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Learning from the World’s Best Learning Organization // Book Summary of ‘The Toyota Way’

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Toyota is the World’s Most Benchmarked Company, and for Good Reason

Toyota’s cars are reputed for their reliability, initial quality, and long-term durability. It is the pioneer of modern, mass-production techniques and a paragon of operational excellence. Even if its reputation has taken a beating in the last few years because of the uncontrolled acceleration crisis and major product recalls, Toyota’s long-term standing as the epitome of quality production is undeniable.

Toyota measures and improves everything—even the noise that doors make when they open and close. As cars roll off assembly lines, they go through a final inspection station staffed by astute visual and tactile inspectors. If they spot even a simple paint defect, they don’t just quietly fix the problem merely by touching up the paint to satisfy the customer or their plant manager. They seek out systemic deficiencies that may have contributed to the problem, and may hint at deeper troubles with their processes.

World-Class Processes, World-Class Quality

'The Toyota Way' by Jeffrey Liker (ISBN 0071392319) As Jeffrey K. Liker explains in his excellent The Toyota Way, the genius of Toyota lies in the Japanese expression ‘jojo‘: it has gradually and steadily institutionalized common-sense principles for waste reduction (‘muda, mura, muri‘) and continuous improvement (‘kaizen.’) Liker, a professor of industrial engineering at the University of Michigan (my alma mater) has studied the Toyota culture for decades and has written six other books about learning from Toyota.

Liker establishes the context of The Toyota Way with a concise history of Toyota Motor (and the original Toyoda Textile Machinery business) and the tone set by Toyota founders Sakichi and Kiichiro Toyoda. Quality pioneers such as Taiichi Ohno, W. Edwards Deming, and Joseph Juran instituted groundbreaking philosophies that shifted Toyota’s organizational attention from managing resource efficiencies in isolation to managing the flow of value generated by the Toyota Production System (TPS.)

“No Problem is the Problem:” How Toyota Continuously Improves the Way it Works

Liker devotes a bulk of his book to the distinct elements of Toyota’s foundational principles: continuous flow, minimal inventory, avoidance of overproduction, balanced workload, standardized tasks, visual control, etc. He drills down to the underlying principles and behaviors of the Toyota culture: respect people, observe problems at the source, decide slowly but implement swiftly, and practice relentless appraisals of the status quo. Liker states, “Toyota’s success derives from balancing the role of people in an organizational culture that expects and values their continuous improvements, with a technical system focused on high-value-added flow.”

Companies that have tried to emulate Toyota have struggled not with understanding its management tools but with putting into practice the mindset and the organizational discipline that permeates everything Toyota does. “Understanding Toyota’s success and quality improvement systems does not automatically mean you can transform a company with a different culture and circumstances.”

Book Recommendation: Read The Toyota Way. As Liker observes, “Toyota is process oriented and consciously and deliberately invests long term in systems of people, technology and processes that work together to achieve high customer value.” The Toyota Way is comprehensive and well organized, if tedious in certain parts. It can impart many practical pointers to help improve the operational efficiency of one’s organization. Peruse it.

Postscript: I’ve taken many tours of Toyota’s Georgetown, Kentucky, factories and a few associated suppliers—once as part of a lean manufacturing study tour organized by Liker’s research group and other times privately. I strongly recommend them for observing Toyota’s matchless culture in action on the production floor. I also recommend the Toyota Commemorative Museum in Nagoya for a history of Toyoda Textile Machinery and Toyota Motor and their management principles.

