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Respect Science, Particularly in a Crisis

3/5/2009
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The current recession is the fifth in my working career.  And it is beginning to feel like the worst. I can't imagine that any manager or  improvement team member in any industry in any country isn't feeling a bit  queasy at this point, as the world economy keeps recessing toward an unknown  bottom. Where should we go to calibrate our North Star in times like these, to reassure ourselves that we are on the most promising path? Recently I've found  one answer.

In carefully reviewing a new publication from LEI, I've  had the opportunity to spend a lot of time with the "fathers of  lean". By this I mean the small band of Japanese line managers who made  the original breakthrough to create a lean enterprise and who were interviewed  at length much later about what they did and why. The relevant point for this  moment is that a small group of managers achieved a lean leap in a time of  severe stress, making some of their boldest moves during the financial crisis  of 1950.

As the Japanese economy entered a steep recession in that  year, the Toyota Motor Company ran out of cash, which was tied up in inventory  for products customers no longer wanted. The company fell under the control of  bankers who chopped the company in two, creating separate firms to divide the  marketing and sale functions from the product development and production  functions. (These firms were only recombined in 1982 to create the current  Toyota Motor Corporation.) Founding President Kiichiro Toyoda (new President  Akio Toyoda's grandfather) was driven out in the process. The pursuit of what  became the Toyota Production System, along with the product development,  supplier management, and customer support systems, was the creative response to  this crisis.

As I started to read these interviews I expected to  discover that Toyota's managers had a clear plan all along. Surely leaders like  Taiichi Ohno, Kikuo Suzumura, and Eiji Toyoda knew exactly where they were  going and how to get there. I also expected to find a clearly chartered  improvement team and a formal program to go with it. (Perhaps "The Way  Forward", Toyota's recent tag line in its advertising?)

What I found instead was that a few line managers had  some very simple ideas and an extreme sense of urgency: Minimize lead time from  order to delivery (to free up scarce cash.) Remove waste from every step in  every process (to reduce costs and enhance quality.) Take action now (because  there wasn’t much time.) But what they also had – and this was critical – was a  tight scientific discipline. While they did act quickly, they also took the  necessary time to document the current state, to state their hypothesis very  clearly, to conduct a rigorous experiment, to measure the results, and to  reflect on what they had actually achieved, sharing their findings widely.

What they didn't have was a "program" or even a  name for the system of scientific discovery they were creating. Indeed, the  label "Toyota Production System" was only introduced in 1970 – after  the system had been fully invented – to explain it to suppliers. What they also  didn't have was a program office or a dedicated improvement team. The fabled  Operations Management Consulting Division was introduced at about the same time  as the label TPS and only after TPS was deployed across the enterprise.  Toyota's remarkable act of creation – based on a scientific process of  systematic discovery – was conducted by line managers as the most important  part of their daily work. And – here’s the really inspiring part – they did  most of their research in midst of a fierce battle for survival.

In learning more about Toyota's achievements in the 1950s  as the company struggled to survive, I've gained a new appreciation for the  fact that we have no excuses in our current period of chaotic markets and  falling demand. Systematic science works wherever it is applied to any process.  And it is more and not less useful in the depths of a crisis. The only  ingredient that may be lacking today is our determination to respect rigorous  science in the current crisis. And that you can quickly rectify!

With best wishes for creative discovery in these chaotic  times,
Jim

James P. Womack
Founder and Chairman
lean enterprise Institute

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