The Toyota way

Leadership
 About Jeffery .K Liker

J.K. Liker is a professor of industrial and operations engineering at

the university of Michigan.

He is also the director of the Japan technology management

program (JTMP).

Co. Director of the lean manufacturing certificate program at the

university of Michigan.
Continuation…
Dr. Liker has co-authored over 65 articles, many
book chapters and five books.

His most recent book, the Toyota way was released

in January 2004.
Summary of the “Toyota way”
The Toyota way explains the management Principles and
the business philosophy behind Toyota’s success.

It narrates Toyota’s approach to lean production and the 14

Principles that drive Toyota towards quality and excellence.

The 4p’s model

Lean production
What is Leadership
Getting people to go where they would not normally go

Getting people aligned to a common objectives

Being a talent scout and developing talent

Continuation…
IT IS THE PROCESS OF ENCOURAGING & HELPING
OTHERS TO WORK ENTHUSIASTICALLY TOWARDS
OBJECTIVES.

IT IS THE RELATIONSHIP IN WHICH ONE

PERSON(THE LEADER) INFLUENCES OTHERS TO
WORK TOGETHER WILINGLY ON RELATED TASKS TO
ATTAIN GOALS DESIRED BY THE LEADER & OR GROUP.
Leadership styles
Autocratic

Democratic

Laissez faire

Paternalistic
Autocratic
Leader makes decisions without reference to anyone else

High degree of dependency on the leader

Can create de-motivation and alienation of staff

May be valuable in some types of business where

decisions need to be made quickly and decisively
Democratic
Encourages decision making
from different perspectives – leadership may be
emphasised throughout the organisation

Consultative: process of consultation before decisions

are taken
Persuasive: Leader takes decision and seeks to persuade
others that the decision is correct
Laissez-Faire
‘Let it be’ – the leadership responsibilities
are shared by all

Can be very useful in businesses

where creative ideas are important

Can be highly motivational,

as people have control over their working life
Continuation…
Can make coordination and decision making
time-consuming and lacking in overall direction

Relies on good team work

Relies on good interpersonal relations

Paternalistic
Leader acts as a ‘father figure’

Paternalistic leader makes decision but may consult

Believes in the need to support staff

Style based on task Vs people
High
High Relations High task &
& Low Task High Relations
People
(Supporting Style) (Participative Style)
Emphasis

Low Task & High Task

Low Relation & Low Relation
(Free-Rein Style) (Autocratic Style)

Low
Low High

(Four Key Leader Behaviours)

Technical terms:
1. Kaizen: Japanese word for “improvement” or “change for the
better”

2. Genchi Genbustu: Key approach for problem solving , the place

where it actually happens, “get your boosts on and go out and
see what is happening.

3. Heijunka: Production leveling, also known as production

smoothing. The general idea is to produce intermediate goods
at a constant rate to allow future processing to be carried out at
a constant and a predictable rate.
Continuation…
1. Jidoka: automation with human intelligence, also
refers to the practice of a manual line or process
when something goes wrong.

2. Hansei: acknowledge your own mistake and to

pledge improvement.

3. Nemawashi: considering all options available to solve

a particular problem and by going into the root
cause.
4P’s model
 Categories of the 4p model
4p’s Model

Philosophy Process People & Partners Problem Solving

Principle 2, 3,4,5, 6,
P 1rnciple 1 Principle 9, 10, 11 Principle 12, 13, 14
7, 8

The 14 managerial Principles have been categorized under the 4p model.

The 14 managerial Principles
These 14 Principles have been categorized under the 4p’s
model.

This managerial Principles was first started during the year

1940.

These 14 Principles kept Toyota in the market, unaffected

from the financial crisis as other companies like GM, Ford,
Chrysler.

These 14 Principles are applicable for any service industry.

Philosophy
Categorized under the leadership style challenging.

This talks about long term philosophy.

Philosophy helps attain short term decisions.

Includes a mission which is a common purpose to the organization

which is bigger than making money.

Generate value for the customers, society and the economy.

Strive to decide your own fate.

Toyota’s mission statement
Contribute to the economic growth of the country.

Contribute to the stability and well being of the team

members.

Contribute to the overall growth of Toyota.

 Principle: 1
Base your management decisions on a long term philosophy,
even at the expense of short term financial goals.

People need to find purpose to find motivation and establish

goals.

Align the organization towards a purpose greater than

making money.

Generate value for the customer, society and the economy.

Continuation
Be responsible. Accept for your conduct and maintain and
improve the skills that enable you to produce added value.