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Inspirational Quotations #712

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In perpetrating a revolution, there are two requirements: someone or something to revolt against and someone to actually show up and do the revolting. Dress is usually casual and both parties may be flexible about time and place, but if either faction fails to attend, the whole enterprise is likely to come off badly.
—Woody Allen (American Actor)

He has all the virtues I dislike and none of the vices I admire.
—Winston Churchill (British Head of State)

The virtuous man is driven by responsibility; the non-virtuous man is driven by profit.
—Confucius (Chinese Philosopher)

Habits are formed by the repetition of particular acts. They are strengthened by an increase in the number of repeated acts. Habits are also weakened or broken, and contrary habits are formed by the repetition of contrary acts.
—Mortimer J. Adler (American Philosopher)

Happiness comes only when we push our brains and hearts to the farthest reaches of which we are capable.
—Leo Rosten (Russian-born American Humorist)

If you can tell me who your heroes are, I can tell you how you’re going to turn out in life.
—Warren Buffett (American Investor)

Do not talk about your greatness; you are really, in essential nature, no great than those around you.
—Wallace Wattles (American New Thought Author)

The lion who breaks the enemy’s ranks is a minor hero compared to the lion who overcomes himself.
—Jalal ad-Din Muhammad Rumi (Persian Muslim Mystic)

Tears are the symbol of the inability of the soul to restrain its emotion and retain its self command.
—Henri Frederic Amiel (Swiss Philosopher)

The soul refuses limits and always affirms an optimism, never a pessimism.
—Ralph Waldo Emerson (American Philosopher)

All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.
—Taiichi Ohno (Japanese Manufacturing Engineer)

A man has to live with himself, and he should see to it that he always has good company.
—Charles Evans Hughes (American Elected Rep)

Marriage! Nothing else demands so much from a man!
—Henrik Ibsen (Norwegian Playwright)

When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
—Warren Buffett (American Investor)

Thoughts come into our minds by avenues which we never left open, and thoughts go out of our minds through avenues which we never voluntarily opened.
—Ralph Waldo Emerson (American Philosopher)

A man’s errors are his portals of discovery.
—James Joyce (Irish Novelist)

Fight Ignorance, Not Each Other

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We live in a era of hyper-polarization and hyper-politicization. Studies suggest that we Americans have mostly devolved to two political groups that fervently believe that all wisdom resides in their particular standpoints and therefore care less and less to empathize with the other side.

People loathe the “other” ideological group with such visceral obsession that their hate pollutes their minds. Thanks partly to social media, self-organized tribes are isolating themselves into geographic, religious, ideological, educational, ethnic, and media bubbles of like-minded crusaders.

As I wrote previously, studies have shown that hanging around a group of likeminded folks can make people even more scornful of differing viewpoints, than they are as individuals. They demonize anyone who disagrees with them. They neither account for the case against their positions, nor find middle ground.

In the wake of the 2011 Tucson shooting (where perpetrator Jared Loughner shot and killed six individuals, and injured 14 others at a political gathering,) meditation teacher James Baraz of wrote a Huffington Post essay underscoring the ignorance that brings about the aforesaid demonization:

The real villain is in this story is not Jared Loughner. It’s not the media. And it’s not the gun rights advocates. The real villain is ignorance. Because of ignorance, people project their fear and turn those who are different into enemies—both in their minds and in actuality. Once you demonize the “other” they become less than human and you can inflict pain on them without guilt or shame.

Wondering what to read next?

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Don’t Lead a Dysfunctional Team

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The difference between functional and dysfunctional teams often boils down to effective team leadership. If you’ve been asked to lead a team, you’ll get more from your team members if you know what’s expected of the team, and manage your roles and responsibilities.

