An Interview with Dr. Jeffrey Liker about how Toyota utilizes hoshin kanri to tackle climate change.
Interviewed by Kelly Singer, Managing Editor of the Lean Green Institute.
Recognized as the world’s leading authority on the study of Lean Thinking and the Toyota Way, Dr. Jeffrey Liker provides insight in this exclusive interview on how Toyota strives for zero waste in all they do: in the landfill, in their processes and products, and in the abilities of workers to find solutions to do better for the environment.
How is goal-setting different at Toyota?
Toyota was one of the early models for a process called hoshin kanri, or policy deployment. This is a method of aligning goals from the core strategy of the whole company to every individual team member. This is an annual planning process for Toyota that ties into their 10 year vision and 5 year business plan. This requires about 3 months of communication and deep thinking so each level in the organization coordinates with the next level down to sign up for goals and begin thinking about how they will achieve the annual goals. Achieving the goals requires a high level of problem solving skills. Each of their past two global visions have strongly emphasized developing environmentally friendly vehicles and eliminating negative impacts of the company on the environment. Their annual plans have emphasized this in a variety of ways, including developing green cars like hybrid vehicles and hydrogen vehicles, recycling everything, zero landfill use and more. They can deploy these plans effectively and turn them into concrete actions through the hoshin kanri process. Every region, business unit, department, and individual develops plans for how they will contribute to the corporate goal and then through skills in continuous improvement, meets their objectives over the year.
It’s been said that if “everything is important, nothing is important”. It’s clear that Toyota takes sustainability seriously, but they also have a lot of other things going on. How do they ensure success of Environmental Challenges when they’re working on a portfolio of other initiatives?
The hoshin kanri process leads to developing about 4-5 high level company goals. As this cascades down managers, departments, and individual develop their goals to contribute to the critical few that gives them focus. Of course they also have many business goals to perform their daily work. These are high priority goals for improvement.
How does Toyota augment a team member’s experience to think about sustainability improvements in their job?
The most effective Kaizen happens when all team members are skilled problem solvers. In my book, “Toyota Culture: The Heart and Soul of the Toyota Way” that I co-authored with Michael Hoseus, we explain how Toyota has carefully crafted a problem-solving culture and how management’s aim must be on developing employee capabilities and not “tools”.
Toyota Business Practices is the improvement process used for all goals. Employees at all levels are taught and coached on the methodology to enhance their capabilities as problem solvers. At the heart of employee learning and growth is mastering the art of understanding the cause and effect relationship of problems. When you understand the cause, you can create effective solutions.
As an example, when Toyota decided to expand their campus in Torrance, California for Toyota Motor Sales they set as a goal to become LEED gold certified. Rather than outsource this, they put their head of building infrastructure in charge as a project manager. He pulled together a cross-functional team. Their challenge was to do this at the same cost of a conventional building. This is the type of challenge that Toyota leaders are accustomed to.
They worked with an outside architect and builder, but they did much of the innovation internally. For example, they were passing one of their warehouses which uses concrete walls instead of the steel structure you would typically use for an office building. They thought that would be more environmentally friendly and could save some money which they could use for other features like solar panels. They learned that it would limit the height of the building but that would be okay and they could create a larger footprint to compensate. They decided to set up a construction site, first pouring a concrete floor to construct the blocks and install the walls. Afterward they crushed the temporary concrete floor and used that material for different types of gardens. This innovation saved enough money to offset other environmental features that were more expensive and they met their goals. The building was full of environmentally friendly features based on employee ideas, including completely recyclable carpet, chairs made of recycled car seats, art made from recycled rubber tires. In the carpet example, they wanted to match the existing carpet they had in their old business, but the manufacturer of that carpet did not make recyclable carpet. They offered to buy all the carpet from that company if they could achieve 100 percent recyclable with zero noxious gas released. The carpet company worked on it, achieved it, and created a new line of business for themselves. In addition they recycled water and achieved zero use of a landfill.
What lessons can the green movement take from Toyota?
With better problem solvers, we will have a better planet. Sustainability starts and ends with each person and entity understanding the impact of their decisions. Much of the discussion about climate change involves blame and finger-pointing. At Toyota, finding someone or something to blame for a problem that happens on the line is not the point. Blame doesn’t prevent the problem from happening again. To find effective green solutions, we must move beyond blame to problem resolution and prevention which requires investing in people’s problem solving ability.