Toyota Kata: Managing People for Improvement, Adaptiveness, and Superior Results

organization, in any business, to do what it takes to match Toyota’s

performance.

This is not the first book in which Mike Rother presents path-

breaking insights into Toyota. He advanced the business world’s under-

standing of Toyota’s methods light-years in his 1998 book Learning to

See, coauthored with John Shook. A brief look at the message of

vii

viii

Foreword

Learning to See explains how Toyota Kata advances that understanding

yet another order of magnitude.1

Learning to See describes and explains a mapping tool Toyota uses

to “see” how work moves from the start of production to delivering

finished product to the ultimate customer. Known inside Toyota as

“material and information flow mapping,” Rother, Shook, and pub-

lisher Jim Womack renamed Toyota’s tool “value-stream mapping”

and explained it for the first time in their book. Thanks to the enor-

mous success of Learning to See, value-stream mapping became one

of the most widely used tools to teach and practice Toyota’s vaunted

production system.

With the value-stream mapping tool, Rother and Shook show

how to use many of Toyota’s well-known techniques systematically to

change a conventional batch-oriented mass-production factory flow

— replete with countless interruptions and massive delays—into a

flow resembling what one finds in a typical Toyota factory. Familiar

names for some of these techniques are takt time, andon, kanban,

heijunka, and jidoka. For most students of Toyota, Learning to See

was the first extensive and clear explanation into how to use Toyota’s

techniques to improve across an entire facility.

That book, however, does not explore why and how these tech-

niques evolved, and continue to evolve, at Toyota. Although Learning

to See provides a monumental step forward in understanding how

Toyota achieved the remarkable results it has enjoyed for over 50 years,

it does not reveal why others, after implementing Toyota-style tech-

niques, still seem unable to emulate Toyota’s performance. How does

Toyota develop its solutions? What specific process do they use? Now,

in Toyota Kata: Managing People for Improvement, Adaptiveness, and

Superior Results, Mike Rother shows us this next vital layer of Toyota

practice.

The central message of Toyota Kata is to describe and explain

Toyota’s process for managing people. Rother sets forth with great clar-

ity and detail Toyota’s unique improvement and leadership routines, or

kata, by which Toyota achieves sustained competitive advantage. The

transformative insight in Toyota Kata is that Toyota’s “improvement

Foreword

ix

kata” and “coaching kata” both transcend the results-oriented level of

thinking inherent in the management methods still used in most com-

panies in the Western world.

The findings in Toyota Kata confirm my own interpretation of what

I observed so often in Toyota operations since my first study mission to

Toyota’s giant facility (TMMK) in Georgetown, Kentucky, in 1992.2

What distinguishes Toyota’s practices from those observed in American

and other Western companies is their focus on what I call “managing

by means,” or MBM, rather than “managing by results,” or MBR. As

far back as 1992, I learned from President Fujio Cho and members of

his management team at Georgetown that Toyota steadfastly believes

that organizational routines for improvement and adaptation, not

quantitative/financial targets, define the pathway to competitive advan-

tage and long-term organizational survival.

In this era, business organizations also have a great influence on

the nature of society. How these organizations operate and, especially,

the ways of thinking and acting they teach their members define not

only the organizations’ success but great swaths of our social fabric as

well. While a rapid advance of knowledge about human behavior is

now under way, those scientific findings are still too far removed from

the day-to-day operation of our companies. Business organizations

cannot yet access and use them to their benefit in practical ways.

Because Toyota Kata is about developing new patterns of thinking and

behavior in organizations, it provides a means for science to find appli-

cation in our everyday lives. The potential is to reach new levels of per-

formance in human endeavor by adopting more effective ways of

working, and of working together.

