143: Jeffrey Liker

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Joe Krebs speaks with Jeffrey Liker about the second edition of his best-selling book Toyota Way, which added scientific thinking to the core of the original 4P’s. He shares how Kata enables scientific thinking and can be applied across all industries.

Joe has a book “Agile Kata” in the making, if you like to be the first to know when it launches, please visit www.agilekatabook.com.

Transcript:

Agile.FM , Radio for the Agile Community.

[00:00:05] Joe Krebs: Thank you for tuning into another episode of Agile FM. Today, I have Dr. Jeffrey Liker with me. You probably know from a, I would say, famous book with the title The Toyota Way. That is a book we want to talk about today a little bit, but there's so much, much more about Jeff, he is a professor of industrial and operations engineering at the University of Michigan.

He's president of Liker Lean Advisors, and as I said, he wrote not only the Toyota Way, but he also wrote, if I did the count right, nine other books. That relate to Toyota, and there are two books that more recently were published and we'll have a chance in a different episode to talk about those.

One was in June, 2023, Giving Wings to her team with Tilo Schwartz, and we have Engaging the Team at Zingerman's Mail Order and that's more like a comic if you want to see it this way, and he co authored that with Eduardo Lander and Tim Root, so that is the The list of books if I haven't missed anything, but we want to talk a little bit about the Toyota way before we do that.

Welcome to the show though, Jeff.

[00:01:13] Jeffrey Liker: Thank you. Joe.

[00:01:16] Joe Krebs: Awesome. So the Toyota way initially released, I believe 2000, somewhere three, two, somewhere that this book we're talking about is the Toyota way. Second edition. This is also very important. We're talking about the second edition of which, which was released somewhere in the year 2021. Timeframe.

[00:01:34] Jeffrey Liker: Yes. Three, about two years old.

[00:01:36] Joe Krebs: Yeah. And but there is something that happened in that book that is fundamentally different in, in terms of I, I don't know all the change log and everything, but there's one fundamental change, and that is the inclusion of scientific thinking.

[00:01:52] Jeffrey Liker: Right, right. A little over five years ago, Mike Rother than I jointly gave a presentation and the book hit my book Toyota Way was 20 years old. So the 20 year anniversary, and his book to Toyota Kata was, I believe, 10 years old, and. We started talking about the relationship between the two.

Mike was one of my students and he had practiced lean transformation for many years and was very familiar with the Toyota way and all the concepts of Toyota and studied Toyota. And then he came up with this thing called Toyota Kata. And I had to kind of struggle to sort of figure out what it was and what he was trying to add to what we know about Toyota.

And. What he really did was to reverse engineer what Toyota, we call him Toyota Sensei. Sensei is like a master teacher. So what the Toyota Sensei, who are experts on the Toyota production system, do when they work with a new client outside of Toyota, how do they teach it? And they always teach by doing.

And he had a chance to see a lot of companies that these different Toyota masters worked with and their masterpieces. And. Asked the question, What do they have in common? And they're all very successful, like they almost won't even bother working on a project unless they can at least double productivity.

And that just happens almost automatically. And so he knew that they got great results. But the question is, what are they doing. And in fact, each of these masters. It has a bit of an ego, and they think that they're doing it the right way and the best way, and nobody else can do it that way, the way they do, but he found an underlying pattern, which he called scientific thinking, and what he noticed is the first thing they do is they grasp, they call it grasp the situation in Toyota, they go in, they see what's going on, they talk to the top leaders, and they ask, what is it that they're trying to accomplish?

What is their goal? What is their purpose? What are their goals? Why do they want to learn about lean management? What is their vision for what happened? If they were successful, then they go to the Gemba where the activity is, and it could be a factory that they work. They've worked with where they gave you injections for COVID 19.

They've worked with where they made ventilators for COVID 19. They've worked with software houses where they develop software. They don't really care when they will go to the Gemba and they'll see the process and understand the current conditions. So then they'll go back, they'll grasp the situation generally, and then they'll go back and they'll say, here's where you're at.

Here's the challenge for you. Yeah. And the challenge is always big, you know, like we will double productivity or we will reduce costs by 30 percent or something pretty big based on the needs of the company may have runaway late deliveries and there's paying a ton for a premium freight.

