The Toyota Way

The Toyota Way has often been called “a system designed to provide the tools for people to continually improve their work” and captures 14 principles that are organized into four different sections:

  1. Long-Term Philosophy
  2. The Right Process Will Produce the Right Results
  3. Add Value to the Organization by Developing Your People
  4. Continuously Solving Root Problems Drives Organizational Learning

What I love the most is that there are two focal points for all 14 principles: Continuous improvement and respect for people, which resonates deeply with me given that the values that are core to my company align closely.

The 14 principles are as follows:

  1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
  2. Create a continuous process flow to bring problems to the surface.
  3. Use “pull” systems to avoid overproduction.
  4. Level out the workload (work like the tortoise, not the hare).
  5. Build a culture of stopping to fix problems, to get quality right the first time.
  6. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.
  7. Use visual control so no problems are hidden.
  8. Use only reliable, thoroughly tested technology that serves your people and process.
  9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
  10. Develop exceptional people and teams who follow your company’s philosophy.
  11. Respect your extended network of partners and suppliers by challenging them and helping them improve.
  12. Go and see for yourself to thoroughly understand the situation.
  13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.
  14. Become a learning organization through relentless reflection and continuous improvement.

Building trust, respect, mutual accountability and a culture of learning are all over these aforementioned principles and you can see the ethos through obvious patterns.

I would encourage you to sit and meditate on these things and see what you can draw or pull from them and apply to your business and/or team.

Actually, strike that – what I mean is that you need to observe the behaviors that already exist in your current environment and context and see which of these principles are already “in play” and which ones are far more aspirational than actual.

Effective values are ones that are actually practiced, not just preached!

You see, your values are already present within your team and business because you carry them with you wherever you go – you simply cannot divorce yourself from them. This was a crucial understanding for me as I walked with my team through a values discovery exercise earlier this year.

There are things that we wish we valued and there are things that we actually value; we see them in our daily lives, our behavior, and how we treat one another.

Consequently, if there is a value that you desire your organization to have you must first change it in your personal life as a reflection of this new belief.

As with most things in life, it starts with you, the individual, before it ever gets to someone else – we naturally export who we are to the world! Just make sure that we are all exporting the the “right” stuff!

This reminds me of what my old pastor used to tell me:

Before you can decide what you should do, you must first decide who you want to be.

Andy Stanley

Organizations operate in the same way, form and fashion.


Reflections on The Toyota Way

Here are a few more contextually-relevant thoughts and reflections on the 14 principles as they directly relate to what I am currently, obsessively, working on.

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

We recently had some pretty significant changes in staffing and leadership and one of the issues that had come up was how we all fundamentally understood our short and long-term goals.

Simply-put, it’s easy to say that you hold a “long-term perspective” but if it’s not really true then the decisions that you make as a team will effectively show the opposite. This was happening to us in a handful of ways and so we had to change a few things up.

I’ve been viscerally reminded that every decision that I make as a leader for an early-stage company is tethered intimately with how I see and interpret time. If you can’t get alignment there, then, everything else just falls apart.

2. Create a continuous process flow to bring problems to the surface.

This is also easier said than done, especially in organizations that have decided to be distributed-first (like us).

One of our core values as an organization is “get it all out on the table” and we do this so that we can build a bit of muscle-memory on putting everything out there for the rest of the team to see (and hear).

Some organizations have daily/weekly/monthly ceremonies that help facilitate a “continuous flow of identifying problems” but I’d rather have it built into the core of who we are as a company and how we operate, day-to-day, not waiting on a weekly ceremony or meeting to bring up the issue.

3. Use “pull” systems to avoid overproduction.

I love the quote that starts this chapter a lot:

The more inventory a company has, … the less likely they will have what they need.

Taiichi Ohno

Isn’t that so true?!

The Toyota Way is not about managing inventory; in fact, it’s the exact opposite, where the goal is to reduce or eliminate inventory. This gave birth to the just-in-time manufacturing technique and workflow where, idealy, you’d take a single customer’s order and make a single product just for that order.

Eventually, this helped create a more kanban-esque type of production system which many companies today (not just technology) use as part of how they create products.

There’s a lot to draw from this chapter, but, at the surface level it reminded me that our team needs better accounting into the systems and services that we use so we can minimize waste, especially financial.

