The Toyota Engagement Equation: Interview with Tracey and Ernie Richardson

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(en français)

There are loads of excellent books about Lean around, yet The Toyota Engagement Equation – How to Understand and Implement Continuous Improvement Thinking in Any Organisation is somehow unique.

During the last couple of decades, the understanding of what lean actually is has made tremendous steps forwards thanks to the research work of leading figures such as Daniel T. Jones, Jim Womack, Jeffrey Liker or Michael Ballé. We now understand that Lean is a production and a management system to put in place for people to think and learn about the work to be done.

Yet the testimony of people who went all the way, from newbies to managers, within the japanese car manufacturer was still somehow missing. This is exactly what The Toyota Engagement Equation is all about. Explaining from the inside how Toyota turns regular people into deep thinkers about their work.

In that respect, this is an invaluable book. In addition, The Toyota Engagement Equation happens to be wonderful read, full of telling anecdotes explaining what the nuts and bolts of the culture in this company, putting respect for people, discipline and accountability (or D’n’A as the authors put it) first.

The Equation

Drawing on their hindsight, Tracey and Ernie had boiled the continuous improvement culture down to an equation. This may sound cryptic at first, but it comes in handy to remember how to set up such virtuous practices : GTS6 + E3 = DNA

The objective here is not to describe it (it takes 250 pages out of the book) but to list the six “GTS” and the three “E” injunctions one has to follow to encourage a culture of continuous improvement :

  1. Go To See
  2. Grasp The Situation
  3. Get To the Solution
  4. Get To Standardization
  5. Get To Sustainability
  6. Get To Stretch

The E3 stands for Everybody Engaged Everyday. Many leadership thought leaders insist on these three principles, yet few come with such actionable practices and specific stories making the link between this engagement strategy and the day-to-day operations.

These two parts of the formula are developed in the book respectively by Tracey (GTS6) and Ernie (E3).

The Nemawashi epiphany

I strongly invite people to read the full book to investigate this “magic” formula but I just want to emphasize how Tracey thoroughly explains one dimension that may quite often be overlooked : how to engage everyone in the Get To Solution phase. The corresponding Lean Practice (Nemawashi) is essential to keep everyone engaged, everyday. I somehow understood it before (thanks to Jeffrey Liker book) but it has been an epiphany how this dimension is oh-so important in the Toyota culture. As an example, Tracey explains that when she was coached on a A3 (complex problem), his coach would not only look at the result of the experiments and the disciplined thinking behind these, but also he will ask her how she managed to engage everyone while conducting the improvement action. This is one of the many enlightenments of this book (the relentlessness of root cause investigation, leadership actions and the use of leading indicators are others)

We have been very lucky that Tracey and Ernie accepted to discuss the book with us. So without further ado, here they are …

o o o

Hi Tracey, Ernie, thank you so much for giving us some of your time. So, what was the main motive behind the writing of The Toyota Engagement Question?

Tracey: The thought of putting together a book came to me about 12 years ago in 2007, we have read many other great books on Toyota thinking and thought why not describe our 30+-year gemba journey from an inside perspective at the first Toyota plant in TMMK (Kentucky). For Ernie and I, it started with a really extensive hiring process, that lasted about a year and a half. We were challenged on problem solving, leadership, personal initiative, listening, and team building. Similar to a video game these days getting through one level to move on to the next, if I recall there were about 7 levels to get to the interview process. This illustrated the deep level of thinking they wanted to see in future employees/leaders at Toyota North America.  Many of our trainers that influenced us at the beginning had connections to Taiichi Ohno and the Toyoda family, we felt very blessed to be part of this historic point of time, absorbing every ounce of knowledge we could. The learning was captured mostly from the gemba, experiencing successes and failures (mostly failures in the beginning) that allowed us to learn a great deal about assumptions versus facts and jumping to conclusions too quickly. It felt like it was a very rigid environment but that soon became more of the norm as we created the culture they dub as The Toyota Way today. It was really about how we developed the people the best way possible including them in all levels of thinking and learning. We wanted to share how people-centric Toyota was in every facet of their business.

tracey
(Tracey Richardson)

Ernie: Tracey and I wrote a lot in the book about capturing the learning from the hourly position (team member and team leader) and development process into leadership positions. Toyota has a very unique approach that most aren’t willing to replicate from a leader to team member development ratio which was 1 to 5, meaning throughout all levels of the organizations (President to team member) there was 1 leader that was responsible for 5 people on the team. Oftentimes this could be 4 to 7 depending upon the complexity of the area or amount of decision made as well as critical process areas, but for the most part there was an average of 5.  I believe this was a key factor in the success of our culture of people development. You were not overwhelmed each day with 25+ people to try to manage on your own. In a world where a car comes off the line every 57 seconds (give or take) you must rely upon the extraordinary brain-power your team has that you are helping develop and foster each day.