And we'll say we will eliminate all shipping and then they will go back to the Gemba with a team of people from the company. And they will teach them how to see, how to understand the process as it is. And Mike calls this the current condition. And then the people in the company will basically wait and expect answers, solutions from the masters.

So what do we do? And the masters will say, that's my question to you. What are you going to do? You see where you are, you see where you want to be. You see all sorts of opportunities. What do you think you should be working on first? And then based on what they say the students say, they they may ask them to go back and look some more.

Or they may say, why don't we try it? Usually what these people come in the company, come up with, because it's a big challenge, they come up with a fairly big thing and they, it might be, for example, in a manufacturing facility, moving equipment around and laying it out as a cell and They said a personal last one.

Can you do this? And they'll say something like, well, we have to talk to engineering and we have to make sure customers okay with this. We have to line up the maintenance people move the equipment. So, I think we really stretch it. Maybe we could do it in a week. And then the trade master will say, good, I'll be back tomorrow and that like starts the process. Now, of course they can't do it in a day what they might have to do it. They can't get all the approvals. So what the person is trying to get them to do is. You don't have to do a hundred percent in one step. Let's try something that's doable and then see what happens.

And then we can learn from it. And then we can think about based on that, what our next step is. Usually what happens is the, like, for example, if they lay out a cell. It'll be a disaster. You'll move the equipment together and they'll realize that the equipment has maintenance issues and it's breaking down and everything stops because they don't have inventory anymore.

And usually they can't, they barely make product and the you know, the mentors say, that's okay. Let's start working on the problems down now that we see what the problems are. You were hiding them before. Now let's start working on the problems one by one. So Mike saw that, and he saw it enough times, that he realized that what the, these Master thinkers were doing.

We're not teaching tools and methods like most of the Westerners were doing with lean. They were teaching a way of thinking. Yeah. And it was actually very scientific. What's your goal? What's your current condition? Right. You know, fairly precisely with measurements and direct observation. And then let's not try to in one step get to the challenge.

Let's break down the problem. And all we really need to understand is our first step. And then after that, our second step, our third step, and each of these steps were structured like experiments. They might ask them, what do you think will happen if we make the cell? And then, you know, the people will say, Oh, well, our productivity will go up or quality will go up.

Let's see what happens. Yeah. It's a disaster. Yeah. So what did we learn from that? We learned that we have a lot of problems that we've been hiding. And now we can see the problems we have to solve them. So, and also they're trying to teach the value of running the experiment, learning from it, which then gives you the next step and gives you the next step.

So that became the basis for what. Mike call Toyota kata. The other part of it was in the meantime, he was studying about neuroscience and cognitive psychology and how we learn and there's a lot of literature that suggests that none of us are natural scientific thinkers, right? We're driven more by biases and the desire to know things, whether we do or not.

So we want a lot of certainty. And we want to be right. We're going to, in fact, fudge the data to make it appear that we're right. That's called confirmation bias, which is really strong in humans. So he realized that to change people, to start to think and act scientifically requires fundamental behavior change.

That's right. Yeah. It means changing our habits. And then he asked the question, how do you change habits? And the literature on, on, on cognitive psychology and neuroscience, as well as Practical experience, for example, with coaching sports teams, it all says the same thing, which we have to practice repeatedly with feedback.

And it's very common enough times it becomes a new habit. So then he said, asked, how do you, how can we practice scientific thinking? And he said, first, we need a model, which we have, which is challenge current condition, first short term target condition, then experiment, then second target condition and experiment.

Then third target condition and experiment. And. Then he said, how can we teach this? And each of those steps has some associated ways of thinking and tools and think practice routines, things to practice. So he laid that out in what he calls the Toyota Kata practice guide, which is pictures and step by step instruction, like, Like a recipe book and he came up with kata, which comes from the martial arts, which mean small practice routines to teach us complex skill by breaking it down and trying the pieces one by one karate.

They'll have the first kata and move the second kata until you learn the first kata. That's right. Correctly.

So it's an evolution.

Yeah, and usually think about, you know, taking a music lesson until you can play the very simple piece. They want. Go on to the next more complicated piece. All right. So, that led to the whole Toyota Kata, which is a model plus the practice routines.