Tools to establish long term philosophy:

1) SWOT Analysis

2) Formulating Mission, Visions and values

3) Formulate strategic plan and deploy it by establishing goals and

targets for each level of employees, from chairman to watchman.
Principle: 2
Create a continuous process flow to bring problems to the
surface.

Redesign process to achieve continuous flow.

Create flow to move material and information fast.

Link process and people so that problems surfaces right away.

Make flow obvious throughout your organizational culture.

Principle: 3
Use pull system to avoid overproduction.

Provide downstream customers in the process with

what they want, when they want it and in the amount
that they want.

Pull Vs Push

Material replenishment initiated by consumption is the

basis for just-in-time.
Principle: 4
Level out the workload (heijunka). Work like a
tortoise, not the hare.

Eliminating waste is just the 1/3rd of the equation of

making lean successful.

Work to level out the workload of all manufacturing

and service processes as an alternative to the start and
stop of working on project in batches.
Principle: 5
Build a culture of stopping to fix problems, to get quality
right at the first time.

Quality for the customers drives your value proposition.

Use all the modern quality assurance methods available.

Develop a visual system to alert team or project leaders

that a machine or a process needs assistance (jidoka).
Continuation…

Build into your organization support systems to quickly solve

problems and put in place counter measures.

Build into your culture the philosophy of stopping or slowing

down to get quality right at the first time to enhance
productivity in the long run.
Principle: 6
Standardized tasks and process are the foundation for continuous
improvement and employee empowerment.

Use stable, repeatable methods everywhere to maintain the

predictability, regular timing and regular output of your process. It
is the foundation for flow and pull.

Capture the accumulated learning about a process up to a point in

time by standardizing today’s best practices.

Allow creativity and individual expressions to improve upon the

standard.
Principle: 7
Use visual control so no problems are hidden.

Use simple indicators to help people determine immediately

weather they are in a standard condition or deviating from it.

Avoid using a computer screen when it moves the workers

focus away from the workplace.

Design simple visual systems at the place where the work is

done, to support flow and pull.
Principle: 8
Use only reliable, thoroughly tested technology that serves
your people and process.

Support people not replace them by technology.

Analyze impact of new technologies on existing process.

Involve stakeholders

Encourage to consider new technologies while seeking for new

approach.
Principle: 9
Grow leaders who thoroughly understand the work,
live the philosophy and teach it to others.

Don’t buy leaders from outside.

Role model’s of company’s philosophy

Must understand daily work in great details.

Principle: 10
Develop exceptional people and teams who follow your company’s
philosophy.

Create strong stable culture in which company values and beliefs are
widely shared and lived out over a period of many years.

Set a few workers who have the ability to work hard to reinforce the
culture continually.

Make a continuous effort towards teamwork.

Understand and use motivation theory’s

Principle: 11
Respect your extended network of partners and suppliers
by challenging them and helping them improve.

Maintain Principle of partnership.

Acquire new suppliers.

Enhance relations with the existing suppliers.

Teach “the Toyota way”

Continuation…
Challenge your outside business partners to grow and
develop. It shows that you value them

Set challenging targets and assist your partners in

achieving them.
Principle: 12
Go and see yourself to thoroughly understand the
situation (Genchi Genbustu).

Confirm the fact yourself.

Solve the problems from going to the root causes.

The geography of thought.

Continuation….
Think and speak based on personally verified data.

High level managers and executives should go and see

things for themselves, so they will have more than a
superficial understanding of the situation.
Principle: 13
Make decisions slowly by consensus, thoroughly considering
all options; implement decisions rapidly (Nemawashi).

Do not pick a single direction and go down that one path
until you have thoroughly considered alternatives. When you
have picked, move quickly but cautiously down the path.

Nemawashi is the process of discussing problems and

potential solutions with all of those affected. To collect their
ideas and get agreement on a path forward
Principle: 14
Becoming a learning organization through relentless
reflection (hansei) and continuous improvement (Kaizen).

Once you have established a stable process, use continuous

improvement tools to determine the root cause of the
inefficiencies and apply effective countermeasures.

Protect the organizational knowledge base by developing

stable personnel, slow promotion and very careful
succession systems.
Continuation…
Use Hansei (reflection) at key milestones and after you
finish a project to openly identify all the shortcomings of
the project. Develop countermeasures to avoid the same
mistakes again.

Lean by standardizing the best practices, rather than

reinventing the wheel with each new project and each new
manager.
Any Questions???