Since we were the very first solely owned Toyota plant in North America, there were a few hurdles we had to overcome as we all were leading and learning together in those first few years. The language barrier with our Japanese trainers was very difficult, some of them were learning English on the way over to the United States and we learned minimal Japanese to assist as we could. To translate the deep meaning in some of the TPS Japanese terms, it was often difficult. So, the training was gemba based, with translators assisting when they could. At times it was deep yet very basic if that makes sense. For example they often said: “Please look”, “Please think”, “Please listen”: “What do you see, what do you smell, what do you hear?”. They always challenged us to look at the situation through a different lens (think out of the box). Gemba lessons were always deeper than what they may have appeared to be. They taught us to distinguish facts from opinions, and to be careful not to jump to conclusions. In the previous cultures we came from, many of us were conditioned to jump to solutions before we recognize properly what the problem is. It was a reconditioning of our nature human nature to fix something. It was a different territory, to stop and think. That was their mission in the first few years. They really wanted this thinking to cascade throughout the whole organization, at group level, team level, and through all the functional areas.

Gemba lessons were always deeper than what they may have appeared to be. They taught us to distinguish facts from opinions, and to be careful not to jump to conclusions. In the previous cultures we came from, many of us were conditioned to jump to solutions before we recognize properly what the problem is.

The thing that struck me most in the book in how your Toyota coaches insisted on having everyone on board as part of a kaizen activity. Not only did you have to make the investigations (gemba), hypothesis, actions and results explicit but also how your get the team onboard. This is a real epiphany for me: the importance of nemawashi that you explain so well in the Get To Solution (GTS6) chapter. Can you please elaborate on this?

Tracey: So early on in our Toyota career, it was established that develop people was the biggest challenge for the leaders (us). Not only the success of one person but also the success of the whole team (all the functional areas vertically and horizontally). It is hard to be successful in this company if the entire team doesn’t see through the same lens from a strategy deployment perspective. We always need to think about these questions when change is made to a process: what impact does it have on other people? What about the bigger picture? How much time does it take to other people to understand the situation/new standard? Our responsibility was to be able to understand the full extent of the problem we were fixing. We would then coach the people we serve to be able to continue to develop their skill set and increase their capabilities.

It is hard to be successful in this company if the entire team doesn’t see through the same lens from a strategy deployment perspective.

Ernie: Another approach was with Quality Circle program with (mostly) team members and team leaders selecting team-based problems that affected their KPI’s (Q, S, P, C). Other avenues were with individual or team-based suggestions through our suggest system program which had criteria to meet and measurements to show impact.

tracey ernie
(Ernie and Tracey Richardson)

A really impactful lesson for me – I talk about it in greater detail in the book – was my Japanese trainer having me document (daily) my interactions. He would always ask me first « who did you develop today? » and then, second: « what did you learn today? ». The questions are related to these 2 concepts 1/ servant leadership and 2/ reflection or hansei. After several years of documenting my learning and the team members I serve, I was able to visualize and internalize my own growth and development over the year, it was really powerful and I understood “the why” behind it much more than when I started. I recommend that for folks now learning, both as a coach and if you are being coached.

I work with ex-Toyota colleagues and this “nemawashi concept” seems so natural for them that they don’t feel like it’s worth explaining. Yet how would it be in practice? How would you do to have everyone on board? There is this awesome statement in the book: « Imposing a change out of the blue or rapid change without a standard in place is considered off-limits in Toyota ».