And as you practice them, you begin to think more naturally in a scientific way.

[00:11:20] Joe Krebs: Right. So what's interesting is so when I started looking at Mike Rothers work right on, on Kata, and obviously I read your first edition, came in to the second edition and it just like became more and more eyeopening is these habit changes or like a habits we have and habits we want to change that's the same in the agile community, right?

So we have certain habits of how we. build software or how we release software and go through transformation and all these cultural changes. So it's just like this meta skill. If you want to see it this way, that, that's that's fascinating when I came across this now, I do want to make sure that If I understand this right, this is obviously not that in 2021 Toyota started with scientific thinking.

It was there before, right? It is like something that was carved out as something like it should go into the Toyota way as this core thing. So if you look at

[00:12:10] Jeffrey Liker: Yeah. So that was the, we ended up giving a presentation where we said Toyota way and Toyota Kata play well together as if there were separate things.

And then thinking about some more, I realized that scientific thinking really underlies. What I called in the Toyota way, the four P's of the Toyota way. The first was philosophy, which I refer to as long term systems thinking. And the second is lean processes. The process of trying to work toward one piece flow.

And the third is developing people. In problem solving, which is the fourth "P" and I realized these all are connected through scientific thinking, right? And if you're not thinking scientifically, you can't do any of them. For example, you can't be a system thinker. Yeah. If you're a jelly non scientific thinking is reductionist.

We assume every individual tool operates on its own. So we implement Kanban to get inventory reductions and we implement standardized work to get productivity improvements. So we're seeing isolated tools as opposed to a whole system, which is what Mike called the Toyota production system. So with that, I then started to rethink the book from the point of view of scientific thinking, being at the center.

And also realizing that you can't really talk about lean as if it's a bunch of mechanistic pieces that you individually build and then they just all suddenly fit together. You have to talk about more of an evolutionary learning process. Yeah. Organization.

[00:13:48] Joe Krebs: Yeah. This is interesting. So, I have never consulted for Toyota myself but I was told that the word Toyota Kata does not really, it's not a use, it use Toyota.

[00:13:58] Jeffrey Liker: That was not their word. It was Mike's.

[00:13:59] Joe Krebs: Exactly. Yeah.

[00:14:00] Jeffrey Liker: Description from the outside of what he learned in Toyota. And then he went further and say, the Japanese sensei, they tend to be pretty mysterious Yeah. Yeah, it's light. For example, do it tomorrow. Yeah, we'll come and see. So what should I do now? What do you think you should do now?

Yeah. So they tend to be mysterious, but he realized that if we want to mass distribute this to people that don't have access to those magical Japanese, we need a very explicit and simple methodology. So he developed in great detail, this methodology that in Toyota, they wouldn't think they had to use because they, what they say is that from the day you enter the company, the culture is so strong.

You begin to learn Kaizen.

[00:14:49] Joe Krebs: Yeah. Interesting. So, what was that one of the reasons why you decided to call that core scientific thinking, or was it more like, because it's the thinking and not the tool, it's not the pattern

[00:15:00] Jeffrey Liker: thinking now it turns out. You go back to the first Japanese pamphlet. Really? It was a document for the first Japanese document that describes the Toyota production system.

It says that it's based on scientific thinking. So for people in Toyota, that's not. Unusual. It's not a stretch, but they, and they think of scientific thinking more empirically than theoretically. So there's theoretical science where we just. In the abstract. And then we deduce from that things and we apply the abstract model to a problem.

And then there's inductive science where we look at the phenomena and the empirical reality. And then we induce from that principles and solutions. And so in Toyota, they learned that you need very specific solutions to very specific problems. Yeah. Not general solutions to a whole general class of problems.

So you need both to some degree, but they're much more focused than most on solving this problem right here, right now. Yeah. So when they see product development in software, we're developing a software program, they see it and maybe they see it as a part of product development, but they're not going to come in and say, here's your 10 step roadmap to great software.

They're going to ask, what is your problem? What are you trying to accomplish? What's your goal? Let's go look at your current process. So they want to know the specifics of your situation and your goals. And they want you to learn how to think scientifically, to learn for yourself how to achieve whatever goals you have and adapt and adjust as the environment changes.