In my opinion, the greatest change Mike Rother’s Toyota Kata can

bring to the non-Toyota business world is to replace traditional finan-

cial-results-driven management thinking with an understanding that

outstanding financial results and long-term organization survival follow

best from continuous and robust process improvement and adaptation

—not from driving people to achieve financial targets without regard

for how their actions affect processes. What has prevented this change

from happening before now is the lack of a clear and comprehensive

x

Foreword

explanation of how continuous improvement and adaptation occur in

Toyota, the only company I know in the world that truly manages by

means, not by results. That explanation is now available to anyone who

studies Mike Rother’s findings and message in Toyota Kata.

H. Thomas Johnson

Portland, Oregon

Spring 2009

Notes

1 Mike Rother and John Shook, Learning to See: Value Stream Mapping

to Add Value and Eliminate Muda (Cambridge, Massachusetts: Lean

Enterprise Institute, 1998).

2 I recount my findings from these study missions in Chapter 3 and

other parts of H. Thomas Johnson and Anders Broms, Profit

Beyond Measure: Extraordinary Results Through Attention to Process

and People (New York: The Free Press, 2000; and London: Nicholas

Brealey Publishing, 2000 and 2008).

Acknowledgments

T hank you to the many dozens of people who have given me

access to their companies and factories, who worked with me

or in parallel in testing ideas, engaged in discussion about

what we were learning, critiqued my thoughts, and were happy to

keep going.

This book also reflects an ongoing dialogue with an ardent group

of fellow experimenters, whom I count as colleagues, mentors, and

friends. Thank you to: John Shook (who was coincidentally preparing

a book on a related topic), Professor H. Thomas Johnson (Portland

State University), Dr. Ralph Richter (Robert Bosch GmbH), Gerd

Aulinger (Festool), Jim Huntzinger, Professor Jochen Deuse (Technical

University Dortmund), Dr. Andreas Ritzenhoff and Dr. Lutz Engel

(Seidel GmbH & Co. KG), Tom Burke and Jeff Uitenbroek (Modine

Manufacturing Company), and Keith Allman (Delta Faucet

Company).

Thank you also to a few exceptional people who over the years

have given me support, input, or guidance that opened doors,

moved my horizons, and created new possibilities: my wife, Liz

Rother, Dr. Jim Womack (Lean Enterprise Institute), Professor

xi

xii

Acknowledgments

Daniel T. Jones (Lean Enterprise Academy), Mr. Kiyoshi Suzaki,

Professor Jeffrey Liker (University of Michigan), and my daughters,

Grace and Olivia.

And, last but not least, a deep bow to Toyota for giving us such an

interesting subject about which to learn.

Introduction:Transforming

Our Understanding of

Leadership and Management

I magine you have a way of managing that generates initiative among

everyone in the organization to adapt, improve, and keep the organ-

ization moving forward. Imagine that although this method is dif-

ferent from how we currently manage, it is ultimately not difficult to

understand. That is the subject of this book, which describes a way of

bringing an organization to the top, and keeping it there, by influencing

how everyone in it, yourself included, thinks, acts, and reacts.

In many organizations there is an unspoken frustration because of

a gap between desired results and what really happens. Targets are set,

but they are not reached. Change does not take place.

The music industry’s major labels, for example, were broadsided

by digital music downloads, even though the widespread popularity of

compiling homemade mix cassettes, starting over 30 years ago, indi-

cated that the market was there. For several decades Detroit’s automak-

ers chose not to focus on developing smaller, more efficient vehicles for

their product portfolios, despite repeated signals since the 1970s that

there was a growing market for them. More recently, PC industry

giants were late to develop compact, Internet-oriented laptops tailored

for Web surfing, e-mail, sharing photos, downloading music, and

watching videos, even though many people, sitting in plain view in

coffeeshops, use their laptop primarily for these tasks.

xiii

xiv

Introduction

Our reaction to the fate of the music industry, the automakers, the

PC companies, and hundreds of organizations like them is predictable:

we blame an organization’s failure to adapt on poor decision making

by managers and leaders, and we may even call for those leaders to be

replaced. Yet can there really be so many managers and leaders who

themselves are the problem? Is that the root cause? I can assure you

that we are on the wrong path with from-the-hip assertions about bad

managers, and that hiring new ones, or more MBAs, is not going to

solve this problem.