4. Level out the workload (work like the tortoise, not the hare).

The conceit here is that you can apply JIT manufacturing but also ask your customers for more time to produce the product. A bit contradictory but if you’re offering your customers something of obvious and great value, then, they will more than likely be willing to wait for it to be delivered.

This is a fascinating concept to think through as a business that’s offering digital goods and services. We’ve done a bit of “manufactured waiting” as we only selectively allow certain folks in, to help us test the product and service.

But, that’s going to change soon.

5. Build a culture of stopping to fix problems, to get quality right the first time.

A bit of a give-and-take when it comes to early-stage companies. Some problems will invariably persist for a long time, simply because of the nature of the problem while others will get immediate attention.

This is very counter to “move fast, break things” philosophy that Silicon Valley has and my company actually has the exact opposite, especially because we’re in #fintech – you simply can’t move fast and break things with people’s money.

Getting quality right means not just a better product – it means greater customer satisfaction and a deeper commitment and emotional connection with our brand.

6. Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.

A bit of a chicken / egg type of issue in early-stage. Process is pretty much what you don’t have for quite some time but you try to build them when you can, when it makes the most sense.

But, it’s hard, in the moment, to know if this particular moment is the “right” time to extricate oneself from the business and then find time to work “on” the business itself.

7. Use visual control so no problems are hidden.

I like this a lot and it speaks to a philosophy of transparency, authenticity, honesty, and quality communication.

Great companies create “visual controls” for their team and their customers – the “magic” doesn’t have to be obfuscated to create that magical, memorable experience, both inside the organization and outside.

8. Use only reliable, thoroughly tested technology that serves your people and process.

Fintech, remember? Duh.

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

Education is a huge part of my own personal value system and I’ve imported that perspective in a big way into my own team. We’ve already spent time and resources on upskilling my team and we provide leadership and executive coaching opportunities for folks on the team.

If you’re not at your peak performance then you’re burning cycles and the only way you can get there is if you’ve got help! The top performers in every category, niche, market, and industry have coaches – why don’t you?

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

Duh?

But, what’s fascinating is how quickly some organizations collapse under the pressure of “hiring quickly” and then they begin to add team member’s who do not fundamentally align with the core team’s philosophy.

It’s so subtle and slow that you’d never notice it, at first, but then you’ll wake up and realize that the very company that you once loved is gone – and you’re not entirely sure when it happened.

Taking all of the necessary time to hire great folks who are already heavily aligned is crucial; except no substitute.

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

I haven’t given this as much thought as it deserves, but, I want to make sure that anyone who interfaces with our company feels like they’ve encountered a different, maybe even refreshingly-different style of organization, one that tries their best to help their partners achieve outsized results.

I want to give this a bit more time, for sure.

12. Go and see for yourself to thoroughly understand the situation.

Part of what makes us product (and company) so awesome is that we have decided to intentionally live and breathe our own product – and I go as far as booting up new initiatives and small “test projects” to fully understand the difficulties that our customers are facing day-in and day-out.

There’s just nothing better than real, empirical data.

We all know this to be true and yet so many of us stay far too removed from our customers and the internals of our own team to know what’s really going on.

This does become harder, especially for some roles like my own, but it’s worth the effort to streamline the communication channels.

13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.

I love this because one of our values is all about counting the cost but what I love here is that they’ve added this critical and specific piece of advice as it relates to execution:

Implement decisions rapidly.

Give a decision the air that it needs to fully breathe in all of the options and considerations, but, once you do, execute with maximum prejudice.

14. Become a learning organization through relentless reflection and continuous improvement.

I think we’re doing okay on this one, as a team, but we can probably up it even more.

A place to share things that you learn.

One of the things that we’ve created in our Slack is a channel called #idtgatt which is short for “it’s dangerous to go alone, take this!” which is a place where we can share things that we’re learning, while we’re learning it.

Doesn’t just have to be about the business as it could really be anything in life! The point is to share, to be relentless with our own personal reflection(s) and to import those into the business and team context so everyone can benefit.

Imagine how powerful this is when done well! It’s a constant source of inspiration coming from intensely personal moments of introspection – what a beautiful thing.

I’ll continue to think through these principles and I’d love to review them sometime next year – I’ll make a note to come back to this post.

Oh, and I also owned a Toyota once:

I really loved this car.

Oh, and if you want a copy of “The Toyota Way,” apparently it’s available for free around the internet in .pdf format.

Get it here:

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