Tracey: The Quality Circle program was driven around consensus decision making and became a cultural expectation. Many people tend to misunderstand that, it’s not like everybody gets excited when their problem may not be selected first, but more so about the dedicated teamwork that is created together for the problem the team decided to work on for the moment. For consensus purposes, we would always stop and listen to everyone, ask them, if they are not fully engaged: « why do you feel this way about the problem? Please share your thoughts » At the end of that we would ask: « can everybody live with this decision? » so that we can move forward until we reach the problem someone else would like to work on. The meaning behind Nemawashi is metaphoric around “prepping the soil” before planting a tree. In other words, if we invest in our people upfront, if we listen, if we understand, then we can build mutual trust with leadership similar to the continual growth of a tree. It is a powerful cultural atmosphere within Toyota. It is not a « convincing » environment but an « engaging » one, where people have a voice. It was always part of whatever improvement we had going on at all levels. This is a foundational process to help us in every facet of the business for all of us to come together a little bit faster than other companies. Even if it’s not perfect, we learn together. It’s often dubbed as timely because people often think that they don’t have time to get everyone opinion, but a high percentage of the time rework will occur because of lack of communication. Invest up front.

How would you explain that this change management practice (never identified as such in lean) is very often overlooked in some Lean literature?

Ernie: It is often hard to understand what you can’t experience first-hand, you can say that with many things for example sky-diving, someone can describe it, but until you live and breathe it the perspective is missing. From our perspective, our book adds a little different angle from other lean books growing up with Toyota and our trainers simultaneously in North America. Toyota Engagement Equation is from the perspective of two newbies going on a 30-year learning journey with trials and tribulations from priceless lessons with our Japanese trainers/leaders during a unique time within Toyota. We try to replicate a process/equation that describes a very dynamic and synergistic culture that isn’t easily replicated. Not because it’s complex, because of the discipline and accountability for people, standards and doing business is unprecedented. We both tell many personal stories of how we learned to condition our behaviors as our trainers did during the time of Taiichi Ohno.

Toyota Engagement Equation is from the perspective of two newbies going on a 30-year learning journey with trials and tribulations from priceless lessons with our Japanese trainers/leaders during a unique time within Toyota.

Tracey: Yes we consider the book to be very unique coming from two people that had zero automotive experience and they conditioned us (not always easy) to think differently, over 75% of the hires had no previous experience as well—how did they do it? Many companies trying to do lean often have the desire to improve but lack of discipline and accountability for standardization, visualization, people development and problem solving (fact not fire-fighting). At Toyota there isn’t a choice to not follow the standard, it’s an expectation of your job until you find a new best practice together with the team. It may sound harsh and I will admit in the beginning it was a different approach but in time you grew to appreciate and embrace it actually. Sakichi Toyoda was the great-grandfather of current Toyota President Akio Toyoda. He created one of the percepts (there were others): « good people make good products ». Part of this thinking has always been part of the culture. It takes investment from the company and leadership to put process over results. Our trainers would say that “results are the outcome of a good “process” you don’t have to focus on them. As Mr. Cho would say – Always “go see, ask why and show respect”, this was in everything we did. A good practice!

ernie
(Ernie Richardson)

Talking about leadership there is this impressive story of the factory stopping and Mr. Fujio Cho coming to meet with you, Ernie. How did you feel when you heard that the President of Toyota Motor Manufacturing Kentucky (TMMK) was on his way to discuss with you?

Ernie: When I heard that Mr. Cho was walking over to Powertrain from the main plant, I have to admit I was a bit concerned with that feeling you get in your stomach. Not that Toyota gave me reason to think I would be fired, it was a self-created fear that I was “in trouble”. Actually, it was quite the opposite, he came to grasp the situation in person and find out what I needed (true servant leader). He then shook my hand and said “thank you, Ernie-san for shutting the line down, we will get this problem fixed now!”. I was a bit surprised at first, but after reflection that was the type of President he was, a person who put people development upon results for the day. That really was an impactful moment for me about how to lead people. I tell this story for people to understand the changes that creating a learning culture requires. In that aspect Mr. Cho found an opportunity for me to learn something. As a leader, what can I do to develop other people I can influence and to reduce the gap between where they are now in their development and what they are capable of in the future. It was a great lesson, it was ok to make a mistake, just not the same one for the same reason.

Something we may have trouble to understand is the one you describe in Get To Stretch (GTS6). Despite the great results obtained by the team through carefully lead Kaizen activities, your coaches never get complacent and was still looking for the next challenge. How did you deal with such coaching without feeling overwhelmed?

Tracey: This was a learning curve for me in the beginning at Toyota, nothing ever seemed good enough for the trainers and they pushed us very hard at times. My early thoughts were “Isn’t this good enough? We met expectations!” “Why are we always changing?” We sometimes had small celebrations for our successes but this never became the norm. This was the type of environment we all eventually embraced because we understood the purpose and why we always had to keep our competitors in the rear-view mirror. As we grew as a company, some of the trainers left and we didn’t have the same ratio as we did in the early days. We had to take responsibility for making change even when we were doing very well as a team.