  1. Define the charter. Find out what your customers want. Find out how much latitude your team has—decision-making, reporting procedure, access to resources and information. Make sure there’s organizational support for these matters.
  2. Build on strengths. If team members are selected for you, determine what each person can contribute to the team’s effort. Ask members to identify their strengths.
  3. Set ground rules. Discuss how the team will operate. Be clear about performance expectations. If necessary, write down the rules agreed upon by team members.
  4. Develop a mission and goals. Get your team talking about what needs to get done, by whom, and when.
  5. “Herd the sheep.” Part of your job is to be a sheepdog. Keep people together and herd them toward goals.
  6. Break up conflicts. Disagreements are fine, even healthy, but outright hostility or anger is counterproductive. Stop the discussion, clarify positions, and try to find areas of agreement.
  7. Avoid groupthink. Don’t compromise too much for the sake of consensus, harmony, and “esprit de corps.” Don’t settle on the lowest-common-denominator decision upon which everybody agrees.
  8. Build bridges. Keep your sponsor, your manager, and each team member’s boss informed of the progress of the team’s assignment.
  9. Be visible. Any crisis calls for constant, candid communication. Knowing how to step up your communications efforts to the right levels during confusion is a powerful tool in managing a crisis.
  10. Captain the ship. You’re responsible for your team’s every outcome—good or bad. You are wholly accountable for everything that happens under your authority. Never pass the blame should things go wrong.
  11. Make the work fun. Give your team lots of recognition. Celebrate the team’s accomplishments.
  12. Establish freedom and autonomy. Empower team members to innovate and make decisions. Encourage all ideas and make sure that they are respected, no matter how strange they may sound. Micromanage only when you must.
  13. Assess performance. Periodically, ask the team to rate its performance. Resolve any problems as quickly as possible.
  14. Get stuff done. Don’t lose sight of your goals and your mission. The only thing that matters is the relevant results.

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Moral Disengagement Leads People to Act Immorally and Justify Their Unprincipled Behavior

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Temptation of Christ on the First Day of Lent

Rationality Drives Human Behavior Only After Emotion and Impulse Lose Their Hegemony

People adapt moral standards that dissuade them from objectionable behavior. But these moral standards do not serve as a steadfast regulator of their moral actions. Occasionally, circumstances can make people to become selectively disengaged from those moral self-sanctions and end up pursuing unprincipled actions.

Particularly when people feel angry, pressured, or depressed, their mental footing tends to ebb away. Any state of emotional threat can let up their determination to act ethically and resist temptations. They lose discipline, get into a defensive mode, and become susceptible to thinking only about short-term benefits. They are more likely to engage in self-absorbed behaviors that they would otherwise spurn, especially if the payoff for such behavior is high and the odds of getting caught and punished are low.

Circumstances Sometimes Sway People to Engage in Behaviors That Conflict with Their Internalized Moral Standards

Moral disengagement is the psychological phenomenon that describes how people rationalize behavior that is at odds with their own moral principles. For example, suppose a teenager who has a principled framework that forbids theft. If he takes a newspaper without paying for it from a Starbucks store, he may rationalize his actions by telling himself that Starbucks warranted some harm because it overcharges its consumers and, until recently, purchased not all its coffee beans from certified fair trade sources.

'Moral Disengagement' by Albert Bandura (ISBN 1464160058) People engaging in wrongdoing often see that the rules are uncalled-for and unjustifiable. In their judgment, even though they may be breaking the rules and flouting conventions, they’re persuaded that they’re really not doing anything wrong because the rules deserve to be violated.

Moral reasoning usually deprives people when they devalue their prey and malign their victims (“her tattletaling deserved it” or “he brandish a knife, hence I pulled out my gun.”)

Stanford Psychologist Albert Bandura, who introduced the concept of moral disengagement, identified eight cognitive mechanisms (book) that disengage a person’s internal moral standards from his/her actions, thereby causing unethical behavior without conspicuous remorse or self-censure.

Idea for Impact: Be Wary of Suspending Your Moral Standards to Reduce Self-Censure

When circumstances or people provoke you to potentially regretful behavior, realize that you are a self-determining agent, and that you have a moral and ethical responsibility to behave with integrity and pursue wholesome actions. Step back and ask yourself, “Normally, would I judge this contemplated action to be wrong? Are my ways of thinking flawed? Am I defending the harm I am causing by blaming others? Am I criticizing the victim to justify my destructive actions?”

When in doubt, use Warren Buffett’s rule of thumb for personal integrity: “I want [people] to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper—to be read by their spouses, children and friends—with the reporting done by an informed and critical reporter.”

Wondering what to read next?