So what is it that makes organizations fall behind and even totally

miss the boat, and what can we do about it? What should we change, and

to what should we change it? Once you know the answers to these ques-

tions, you will be even more capable of leading and managing people, and

of ensuring that your organization will find its way into the future.

Most companies are led, managed, and populated by thoughtful,

hardworking people who want their organization, their team, to suc-

ceed. The conclusion has become clear: it is not the people, but rather

the prevailing management system within which we work that is a cul-

prit. A problem lies in how we are managing our organizations, and

there is a growing consensus that a new approach is needed. But we

have not yet seen what that change should be.

Business authors sometimes suggest that well-established, success-

ful companies decline, while newer companies do well, because the

new companies are not encumbered by an earlier, outmoded way of

thinking. On the surface that may seem true, but the important lesson

actually lies one step deeper. The problem is not that a company’s

thinking is old, but that its thinking does not incorporate constant

improvement and adaptation.

Drawing on my research about Toyota, I offer you a means for

managing people, for how leaders can conduct themselves, that is

demonstrably superior to how we currently go about it. I am writing for

anyone who is searching for a way to lead, manage, and develop people

that produces improvement, adaptiveness, and superior results. You

may be an experienced manager, executive, engineer, or perhaps you are

just starting to learn about or practice management. Your organization

Introduction

xv

may have only a few people or it may have thousands. You are success-

ful, but you want to be better and still relevant tomorrow.

With that in mind, here is my definition of management:

The systematic pursuit of desired conditions by utilizing human

capabilities in a concerted way.

Since we cannot know the future, it is impossible to say what sort

of management systems we will be using then. However, precisely

because we cannot see ahead we can argue the following: that an effec-

tive management system will be one that keeps an organization adjust-

ing to unpredictable, dynamic conditions and satisfying customers.

Situations may always be different from place to place and time to

time, so we cannot specify in advance what should be the content of

people’s actions. Leading people to implementing specific solutions

such as assembly cells, Six Sigma tools, kanban, diesel or hybrid power

trains, today’s high-margin product, and so on will not make an organ-

ization adaptive and continuously improving. Of greater interest is

how people can sense and understand a situation, and react to it in a

way that moves the organization forward.

One of the best examples we currently have of an adaptive, contin-

uously improving company is Toyota. Of course, Toyota makes mistakes

too, but so far no other company seems to improve and adapt—every

day in all processes—as systematically, effectively, and continuously. Few

companies achieve so many ambitious objectives, usually on time and

within budget.

How Does Toyota Do It?

We have known for a long while that Toyota does something that

makes it more capable of continuously improving than other compa-

nies, and by now we have recognized that it lies in its management

approach. But how Toyota manages from day to day and thereby

embeds continuous improvement and adaptation into and across the

organization has not yet been explained.

xvi

Introduction

That is about to change.

In the ongoing effort to understand and describe what Toyota is

doing, most books provide lists of the organization’s practices or prin-

ciples. The individual points may all be correct, yet making lists

circumvents explaining how Toyota manages people, and as our now

20 years of unsuccessfully trying emulate Toyota’s success shows, such

lists are not actionable. This is because an organization’s collection of

practices and principles at any point in time is an outcome that springs

from its members’ routines of thinking and behavior. Any organiza-

tion’s competitiveness, ability to adapt, and culture arise from the

routines and habits by which the people in the organization conduct

themselves every day. It is an issue of human behavior.

The evidence of the last 20 years indicates that trying to copy

or reproduce another company’s tools, techniques, or principles does

little to change an organization’s culture, its way of doing things. For

example, how do you get people to actually live principles? On the

other hand, focusing on developing daily behavior patterns is a lever-

age point because, as the field of psychology shows us, with practice,

behavior patterns are changeable, learnable, and reproducible.