[00:16:45] Joe Krebs: It is, it's fascinating also when I open up your new book, the second edition, right? There's also a thing where you design a I don't know if that's the content of your masterclass. I do know that you're teaching a lot of masterclasses but it's really the transition from a mechanistic lean, right?

Organic lean. And if I go through the list of the organic lean, this is just like, it just translates for me, for somebody who has been now, you know, using, learning, applying Kata thinking more and more it just links like one, one, one to one, like two to the scientific thinking too, right?

[00:17:17] Jeffrey Liker: Yeah, the other part is that whatever performance improvement program you have, Whether it's lean or agile or theory of constraints or whatever.

If you look at it from what I call mechanistic point of view, then you're trying to fit square pegs in the round holes, you know, your problems, I want your problems to fit into my model. . and the other expression pill uses, if you have a hammer, everything looks like a nail.

So, You can apply Lean, you can apply Agile, you can apply Six Sigma mechanistically, or you can apply any of those things organically. You start organically, you start with a problem. You want to engage the people who understand the Gemba the reality the best. And you want to teach them how to think differently about their process.

So they developed the skills of problem solving and performance improvement, and you expect to be surprised and you expect that you won't know the answers until you start digging in and trying things,

Mechanistic point of view, you, I have the solution and I'm going to sell you the solution, even though I've never been in your place.

I've never seen your process. I don't know anything about. Yeah, I have the solution for you. That's kind of taking this abstract solution and assuming it's going to apply in the abstract to any similar type of problem. Staying at that theoretical level.

[00:18:49] Joe Krebs: This is this could I want to just take one example.

You know, I want to hear your opinion about this as you do teach these classes, right? When you are surrounded by leaders in those workshops, and you do talk about something like, yeah, I find like the right line here. It's not about like organic, Lean. It would be, it's not a project. It's a journey.

Right. And I would just like to hear like what kind of responses, what do you hear when you introduce a concept like this, in terms of continuous improvement and it's a journey or it's a. From a cultural perspective, it's not like an initiative that starts here and ends in by the end of March or any arbitrary date you, somebody might pick it as an ongoing activity that obviously shifts from a leadership perspective, entirely the view, like, what did you hear when you challenge people?

[00:19:39] Jeffrey Liker: When I teach the masterclass, the people that usually come have titles like director of continuous improvement, vice president operations excellence and then I'll get some people who might be the head of operations or plant manager, but and you're probably this is self selection, but they all agree when we talk about it.

That the approach they have used in the past was very mechanistic and the approach that they believe, particularly after they see it in Toyota. So we do this with Toyota is they see the value of engaging all the people and Leaders acting more as coaches than as disciplinarians. And they said, that's what we need.

So they, they conclude they want to move toward a more organic approach, but then they also feel a little bit concerned and nervous because I said, you know, my boss's boss expects immediate measurable results from everything we do with lean. And if you're telling me that it takes time, if you're telling me that it takes investment in developing people.

And there's a gap, a time gap between the investments we make in developing people, for example, teaching them using Kata and the results that we get, we're going to have a hard time selling that. So what we ended up concluding usually is that you need both, that there is some value in the experts coming in with the tools, eliminating waste and streamlining processes and getting.

Quick results on a more expansive part of the organization. Cause these people are coming in with big companies. They might have 30 or 40 or 50 manufacturing plants and the, and that there's a value in piloting within a smaller area, some of the deeper approaches to changing ways of thinking and changing culture with the successes you have in those models.

You have something to sell to the senior management, come and see this and see how much better they perform. So that's usually the kind of vision they have is that they have to somehow find a balance. And I have a slide that shows like, the balance of justice and they have to find a balance between the more mechanistic, quick, short term and superficial approach.

Deep and a mile wide. And that's deploying the tools and then the more deep one inch wide, a mile deep, the more deep approach to developing people one by one that you would be doing with Kata. So they have to find a balance between those things, and they have to figure that out there through their own scientific thinking journey.

They have to figure it out inside their company by trying things by experimenting. So I asked him instead of leaving here with a whole bunch of solutions. that you're going to bring and implement your company, think about one big challenge that would really make a difference. Your ability to deploy lean, sell lean and define that as a challenge.