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  3. Anger is the Hardest of the Negative Emotions to Subdue
  4. Summary of Richard Carlson’s ‘Don’t Sweat The Small Stuff’
  5. How People Defend Themselves in a Crisis

Inspirational Quotations #711

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What is man but his passion?
—Robert Penn Warren (American Poet)

Friends and acquaintances are the surest passport to fortune.
—Arthur Schopenhauer (German Philosopher)

Skepticism becomes the mark and even the pose of the educated mind. It is no longer directed against this and that article of the older creeds but is rather a bias against any kind of far-reaching ideas, and a denial of systematic participation on the part of such ideas in the intelligent direction of affairs.
—John Dewey (American Philosopher)

We are happier in many ways when we are old than when we were young. The young sow wild oats. The old grow sage.
—Winston Churchill (British Head of State)

Nobody holds a good opinion of a man who has a low opinion of himself.
—Anthony Trollope (English Novelist)

If deeply based in wisdom, even anger is allowed.
—Hans Taeger

All speech, written or spoken, is a dead language, until it finds a willing and prepared hearer.
—Robert Louis Stevenson (Scottish Novelist)

Knowledge dwells in heads replete with thoughts of other men; wisdom, in minds attentive to their own.
—William Cowper (English Anglican Poet)

Happiness lies, first of all, in health.
—George William Curtis (American Essayist)

Solitude is painful when one is young, but delightful when one is more mature.
—Albert Einstein (German-born Theoretical Physicist)

Experience isn’t interesting until it begins to repeat itself—in fact, till it does that, it hardly is experience.
—Elizabeth Bowen (Irish Novelist)

The purpose of human life is to serve and show compassion and the will to help others.
—Albert Schweitzer (French Theologian)

Treasure the memories of past misfortunes; they constitute our bank of fortitude.
—Eric Hoffer (American Philosopher)

Too often the strong, silent man is silent only because he does not know what to say, and is reputed strong only because he has remained silent.
—Winston Churchill (British Head of State)

Man can believe the impossible, but can never believe the improbable.
—Oscar Wilde (Irish Poet)

Image is what people think we are; integrity is what we really are.
—John C. Maxwell (American Christian Professional Speaker)

Men fight for liberty and win it with hard knocks. Their children, brought up easy, let it slip away again, poor fools. And their grandchildren are once more slaves.
—D. H. Lawrence (English Novelist)

We cannot avoid using power, cannot escape the compulsion to afflict the world, so let us, cautious in diction and mighty in contradiction, love powerfully.
—Martin Buber

For you and me, today is all we have; tomorrow is a mirage that may never become reality.
—Louis L’Amour

Choose Your Role Models Carefully

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Heroes and role models are very useful—they embody a higher plateau of cognitive and emotional truth, knowledge, and accomplishment that you can aspire to.

But the modern world has a dangerous problem with hero-worship: pop artists, rappers, film stars, sportspersons, capitalists, and so on command attention and affection as never before. This 2013 Financial Times article noted, “Way back in 2008, the three most admired personalities in sport were probably Tiger Woods, Lance Armstrong and Oscar Pistorius. They were portrayed not just as great athletes but as great men, role models….” And all these three popular heroes fell from grace.

While admiring and drawing wisdom, meaning, and inspiration from heroes can be constructive, you must take “hero narratives” with a grain of salt. The Buddha warned us not to trust anybody or anything just because it seems logical or it resonates with our feelings. He advised that we test our hypotheses by the results they yield when put into practice and shield our minds against the risk of biases or other limitations of our ability to discern from our experiences wisely. According to the Kalama Sutta, an aphorism of the historical Buddha that has been preserved orally by his followers (translated from the Pali by the eminent American Buddhist monk and prolific author Thanissaro Bhikkhu,)

Now, Kalamas, don’t go by reports, by legends, by traditions, by scripture, by logical conjecture, by inference, by analogies, by agreement through pondering views, by probability, or by the thought, ‘This contemplative is our teacher.’ When you know for yourselves that, ‘These qualities are skillful; these qualities are blameless; these qualities are praised by the wise; these qualities, when adopted & carried out, lead to welfare & to happiness’—then you should enter & remain in them.

Idea for Impact: Don’t blindly place much faith in today’s experts and celebrities. Realize the truth yourself.

