about it that way or I've been doing this and I didn't realize I was doing this as opposed to, “I've never heard of this before. I'm enlightened. Now, I'm going to go out and apply this.”

In terms of logic, it's a difference between deductive logic and inductive logic. Some people do learn deductively and they can take a theory and they do a pretty good job of applying it but most people learn better inductively. They try something, they encounter a problem, and they struggle through it, and then you can give them some insight that helps to understand why they struggled and why they were successful.

Now, they have a connection between what they experienced and a more general idea. That's what I was trying to do with the trade-away. By that point, I had published in the Harvard Business Review, and they're all about case examples and what's your big idea? I then start with an example and show how the idea evolves from the example. I had learned about that. That's why I focused on stories so much.

One other question I wanted to ask in this to continue some of the discussion of the difference between being Toyota and becoming Toyota. I've tried to point this out to people as often as I can. Principle number one in the list of fourteen principles is about making decisions based on the long-term perspective, even at the expense of the short-term. I'm paraphrasing that pretty closely. I'm curious about what your experience is. I can't remember a hospital ever initiating a discussion by saying, “How can we become more long-term focused?”

It's, again, like this whole discussion about scientific thinking and how people learn. Also, I added the principle in the new version, systems thinking. I didn't have that in the principle. It's because we're dealing with complex systems, that's why it's so important to think long-term and have a picture of where you want to be to guide all the short-term smaller steps you take.

When people are not thinking in terms of systems, they assume that there could be linear cause and effect. As a CEO, I'm saying, “We know what our problem is. It's the budget. We need to cut costs and we need to do our work more efficiently. We need to implement the changes necessary to reduce our costs.” Every time I implement something, I should be able to see an immediate bottom-line result and even cost to justify the change based on return on investment.

LBI Jeff Liker | The Toyota Way
The Toyota Way: When people are not thinking in terms of systems, they assume that there could be linear cause and effect.

Some places have gotten down to a six-month return on investment. When I was starting industrial engineering, 1 to 2 years was pretty common but now, it's six months. When you think about that short-term ROI, 1) You're assuming linear cause and effect. “If I do X, I get Y.” 2) You're assuming that if I tackle a lot of short-term problems, somehow that's going to add up to a new system that's functioning at a high level and neither is true.

If you want to change people's thinking, it's not easy. For one thing, we know that if I'm 55 years old and I'm a CEO and I've been successful at everything I've done. I am an MD and I have an MBA. I'm always the smartest person in the room. I've turned around three hospitals. It's going to be hard to tell that person anything new. They're going to tell you what the right way to do things is. They've learned it and they have their favorite consultants. It's pretty difficult. The only chance you have is if you can get that person to the Gemba to work on an improvement project. Also, participating in a team and not trying to be the leader of the team.

In there, you have an opportunity to coach that person and for that person to learn from experience. They'll learn that things are more complicated than they think. They'll learn that the frontline workers have more ideas than they realize. They'll learn that the processes are pretty messy, and there are a lot of different situations. They'll start to realize it's a system.

It's a little more complex than simply, “I ordered this to happen to get these results.” The Gemba seems to be a good place to learn a good. They call it Dojo. In Japan, the Dojo is where you learn the martial arts. If you deal with a master black belt and you don't know karate or you know your version, he's not going to give you lectures. He'll take you to the floor and there's mats and let's start.

You don't go read a book about karate.

Unfortunately, that's often what it takes, and getting these guys to go to the Gemba may be difficult or even impossible so you might have to wait your turn.

That's the catch-22 because if you try to be coercive, directive, and that leader that you described, you might say, “No. That's not my job. I don't need to do that. I've never done that.” How do you lead them to water?

I wrote The Toyota Way to Service Excellence with Karyn Ross. Karyn worked for the insurance company and she was originally answering the phones. On her own, she learned about lean and she became a lean consultant within the insurance company. She had the ability, and it's a social skill more than anything, but she would go to meet with a vice president of the Northeast region who's one step from God. She would stand outside the office of that person, male or female. They would say, “Come on for the meeting.” She'd say, “No. Come with me.” She would refuse to walk into the office. She'd wait until they walked out of the office and then she would take them to the Gemba.

LBI Jeff Liker | The Toyota Way
The Toyota Way to Service Excellence

I know Karyn well enough. I can picture her at that moment, her demeanor and enthusiasm.

She is not threatening at all, and she's not being coercive at all. Every time she did that, she said that the person loved it. They're so excited to get out of the office and to see something real.

I've seen a similar dynamic when someone has been open to the opportunity. A hospital CEO going and standing in a nurse's station for 30 minutes. What they're used to, if they go out into the Gemba is they're being toured. They are going, sitting, standing, and observing work. In a way, it was like the Ohno circle. They'll say, “I had no idea how hard people were working, how hard they were struggling,” and those things become quickly apparent.

I also see that each cycle is different from the others. It's not a clear, simple pattern and the best practices aren't being used. If they were, they could see the nurses would be slowed down and they couldn't serve the patients. Ohno would take a day. That was the minimum time and if we can get a half an hour, that's a start.

Jeff, thank you so much for sharing your thoughts on what led to the book and for sharing some of the things that you've learned and that you continue to teach in different ways. It has been a helpful book to a lot of people in a lot of different settings. That book is The Toyota Way. The second edition is available now. It's available anywhere you could buy books, right?

Yes. I do recommend it. I've had people ask me, “If I already read the first version, should I read the second version, or if I haven't read the first version, should I read that first?” The second edition is quite a bit better and more relevant now and has more examples from service, but also the idea of scientific thinking is portable and it goes everywhere and for any type of problem. I would point people to the new book, whether they read the first book or not.

That question's easier to answer. For those of us like myself who have read the first edition, I'm going to flip through and look for things that are different.

I wouldn't recommend that because it's about 90% different.

I've been reading it from the beginning. I will continue doing that then.

Thank you.

I will put impatience aside, and reinforce, relearn, and rethink. Jeff, thank you so much. Our guest has been Jeff Liker. I appreciate you doing this now. Hopefully, we can talk again.

It's good to talk to you again.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.

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