This excerpt is from a book by Jeffrey Liker (Developing Lean Leaders at All Levels) and a discussion he had with Akio Toyoda (Chairman of Toyota) as they were emerging from a series of major recalls between 2009-2011 which damaged their reputation and slowed their growth. It describes the range of capabilities very simply, including:
- How concentrating decision rights improves short-term outcomes at the expense of long-term scalability, sustainability, and succession.
- How to mitigate the problem through some organizational structure metrics that ensure succession readiness at all levels.
Chapter 5 – Learning to Coach and Develop Others (Excerpt)
Leaders at all levels value people development enough to give space and time for learning by doing.
When we were working on Toyota Under Fire, I interviewed Akio Toyoda and asked him what they learned from the recall crisis, from the reaction in America, from all the negative publicity that Toyota got? I also noted that there were some analysts arguing that Toyota’s problem was that they were growing too fast. Did Akio agree with that?
He said, “No, I do not agree we were growing too fast. Growth is good. I would say that the rate of growth was faster than the rate of people development.” Toyota was falling down in how well they were developing people as they were rapidly growing, and bringing in a lot of new people. He would not concede that it was impossible to develop those people at the right rate. He would just concede that they were not doing it well enough, and they needed to do better.
Akio gave me an example of when he was first hired into Toyota. His dad agreed he could come work at the company, but only if he started at the bottom like everyone else. His dad wanted him to take the toughest assignment possible, and the toughest assignment was in the Operations Management Consulting Division (OMCD), the boot camp for learning the Toyota Production System.
That is where the tough sensei are. They send you to a supplier, they give you a seemingly impossible challenge, you are in over your head, and you sink or swim. What Akio Toyoda said is that “with the assignment I got with a supplier, when I was first assigned there to understand the root cause, it took me three months.” He said, “If my boss had worked on the root cause, he could have easily done it in three weeks. His boss could have done it within three days. The head of OMCD could have done it in three minutes.” You have a huge gap of three months to three minutes. What do you do if you are the head of OMCD and you have a bunch of people working on projects, and they are taking three months to do what you can do in three minutes? That can be very frustrating watching them flail around and in the meantime projects are not advancing and you have your boss on you because they want results. What is the natural response? Tell them the answer. Give them three days then tell them the answer. Akio Toyoda said that by the year 2000, when Toyota was growing fast, this was happening too often. The coaches that were supposed to be coaches were giving the answers too readily. They were not giving people the space to struggle so they could actually learn how to identify the root cause.
As a countermeasure, Toyota started to go back to the basics of how to teach, how to coach, as well as adding layers of management. For example, in engineering, they ended up in the growth period with perhaps one manager for every 20 to 25 engineers. This is not a good ratio for coaching, so they added in a layer of management with the goal of one assistant manager for every five engineers, going back to the way they used to be.
Reflection Questions
Please think about your own team, company, and career as you work through the questions below. We recommend putting your thoughts into writing and going back to them with at least a weekend of relaxation in between.
- What points resonated with you the most and why?
- What are some examples where you have seen this applied, both good and bad?
- Consider several examples of problems you solve—from opportunity selection through project execution. Look at your current organizational chart.
- Who is directly responsible for making those decisions?
- Who else is capable of making those decisions?
- Who is learning to make those decisions?
- Looking at your organizational structure, do you have the right ratios of job roles in place to optimize for safety, quality, productivity, training, and development?
Additional Resources
- Succession Readiness at All Levels (Article / Evaluation Tool)
- 5-Step Foreman Coaching Outline (Article)
- Resource - Stratified Systems Theory (SST) and Timespan 101 (Video)
- Talent Value Stream (TVS) for Construction Contractors (Video)
Discuss Your Answers? An unbiased but experienced third party can be invaluable for helping you see your business, team, and next steps from a different perspective. We will freely share anything we can to help you build a stronger contracting business. All relationships begin with a simple conversation—let’s schedule time to talk.