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Rewards and Incentives Can Backfire

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Rewards and Incentives are Gateways to Behavior-Change

One of the great struggles of life is to get others to do the things they should, but don’t want to—getting your daughter to cleanup her bedroom or do homework in her least favorite subject, convincing your employee to do a task in the manner that your company expects, and so forth.

One tried-and-true technique to get reluctant people to do what they should is to hold back an incentive. For example, parents who want children to eat vegetables at dinner could stipulate that they eat their vegetables (the non-preferred behavior) before they can eat their desserts (the preferred behavior.)

Preferred Behaviors Can Be Used to Reinforce Unpreferred Behaviors

This motivational rule was formally studied by the American psychologist David Premack. The Premack Principle, or the “relativity theory of reinforcement,” makes it easier to do an unpleasant activity by putting a pleasant activity right after it. In this manner, a reinforcer could observe what an individual chooses to do voluntarily and offer that favored task as an incentive to gain compliance or to increase the likelihood of another less-favored behavior occurring.

As expected, although an academic, Premack enjoyed a very successful vocation as a highly paid “productivity expert” dispensing age-old techniques. He traveled around the country and advised thousands of corporate executives to manipulate themselves into becoming more motivated and more productive by organizing their day such that they schedule first anything that’s unpleasant and important and then reward themselves with something they really like doing.

Grandma’s Rule: “Johny, Finish Your Homework Before You Watch TV”

That a high probability behavior could be used to reinforce participation in a low probability behavior is the unassuming “Grandma’s Rule”—arguably the most universally recognized principle in the field of behavior change. Workplaces use the grandma’s rule by offering future “plum” assignments for employees who “pay their dues” by doing “dull and dirty” work in the present.

The grandma’s rule anchors in the fact that people, including children, are willing to do something they don’t really want to do if that’s the only way they can do something that they really want to do. Absent this established reinforcement, people left to their own devices tend to do what they like doing instead of doing things they don’t like doing even though latter are more beneficial.

The Hidden Costs of Rewards and Incentives

Rewards and incentives can guide and modify behavior. The goal of offering rewards for positive reinforcement is to have the unpleasant tasks become less and less unpleasant. Therefore, the true measure of the effectiveness of any reward is how well the preferred behaviors become internalized. For example, offering rewards to children for reading books is not merely to get them to read books inside the classroom, but to internalize the reading behavior with the goal that they read even during the summer when they don’t have to read for school.

Offering rewards for motivating people to do unlikable tasks could sometimes become counterproductive. In what psychologists call “the overjustification effect,” a reward, instead of motivating, could fortify a person’s revulsion for the task. In other words, the reward could reinforce the belief that the task can’t be worth doing for itself.

Rewards Can Backfire

Overjustification effect is controversial because it disputes the general principles of motivational psychology and behavioral reinforcement—especially in the contexts of parenting, education, and the workplace.

Idea for Impact: Locating the pleasure in the future, when the reward will be imparted, could turn the present-moment doing of an unpleasant task into tedium. For example, insisting that your child eat broccoli for being rewarded with dessert could make her hate broccoli even more.

Wondering what to read next?

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  3. Don’t Reward A While Hoping for B
  4. When Work Becomes a Metric, Metrics Risk Becoming the Work: A Case Study of the Stakhanovite Movement
  5. Incentives Matter

How to Prevent a Communications Breakdown During Crisis

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The ultimate test of a leader’s and an organization’s communication skills is how they deal with a crisis—natural disasters, crisis of confidence, acts of malevolence, strategic errors, acts of deception, management misconduct, and so forth.

It’s not difficult to see why communication is an important element of crisis management: leaders today have to tackle media that is unsympathetic to what it regards as management incompetence, shareholders and customers who are ever more demanding, legislation and regulation that is getting stricter, and competitors eager to pinch customers during times of distress.

Effective crisis communications must be able to have a consistent and clear message and present this message swiftly and regularly following a crisis.

Here are seven elements of effective crisis communication.