What has been missing, and the gap that Toyota Kata fills, is a

look inside the engine room, that is, a clear explanation of daily

behavior patterns at Toyota and how they are taught. By describing

these underlying thinking and behavior routines, Toyota Kata estab-

lishes the context within which the Toyota practices previously

observed and written about are developed and function. This gives

us new power.

This book describes two particular behavior routines, habits or

patterns of thinking and conducting oneself, that are practiced over

and over every day at Toyota. In Japan such routines are called kata.

These behavior patterns are not visible, are not described in Toyota

documents, and it takes a long time to recognize them. Yet they are

how Toyota leads and manages its people. These two kata are taught to

all Toyota employees and are a big part of what propels that company

as an adaptive and continuously improving organization. If you want

to understand Toyota and emulate its success, then these kata, more

Introduction

xvii

than the company’s techniques or principles, are what you should be

studying. Toward that end, they are presented here for you.

Toyota’s intention in using these kata is different enough from our

management style that, from the perspective of our way of doing things,

we do not immediately understand or see it. However, I think we are now

close to a eureka or “lightbulb” moment, a different way of viewing, inter-

preting, and understanding what Toyota is doing. Once we understand

how Toyota uses the two kata described in this book, there can be a shift

in our perception that will enable us to progress further, because once we

recognize the underlying pattern in how something works, the subject

becomes easier to grasp. “The penny finally dropped and now I under-

stand it.” The kata presented here cannot be explained in just one chap-

ter, but the penny eventually drops, and once you get it they are not so

difficult to comprehend. This makes sense too, since Toyota would like

everyone in the organization to practice and utilize them.

This Book Will Help You Get It

The new information that is presented here does not supplant what has

already been written about Toyota, although it will require some adjust-

ment in how we have thus far approached adopting “lean manufacturing.”

The objective is that you will gain a much more useful understanding of

how Toyota manages to achieve continuous improvement and adaptive-

ness, which will tell you a lot about Toyota as a whole, and a clearer view

of what it will take to develop such behavior patterns in a non-Toyota

organization. To do that, we’ll tackle two overarching questions:

1. What are the unseen managerial routines and thinking that lie

behind Toyota’s success with continuous improvement and

adaptation?

2. How can other companies develop similar routines and think-

ing in their organizations?

This book presents behavior patterns at Toyota at a level where we

are talking about psychology in organizations rather than just Toyota.

Although the behavior routines presented here were discovered

xviii

Introduction

through research in production settings, they are universal and appli-

cable in many different organizations, old or new, manufacturing or

otherwise, from top to bottom. This is about a different and more

effective way of managing people.

How I Learned

I have never been a Toyota employee and I have not worked in a Toyota

facility. In retrospect this handicap turned out to be an advantage for

two reasons:

1. I had to figure things out myself by trying them, by experiment-

ing, in real factory and managerial settings.

2. After numerous iterations of experimentation I began to notice

patterns of thinking and behavior that are different from our

prevailing managerial routines. These are the differences that

Toyota insiders tend to overlook because they lack points of

comparison, and that Toyota visitors, observers, benchmarkers,

and interviewers will not see at the surface.

Most of the findings in this book are based on hands-on experimen-

tation and firsthand observation working with a great many organiza-

tions. This iterative “test it yourself ” approach takes a lot of time but

provides considerably deeper understanding and insight than can be

gained through benchmarking or interviewing alone. The lessons here

come from several years of:

(cid:2) Applying certain technical and managerial Toyota practices in

non-Toyota factory settings. This involved iterative trials, with

particular attention paid to what did not work as intended, inves-

tigating why, adjusting accordingly, and trying again. This experi-

mentation approach is referred to as Plan-Do-Check-Act (PDCA).

(cid:2) Periodically visiting Toyota group sites and suppliers, and meet-

ing with a variety of Toyota employees and former employees,

in order to make observations and discuss recent findings.

