Management the Toyota Way


REVIEW BY KHOO KHENG-HOR

IN the late 1980s and the early 1990s, the Toyota Motor Company was already no stranger to most MBA students.  

I remember reading about the “miracles” at the New United Motor Manufacturing Inc – NUMMI – which was its joint venture plant with General Motors in Fremont, California, when I was pursuing my MBA at the University of Stirling in Scotland in 1990. 

Hence, I was extremely delighted when my editor assigned me to review this book, The Toyota Way 14 Management Principles from the World’s Greatest Manufacturer which was released this year by McGraw-Hill. It was like a trip down memory lane. In this book, author Jeffrey Liker explains the management systems, thinking, and philosophy that form the foundation of Toyota’s success, thus providing the reader with valuable insights which can be applied to any business or situation.  

The book is divided into three parts:  

Part I carries six chapters which introduces the reader to the present success and history of Toyota. It makes fascinating reading as it goes way back to Toyoda Sakichi who first founded Toyoda (the original name of the company) and describes how TPS – the Toyota Production Systems – has evolved as a new paradigm of manufacturing to transform businesses across industries. 

In Part II, the 14 principles of the Toyota Way as identified by Liker are highlighted with an entire chapter dedicated to each of the 14 principles. For ease of comprehension, I summarised them here as follows: 

Chapter 7 drives home the first principle of basing management decisions on long-term philosophy even if such decision is made at the expenses of short-term financial goals. 

Chapter 8 deals with the second principle of creating continuous process flow to bring problems to the surface. 

Chapter 9 advocates the third principle of using “pull” systems to avoid overproduction. 

Chapter 10 talks about the fourth principle of levelling out the workload. 

Chapter 11 extols the fifth principle of building a culture of stopping to fix problems to get quality right the first time. 

Chapter 12 expands on the sixth principle of standardised tasks being the foundation of continuous improvement and employee empowerment. 

Chapter 13 discusses the seventh principle of using visual control so no problems are hidden. 

Chapter 14 emphasizes the eighth principle of using only reliable, thoroughly tested technology that serves both people and processes. 

Chapter 15 highlights the ninth principle of growing leaders who thoroughly understand the work, live the philosophy, and teach it to others. 

Chapter 16 upholds the tenth principle of developing exceptional people and teams who follow the company’s philosophy. 

Chapter 17 argues the eleventh principle of respecting extended network of partners and suppliers by challenging them and helping them improve. 

Chapter 18 urges the twelfth principle of going and seeing for oneself to thoroughly understand the situation. 

Chapter 19 calls forth the thirteenth principle of making decisions slowly by consensus, thoroughly considering all options, and implementing rapidly. 

Chapter 20 rounds up with the fourteenth principle of becoming a learning organisation through relentless reflection and continuous improvement. 

Part III which comprises only two chapters, discusses how organisations can apply the Toyota Way and what actions they can take to become a lean, learning organization, with one of the two chapters even focusing specifically on applying the Toyota Way principles to service organisations which are not into manufacturing. Although it is a most insightful book, my only grouse is that the overload of information – what to expect since Liker has admitted that the book is the result of 20 years of research comprising visits to Japan and interviews in Toyota facilities there and in the US – makes the reading rather heavy going. It doesn’t help that Liker is an academician for he writes like one.  

As he tries hard to be objective in his writing, and also driven by most academician’s obsession to seek as many views and/or confirmation of opinion as possible, I am often left somewhat confused as to what he is driving at. However, after slogging through the book, I think I won’t be far off to regard the Toyota Way as really being basically about its two main pillars of “continuous improvement” and “respect for people”. I will also caution against adopting the Toyota Way blindly.  

While it is good to learn about how Toyota has used the 14 principles to achieve its current leadership position, it is still necessary for each organisation to seek and develop its own way of doing business. Read this book for yourself and you shall see what I mean. 

(Khoo Kheng-Hor, an author and motivation speaker, can be reached at http: //www.webpoint.com.sg/suntzu or suntzu333@yahoo.com for comments) 

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