  1. Strategic Thinking: Think purposefully about what you want your constituencies (employees, stockholders, customers, suppliers, communities, the media) to know under the given circumstances. Many a routine problem has transformed into a crisis because too many people were told too much and the situation became exaggerated and out of control.
    • What happened
    • Who is responsible
    • Why did it happen
    • Who is affected
    • What should be done
    • Whom can we trust
    • What should we say
    • Who should say it
    • How should we say it
  2. Openness: When a crisis befalls, be prepared to talk about it internally and externally as assertively as you respond to the crisis operationally. Understand the expectations of your constituencies and go beyond what is expected or required. If you are not communicative enough, people may make erroneous assumptions about the crisis. Bad news can travel fast and sell best.
  3. Candor: If your constituencies should know about a crisis that your organization is experiencing, talk about it as quickly and as completely as you can, especially to those most directly affected.
  4. Concern: Keep the people most directly affected by the crisis updated until the crisis is completely resolved. Do not brand a whistle blower a troublemaker.
  5. Sensitivity: At the earliest possible moment, step back and analyze the impact of the crisis. Inform and alert all the constituencies that are affected. Demonstrate concern, compassion, sympathy, remorse, or contrition, whatever the case may require.
  6. Integrity: If you are responsible for the crisis or perceived as such, acknowledge the situation promptly. Be true to your corporate and personal conscience. Share the crisis action plan and seek inputs.
  7. Honesty: Learn from your mistakes and talk openly about what you’ve learned. Demonstrate your commitment to keeping errors and problems from resurfacing.

Idea for Impact: Reputation and goodwill represent a great part of business value. Protect yourself when faced with attacks on your reputation and competence. If you do not communicate effectively and frequently with your constituents, somebody else will. In the absence of information, your constituents can develop their own perceptions of the problem and its implications.

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Inspirational Quotations #710

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Everyone likes flattery; and when you come to Royalty you should lay it on with a trowel.
—Benjamin Franklin (American Political leader)

We set up harsh and unkind rules against ourselves. No one is born without faults. That man is best who has fewest.
—Horace (Quintus Horatius Flaccus) (Roman Poet)

A mantra to cure procrastinators: It needn’t be perfect; it needn’t be fun; it just has to get done.
—Marty Nemko (American Career Coach, Author)

He is happy whose circumstances suit his temper; but he is more excellent who can suit his temper to any circumstances.
—David Hume (Scottish Philosopher, Historian)

The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision—whether to fight or run away. And the most dangerous period is the aftermath. It is then, with all his resources spent and his guard down, that an individual must watch out for dulled reactions and faulty judgment.
—Richard Nixon (American Head of State)

Don’t criticize what you don’t understand, son. You never walked in that man’s shoes.
—Elvis Presley (American Musician)

Let us think of education as the means of developing our greatest abilities, because in each of us there is a private hope and dream which, fulfilled, can be translated into benefit for everyone and greater strength for our nation.
—John F. Kennedy (American Head of State)

Man becomes great exactly in the degree in which he works for the welfare of his fellow-men.
—Mohandas K. Gandhi (Indian Hindu Political leader)

The great majority of men are bundles of beginnings.
—Ralph Waldo Emerson (American Philosopher)

Old hands soil, it seems, whatever they caress, but they too have their beauty when they are joined in prayer. Young hands were made for caresses and the sheathing of love. It is a pity to make them join too soon.
—Andre Gide (French Novelist)

Earning trust is not easy, nor is it cheap, nor does it happen quickly. Earning trust is hard and demanding work. Trust comes only with genuine effort, never with a lick and a promise.
—Max De Pree (American Businessman)

Do not brood over your past mistakes and failures as this will only fill your mind with grief, regret and depression. Do not repeat them in the future.
—Sivananda Saraswati

Wisdom is not in words; Wisdom is meaning within words.
—Khalil Gibran (Lebanese-born American Philosopher)

When you introduce a moral lesson, let it be brief.
—Horace (Quintus Horatius Flaccus) (Roman Poet)

Study the past, if you would define the future.
—Confucius (Chinese Philosopher)