There is a moment in lean transformation work that almost every practitioner has experienced. You have made real progress on the floor, in the office, or in the clinic. Flow is improving. Waste is visible. People are solving problems. And then you hit a wall, and the wall is technology.
That was my experience at O.C. Tanner. We had spent years building lean capability in our manufacturing operations, developing people, stabilizing processes, and shortening lead times. But the layer that was keeping us from advancing was the technology layer. Our production systems had become so complex that communicating clearly with our technology partners was genuinely difficult. We were speaking different languages, and the gap was costing us.
I found my way into those technology systems. What I discovered on the other side changed how I think about lean practice: if you can be genuinely intentional about your technology layer, you can enable the entire business. If you cannot, it becomes the ceiling.
If you can be genuinely intentional about your technology layer, you can enable the entire business. If you cannot, it becomes the ceiling.
I thought about that experience recently during a visit to Toyota Connected, the software subsidiary Toyota built specifically to address a version of the same problem.
The Decision Toyota Made
The origin story of Toyota Connected is a lean story, even if it is not always described that way. A decade ago, Toyota recognized that it had outsourced critical software capabilities: the virtual assistant in its vehicles, the safety services infrastructure, the connected data pipeline, the in-cabin multimedia system. These were handled by a network of tier-one suppliers, each operating at their own pace, on their own terms, with their own cycle times.
The result was a company that could design what it wanted but struggled to control the experience it was delivering. When something needed to change, the feedback loop was too long. The value stream from idea to customer impact ran through too many handoffs, too many contracts, too many organizational boundaries.
So Toyota began making deliberate, strategic choices about what to insource. Not everything. They were clear about that. Nobody at Toyota Connected is rebuilding Google Maps. The question was never whether to outsource. It was: Which capabilities are differentiating enough that we need to own them? Which create direct customer value at a touch point we cannot afford to lose control of?
The latest-generation Toyota Audio Multimedia system, which launched last year on the 2026 RAV4 globally, represents the culmination of that shift. For the first time, Toyota owns all of the code across that platform. The difference between that and the generation before it, where Toyota designed the system but handed 1,500 screenshots to suppliers to build, is not just technical. It is strategic. It is about owning the capability to respond, to iterate, to improve.
The Parallel for Lean Practitioners
Here is the question that Toyota’s journey raises for anyone in the lean world: what have we outsourced that we should own?
For most lean practitioners and leaders, the answer is somewhere in the neighborhood of technology fluency. We have, as a community, largely treated technology as someone else’s domain. IT handles it. The software team handles it. There are specialists for that. We will focus on the process side, and we will hand off when we hit the system.
That division of labor made sense for a while. It makes less sense now. And in the age of AI, it is starting to look like the same kind of strategic miscalculation that Toyota recognized in its connected vehicle software a decade ago.
The reason is not that lean practitioners also need to become software engineers. The reason is that technology is no longer simply a support function. In most organizations it is simultaneously a key artifact in the management system, part of the value a customer pays for, and one of the primary tools through which knowledge is acquired, shared, and acted on. If you cannot speak that language, you cannot see the waste in it. You cannot stabilize what you do not understand. You cannot connect the voice of the customer to the people building the product if the whole middle of your value stream is opaque to you.
Organizations that develop genuine AI fluency across their operational and leadership layers will be able to see and seize options that others cannot.
AI accelerates this urgency in a specific way. AI is not a tool in the traditional sense. It is not something you bolt onto an existing process. It is a capability that reshapes what the process can be. Organizations that develop genuine AI fluency across their operational and leadership layers will be able to see and seize options that others cannot. Organizations that outsource that fluency to a small group of specialists will find themselves in the same position Toyota found itself in with its multimedia system: able to describe what they want, but unable to control the experience.
Insourcing Capability, Not Headcount
The good news is that the lesson from Toyota is not that you need to hire an army of software engineers. The lesson is more precise than that. It is about deliberate, strategic insourcing of the capabilities that differentiate you, that connect directly to customer value, and that you cannot afford to have filtered through someone else’s priorities and cycle times.
For lean practitioners and leaders, that means a few things practically.
Develop basic fluency in information systems. You do not need to write code. You need to be able to walk a value stream that includes software development and see it clearly. That means understanding how work flows through a development team, where the handoffs are, where things wait, and what makes the cycle time long. It means being able to have a real conversation with a product owner or an engineer about where the constraint is.
Get your hands on AI tools, directly and personally. Not through a summary from someone else. Not in a training course. Actually use them. The practitioners who are building genuine AI capability are the ones who are experimenting, failing, adjusting, and learning in the work. The ones who are waiting for a standardized rollout are already behind.
Identify your differentiating capability and protect it. Toyota did not insource everything. They identified what was critical, what touched the customer directly, and what would define their competitive future. Lean practitioners and organizations should be doing the same analysis. What aspects of technology and AI capability are so central to your value proposition that outsourcing them is a strategic liability? Start there.
Build the bridge between lean thinking and technology explicitly. One of the most valuable things a lean practitioner can do right now is become the person who can translate between the operational world and the technology world. That is not a technical skill. It is a systems-thinking skill. It is a lean skill. It just needs to be applied in a domain where it has historically been underrepresented.
Through the Wall
Toyota spent a decade methodically insourcing the technology capabilities that mattered before they needed them urgently. The lean community has the tools to do the same. The question is whether we will make the deliberate choice to do it, or whether we will wait until the wall stops us again.
Be sure to check out LeanTech, an online LEI initiative dedicated to helping organizations apply lean practice to the technology layer of their operations. This effort is led by Tyson Heaton, Executive Director, and anchored by a faculty of practitioners whose work spans Toyota production systems, enterprise software transformation, AI-enabled lean coaching tools, and technology-native lean practice. At its core, the initiative rests on a straightforward premise: the same discipline that made lean thinking effective in operations and supply chains (understand the work, build capability in people, improve continuously) is now both applicable and necessary in the technology environments encountered by nearly every modern organization.