Then the next, what do you do next? And they said, well, we have to solve the problem. Okay. So how do you solve the problem? Do you go back there and say, we need standardized work. We need employ work groups that we saw at Toyota. And they said, no, those are solutions. We have to understand the current condition.

First. That's a great, wonderful.

[00:23:09] Joe Krebs: Back to scientific thinking.. This is awesome. Your book was initially the first edition came out as we said of. Several years ago, 2002 or something like that. Why do you think at least from the, from an agile perspective there's other terms floating around. I don't want to go into pick any, right, because it's not a complete list necessarily, but why do we.

I see like a lack of of these terms actually like being used on a more broader level, right? You have sold so many books and people are looking at this and saying this is wonderful material, but the implementation, it seems to be slow in the transition. Like taking companies to lean or even in, in agile transformations, is it, do you think it has something to do with the the culture, like, like, for example, using Japanese terms or something like

that?

[00:24:01] Jeffrey Liker: Yeah, I don't think that so much. I mean, I think there is sometimes a sense that since this is a car company and you have a stereotype picture in your mind of what a car company does. And the first thing you often think about is the assembly line, where you have cars running down the assembly line and people are attaching things to the car.

And you say, well, that doesn't look anything like what I do, so therefore, it doesn't apply to me. So there's a lot of that, you know, we're different. And it could be anything. It could be that we're a manufacturing company, but we make chemical products. It's not like cars going down the line. Or it could be that we're a finance company and we don't make any physical products.

Or it could be that we work with a mining company that does iron ore mining in Australia and we go and we blast and we dig and we have this big batches of stuff. And how do we get to one piece flow? So, the the problem is that you have to shift your thinking from manufacturing. Mechanical solutions.

Like I'm trying to look over here to get solutions that apply in an obvious way to me. You have to shift that thinking to there are some general principles here that have been abstract abstracted that I can then bring to my operations and the people who are well trained and lean or in Kata get very comfortable going into any new environment and not knowing What the solutions are, and then digging in and trying to understand the current condition of that operations.

So this idea of I think the first easy thing to do is to copy solutions like a template. But if you give me a template, I'll just superimpose on my process and I know what to do. And the harder thing is to take a more abstract concept, like I need to define a challenge., even when I take my classes and I asked them to define a challenge, they struggle, you know, the challenges we want to have a culture of continuous improvement.

Well, that's way too abstract. And then if they say, well, the challenges we would want, we'd like five suggestions per employee. That's way too specific. . So finding the right level of the challenge, you know, itself challenging challenges are thinking. And then what do you look at in the current condition?

If it doesn't look like a Toyota plant where you can say it takes 60 seconds for each car and we can break down the steps of attaching window wiper into a reach that takes 2 seconds and, you know, They that's their current condition analysis. Your current condition analysis may be very different if you don't have a routine repeating process.

But there are ways to understand the current condition in any sort of process. And even and I remember Deming saying that if you don't think you have a process, you can't improve anything. So, that even that idea that, you know, we develop software, and every software project is different. And the process is that we understand what the customer wants, and we do it.

There's no process beyond that. You know, so that Just understanding there are processes, there are habits, there are routines that you have and you need to shine a light on them and understand them, and then figure out from where you are how to start to move in the direction. of the ideal model you have in your head.

That, you know, it takes a, it takes thinking. Yeah. It's thinking is tiring.

[00:27:36] Joe Krebs: Well, that's my recommendation to all of the listeners out there. When I went down the journey and extracted. By doing exactly what you just said, like looking at that material and extracting information saying like, okay, this is not about Toyota.

This is not about this. This is about, you know, how would this apply a map to the agile world? I'm just calling it agile Kata out because of the making a dereferencing it to the Toyota. Brand, let's say in this particular case, but the thinking is the same in terms of the scientific thinking, but surrounding it with agile principles and, you know,

[00:28:12] Jeffrey Liker: last thing I'd like to say is that as I dug into agile and you and I met.

Menlo Innovations, which is kind of a benchmark for Agile and software development. And I looked at what they're doing there, which Richard Sheridan we're doing. And I saw lots of similarities to the Toyota way. And I saw also a lot of similarities to Toyota Kata. And I met, worked on Zingerman's mail order with Tom Root, who is one of the owners.

