Detroit Auto Show Overshadowed by Dr. Womack's Trashing of Toyota
Jim Womack's most recent e-letter titled "Beyond Toyota" has sparked a lively and even rancorous debate. "We all, even including Toyota, need to go beyond Toyota," Jim wrote, adding, "the wonderful days of Toyota sweeping all before it as it reveals more and more aspects of its value-creating methods are done."
Many have reacted strongly to these words. Actually, re-reading Jim's letter now, I find that those two sentences, the most provocative of his comments, aren't really all that provocative.
Anyway, debate is a healthy thing, right?
As for "Lean". . .
Yes, "lean" is in many respects the wrong term. I think most of us have recognized that for a long time.
And, regardless of the term, the typical interpretation of "lean" became far too narrow. Lean is more than just tools.
As for "TPS" or the "Toyota Way", I have previously distinguished between the Toyota Production System and "Toyota's production system." I say that "I distinguish..." but I didn't distinguish anything until taught to do so via a difficult lesson from Mr. Ohba, my boss at the time at TSSC. To my great frustration as I tried to argue in response to some of Mr. Ohba's specific lessons that, "look, Toyota doesn't actually do all of those things...", Mr. Ohba admonished me to "never confuse the 'Toyota Production System with Toyota's production system'." I was furious, because that effectively killed the debate I was trying to engage him in. Later, upon calming down, I realized that it was one of the most important lessons he provided me.
That lesson is critical to the current raging debate which centers partly on the question, "Is there more for us to learn from 'TPS' or the ‘Toyota Way'?". Well, I don't know about you (or your company or clients), but for me and mine there certainly is - we're still scratching the surface!
As for Toyota ...
If, on the other hand, you ask, "Is there more to learn from "Toyota" (the company) and its production and management?" again, I think the answer is clearly "yes," though it is equally clear that Toyota is stumbling. And it is POSSIBLE that the company has more than merely stumbled, it's possible that Toyota has lost what once made it so special. I say it's "possible" because only time will tell. Time WILL tell.
Detroit Auto Show: Toyota Versus Hyundai
Here's a fascinating sidebar to the debate of "Toyota versus lean and Toyota's decline versus what remains to learn." Mike Rother and I attended the Detroit Motor Show (always lots of fun, even for recovering gearheads, as we each claim to be - "recovering" that is). We went on an "industry preview day'" a day for auto industry professionals (they let us in anyway) to check out the products up close before the show opens to the public.
The nameplate that was getting all the attention of industry engineers was Hyundai. Competitor engineers were absolutely crawling all over the Hyundai vehicles, measuring, taking notes, taking photos, taking videos. It so happens that the CEO of Hyundai NA is John Krafcik. John Krafcik is the member of the Womack-led MIT team who actually coined the embattled term "lean." (John also happens to be one of the first two American engineers hired by NUMMI in 1984!)
Krafcik may indeed be a close observer of another new frontier in so-called lean - for the rise of Hyundai raises interesting considerations about whether there is more to learn from Toyota.
We know that, mainly, Toyota competes with itself and doesn't participate in a lot of typical "benchmarking" (they do benchmark, but in very specific concerted ways). Instead they look in the mirror and ask, "How can we get better?"
But, Toyota as a company is paranoid by nature, and at significant times, it peers outside itself to set major challenges. In 1950 the company determined to "catch up with Detroit in three years," which was arguably the stake in the ground that led to 50 years of relentless continuous improvement. That challenge was inspired by looking outside first, and then looking inside to see what needed to be done, what improvements were required.
One occasion for Toyota to look outside itself was in evidence on the first working day of 1984 at the first annual Toyota President's message I had a chance to hear. Dr. Shoichiro Toyoda had been president since 1982, so this was the second occasion for him to deliver such an important message to the company.
For Toyota, the president's annual speech is far more than a ceremonial pep talk. The annual speech marks the occasion for the president to announce the direction (hoshin) for the year, laying out the challenges to overcome, and rallying the organization to attain higher levels of achievement.
His message on that day was remarkable, coming as it did following a year in which the company had set record profits, not just for itself but for any Japanese manufacturer ever, at a time when Japanese manufacturers appeared truly unstoppable. The way I heard it was simply, "the Koreans are coming, the Koreans are coming!" Decades later we know that the Korean auto industry is formidable. In the early 1980s, concern about Hyundai and Daewoo seemed like a joke. The impression I received on that day was that the challenge from the Korean auto companies was imminent. We Toyota employees needed to meet the challenge by redoubling efforts to develop better products, provide better service, to satisfy customers.
I think Dr. Toyoda already knew, even at that time, that his company had surpassed the industry pioneers in the U.S. and Europe. He knew Toyota could no longer find its challenges there. And he knew his company needed challenges. As I wrote in a posting in December 2009, Toyota isn't Toyota without challenges:
"Toyota can't exist - Toyota can't be Toyota - without a challenge. That's true at the micro level - each work group and each individual - and for the company as a whole."