One of the stories I share in the book is about a time my Plastics team met all the expectations with our KPI board being all green. Of course I was ecstatic getting caught up in the moment, perhaps celebrating a little too long (in reality it was a few weeks). So, one of the Japanese coordinators came down to the floor, he asked me several questions. I was thinking to myself everything is okay, just look at my visual board, he said: “please tell me about your board”. I said, “everything is green we are doing very good”. And then I realized the mistake I made and thought: « Oh no! I didn’t just say that, did I? » You have this moment sometimes when you get sucked into the vortex of results and lose focus on the processes that get you there. The Trainer said: « Tracey-san it’s too easy ». The “unspoken rule” was about a 4-6-week window of time stabilizing the performance. As a leader it’s your responsibility to raise the bar and create yellow and red situations for yourself. If it’s all green, it’s because you haven’t challenged yourself and your team. We must never be complacent and we need to keep at looking at the next challenge. We just reach another level, stabilize and then climb, stabilize etc., that is GTS6 (Get to Stretch).

Leading indicators are about predicting something before it happens. If I only react using lagging indicators, I’m always going to be in firefighting mode.

Another stunning epiphany in your book is the difference between lagging and leading indicators. Again, this is something that I somehow understood before but it has never been so clear to me before reading it in your book. Can you please explain the difference and tell us how to set up such leading indicators?

Ernie: Leading indicators are about predicting something before it happens. Leading is the process. If I only react using lagging indicators, I’m always going to be in firefighting mode. Leading indicators help understand the current situation. A good example, is sports. If you look at soccer game, the coach doesn’t go to the bar and watch his team play on game day. He or she remains on the field to understand in real time the dynamics of the game. They are looking at the process, making adjustments each minute if necessary, to change the outcome of that quarter, half and even the end of the game. If they don’t, they may lose – the teams that look at real time actions and adjust the best have the best chances for success. Leading measures the process to see the gaps before the next process or customer finds them. We talk about this in the book and during our gemba sessions at a client. If we’re looking at leading indicators there’s no need to always firefight the process (sometimes it’s necessary but not first choice every time). We explain that we obviously have to have some level of results – all business need end of day, week and quarter results – but they can be much more predictable if we aren’t reacting to them. Leading indicators give the possibility to see abnormality when it happens not after the fact (the process could have changed in month). A company that love problems should be focusing on leading indicators. In manufacturing it’s easy: see the process and measure it can be a little more challenging in non-manufacturing areas, but surely no excuse to not look for them.

You are now trainers and consultants. There’s so much learning in this book I was just wondering how do you translate it into regular training activities for your customers?

Ernie: Our approach is first to ask the customer/client what their needs are. Tracey and I are “customizer’s” in regard to the outcome and purpose they are seeking by having us work with them to move the needle and measure success. We are truly servant leaders and walk on the journey with them. If they are willing to understand, change will be necessary in various facets of the organization, especially “people development/people-first thinking”. We evaluate their current state various ways (through questions, gemba visits, strategy deployment etc) and develop what may be the best plan for their leadership and teams involved. There is no particular cookie cutter approach, all clients are different and have different outcomes so we are aware of that with them going into the learning journey. We look for the win-win for both us and our clients, we have always done business this way.

Tracey: I was very young when I started at Toyota I didn’t know until I left that role a few years later to begin consulting that other companies did not all do business in the way I conditioned to. This isn’t necessarily a bad thing, it was just different and took a little while to realize how best to translate the “thinking” learned making cars into totally different industries. So, we look at three “P” questions: what processes create your product or output? do you encounter problems? And lastly do you have people involved? Once you’ve ground yourself with those basic questions around what is our purpose, what do we want (outcomes) and how do we get there and know (measure)- then it really doesn’t matter what you produce: it all translates. The purpose behind the essence of this thinking is to easily see abnormality, how do we give process owner the ability to stop the line, to say “hey there’s a problem so let’s take action and start PDCA”. When you can look at it from this point of view, you remove the manufacturing view and make it more general. The main question is how do we develop people? Mr. Cho always said: « We always have to share our wisdom with the next generation, our duty as leaders is to share our knowledge ». Ernie and I wanted to do this in the book.

Tracey, Ernie thank you so much and good luck with book which you can order on Amazon.com.

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