He was originally an IT guy. So the backbone of the mail order business is the IT system. And what I discovered, and I've talked to you and I've talked to a lot of different IT people, what I discovered is that a lot of the concepts of scientific thinking are actually quite natural for programmers, you know, see, if I think in terms, if I say we need to think in terms of systems and how the parts interact, and I go into a manufacturing environment, they might think Treat me like I'm from another planet, but the software guy will say, of course, and then the idea that you have to have a vision for what the software is going to do and understand the customer.

And then you have to break that down into small elements of some sort. Call them features, and then you need to develop one feature at a time and then compile them, make sure they work together as a system, and then build the next feature and compile it. And it's a step by step learning process, breaking the big problem into small pieces and then solving each problem one by one.

That idea just you know, a software program said, how do you do it any other way? So the high level model of the Kata makes perfect sense. Within the world of software development, but how to do that in a sort of structured systematic way and make it part of the culture and natural.

For example at Menlo Innovations, they do unit testing. And if I say unit testing to a software program and say, of course, we know what that is. Let's go and see your program and show me the unit test you've conducted.

Exactly. And this kind of, yeah, and it's got to be hopefully more and more examples like this, right?

Than than the one you're naming. And so I think somebody might be listening to this. Or reading the second edition of your book of the Toyota way might be building these bridges to whatever environment they are in, right?

About in, in the Toyota way I do write about Menlo innovations. And so I, so that's another thing I did in the new edition is add more service examples and software examples and examples from other places, which I didn't have at the time I wrote the original book, I was just describing.

So that's in the book. And it. The thinking way is still the same and one of the things that happened with Richard and to tell you the truth is that he started to get kind of turned off by a lot of the agile examples he was seeing, because they like the lean folks were often simply using a tool.

Be that agile was almost equivalent to writing things on post it notes. Yeah, and he has all culture. He calls it deliberate culture. He had to develop the whole culture. Out of pairs, paired programming and programs learning from each other and sending what he calls technical anthropologists out to the customer to really deeply understand the Gemba and how they're using software and getting the customer in week by week, every single week to test the software and give feedback to the team.

So there's a whole set of practices that he had to create as the standard for the culture of Menlo. That it took an awful lot of work and it was much more than buying a lot of post it notes.

[00:32:08] Joe Krebs: Yes, and maybe that was one of the reasons why he decided when we all agreed on we're going to meet in Ann Arbor and it was in September 23 we'll all come together and it was Mike it was you and several others and Richard Sheridan was the first one who says and count me in and I'm offering my office space for this because it's so important.

[00:32:25] Jeffrey Liker: So yeah, well he yeah so he didn't understand Kata at first but then I understood it. And he said, yeah, that's pretty much what we do. Isn't it? Then he had to, you know, he then added some things to what they do because they weren't working in a deliberate way using the scientific approach of kind, but the overarching way that they worked and developed all their software was very much the vision, current state, right down to small pieces, solve one problem after another with very quick feedback.

Correct feedback, then get it to work. One of the interesting things about Menlo innovations projects, cause they're developing customer software, none of it's off the shelf. And they, if they do a one year project in the 52nd week, the only thing they have to get right is one week of work because 51 weeks of work works perfectly.

So there's basically zero, almost zero rework and they have a hundred percent customer satisfaction. The customer takes the software out of the box and they just start using it..

[00:33:37] Joe Krebs: I want to thank you Jeff for some insights on the second edition of the Toyota Way. If the second edition is It's only somewhat successful as the first edition in terms of sales of books.

Thousands of books will be sold and thousands of readers out there will be exposed to scientific thinking and it's a good thing through your materials. I want to thank you for that. And also, yeah, just like, to everybody out there, if you are interested go to the show pages, I'm going to list Jeff's books and obviously ways of learning about Kata in a way to apply that in the agile context, I have some additional pointers here of where to go, what to do first and second, and obviously the Kata Bookshelf is growing thanks to you, Jeff, too, and and many more ways to learn about scientific thinking.

Thank you, Jeff.

[00:34:27] Jeffrey Liker: You're welcome. It's my pleasure, Joe. Take care then.