"There's little doubt that Toyota will weather this storm and in fact come out the other end stronger than ever. But, the bigger and somewhat ironic problem for Toyota is the fact that the need and opportunity to respond to these immediate problems will come as a welcome distraction from having to face its true, deeper, crisis."
Perhaps you can't visit the Detroit Auto Show, but you can read Alex Taylor's cover story for the current issue of Fortune magazine. For Dr. Toyoda, the challenge of the Korean auto industry was a challenge that demanded attention from his company in January 1984. In January 2010, the rest of the industry agrees.
But, Toyota's crisis has nothing to do with the Koreans.
"Lean" - What's in a Word?
Toyota is Toyota and they do what they do to achieve their aims. The rest of us observe that and try to understand it, in order to achieve goals in like manner. Some among us try to understand it in order to describe it, using words. "Lean" is a Rorschach -it means what you think it means.
Steven Spear suggests in his blog that "lean" is less than what Toyota does, and that the term "lean" has come to represent only the tools to improve operations, stating:
"…the issue is not 'getting beyond Toyota.' The issue is getting beyond 'lean' and converging on the full management system Toyota invented, used with such success, as have others–an approach to creating organizations capable of self diagnosis, learning, adaptation, improvement and innovation. Lean, alone, does not make that possible."
Jon Miller, among others, responded by suggesting the opposite, that "lean" must be more than that:
"Commenting on Steven's post, not Jim's e-mail, I would firmly say that the aim should be to "surpass Toyota" and not "surpass lean." The argument of whether we need to refresh the definition of lean is valid but this is not a question of going beyond lean to lean plus, but to rename and expand its boundaries and to pry it away from the dogma of a few. Shared purpose and principles are what we need."
The word "lean" can, of course, be used to mean either - something less than Toyota or something more. I have always found use of the word "lean" to be convenient and, as I think Jon Miller is suggesting, useful. I don't like going into companies and talking on and on about Toyota this and Toyota that ("Toyota is Toyota, we can't BE Toyota, but we can learn from them, etc."). So, for me "lean" has always been a convenient way to talk about "an ideal" that is bigger than just Toyota (though Toyota is our only or best empirical model, so we have to be careful about talking about an "ideal" that doesn't even exist.)
But, to argue the other side, I recall a caution many years ago from Robert Cole (now a professor emeritus at Berkeley, who I mentioned briefly last week - check out his book Managing Quality Fads or his classic Japanese Blue Collar) who warned that whenever you define a term too broadly, you take away any meaning it may have had. It becomes like air. You end up saying it encompasses all of life. It loses meaning. So, I can understand an argument to confine the term "lean" to just the tools.
The thing is, it would be very hard for me to do that. And, as Miller suggested in his reply to Spear, it has always seemed to me to be more productive to simply try to do a better job of defining lean, rather than try to offer an alternative term. I have experimented with different terms. If I talk to you about "lean," you and I both know roughly what we are talking about. But, if we talk about "world-class manufacturing," the discussion immediately becomes so watered down that it's hard to even have a focused conversation ("Oh yes, world-class manufacturing - you mean like GE or Dell, right?").
Hah, you know, the best term for the essence of all this ("this" = Toyota Way, TPS, Lean, WCM, etc.) remains good old "PDCA." PDCA as described at a high level by Deming and operationalized by Toyota.
Nowadays, I talk a lot about the A3 process, as do others, including Durward Sobek, Art Smalley, David Verble, and David Meier. "Problem solving" gets a lot of attention now, often in conjunction with the A3. Jeff Liker has popularized a view of "The Toyota Way." Mike Rother has introduced "Toyota Kata." Spear is introducing the "High-Velocity Organization." Tom Johnson has his "Manage-By-Means," contrasted with "Manage-By-Results," likening TPS to natural systems. Peter Senge and others still work on articulating and developing the "Learning Organization." Doc Hall has his concept of "Compression" (though with Compression, Doc is addressing matters at a little different level...). I think all of these (except maybe Doc's) are simply different ways of expressing and attempting to operationalize PDCA.
And, of course, PDCA is best understood simply as a means of structuring focused, operational learning cycles.
As has been suggested (don't know who said this first), TPS (or the Toyota Way) is less a matter of what Toyota does and more a matter of who Toyota is. No other company can "BE" Toyota. The point is that through a variety of historical happenstances Toyota as an organization has shined a bright light on the way organizations can function, can make the most of the talents of the people who comprise it, and can respond flexibly to adapt to changing circumstances. Toyota has been an organization that behaves as an organism.
I can't speak for Dr. Womack, but seems to me that he was saying simply that "lean" (whether defined broadly or narrowly) has always been about Toyota. And now it is time for organizations to stop looking at Toyota so much. I don't think Toyota - or Kiichiro or Taiichi Ohno or Mr. Cho or Akio - would disagree with that.
Senior Advisor, Lean Enterprise Institute
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