The work involved a regular interplay between these two aspects of

the research, with one potentially influencing the direction of the

Introduction

xix

other as I went back and forth between them. To facilitate and support

this reciprocation, I maintain and regularly update a written docu-

ment, to reflect on what is being learned and what the next questions

are. This document not only captures learning, it also ensures that

communication is focused on facts and data as much as possible. You

are, essentially, holding the current, civilian version (as of this writing)

of that document in your hands. This is how I have been distilling out

fundamental but not immediately visible aspects of Toyota’s approach,

what is behind the curtain, so to speak.

Note that Toyota does not utilize some of the terminology that is

introduced here. To help us understand the way that Toyota people

think and operate, I had to create some new terms. A Toyota employee

may respond to a particular terminology with, “I don’t know what that

is,” but they will work and behave as described here.

The five parts of this book mirror how the research unfolded.

(cid:2) Part I sets the challenge of long-term organizational survival.

(cid:2) In Part II we use that lens to examine how we are currently

managing our organizations. This is important as preparation,

because to comprehend what is different about Toyota’s think-

ing and behavior routines, we first have to understand our own.

(cid:2) This then leads to the next question: How should people in an

organization act so that it will thrive long term? A big part of

Toyota’s answer to that question is what I call the “improvement

kata,” which is examined in detail and is the heart of the book.

The penny should drop for you in Part III.

(cid:2) But the improvement kata does not come to life in an organiza-

tion simply because it is a good idea. The next logical question

was: How does Toyota teach people improvement kata behav-

ior? The answer is what I call Toyota’s “coaching kata,” which is

described in Part IV.

(cid:2) Finally, after presenting these two Toyota kata the question

becomes: How do we develop improvement kata behavior in

non-Toyota organizations? That is the subject of Part V, how

other companies can develop their own kata to suit their own

organizations, and of most of my current research.

xx

Introduction

The research cycle never ends, of course, which means this book

reflects a level of understanding at a point in time. There is more to

learn and there are undoubtedly some mistakes here. It is an interim

report, as is any book, because nothing is the last word.

A final comment: The way of thinking and acting described here

has a potential beyond the business world. It shows us a scientifically

systematic and constructive way of dealing with problems, uncertainty,

and change, in other words, how we can work together and achieve

beyond what we can see. The more I studied Toyota, the more I became

intrigued by the broader possibility of such life lessons, and I invite you

to think about them too as you go through this book.

M.R.

Spring 2009

Ann Arbor, USA/Cologne, Germany

TOYOTA

K ATA

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Part I

The Situation

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Chapter 1

What Defines a Company That

Thrives Long Term?

T he applause dies down as the next conference speaker

approaches the podium. The presentation is going to be

about Toyota, and in his first slide the speaker presents some

impressive statistics that demonstrate Toyota’s superior performance.

The audience is nodding appreciatively.

For about two decades now this scene has been repeated countless

times. So many books, articles, presentations, seminars, and workshops

have begun with statistics about Toyota just like these:

(cid:2) Toyota has shown sales growth for over 40 years, at the same time

that U.S automakers’ sales reached a plateau or decreased.

(cid:2) Toyota’s profit exceeds that of other automakers.

(cid:2) Toyota’s market capitalization has for years exceeded that of GM,

Ford, and Chrysler; and in recent years exceeded that of all three

combined.

(cid:2) In sales rank, Toyota has become the world leader and risen to

the number two position in the United States.

Of course, such statistics are interesting and useful in only one

respect: they tell us that something different is happening at Toyota.

The question then becomes: What is it?

3

4

Toyota Kata

How have we been doing at answering that second question? Not

so well, it seems. Books and articles about Toyota-style practices started

appearing in the mid 1980s. Learning from such writings, manufactur-

ers have certainly made many improvements in quality and productiv-

ity. There is no question that our factories are better than they were

20 years ago. But after 15 to 20 years of trying to copy Toyota, we are

unable to find any company outside of the Toyota group of companies

that has been able to keep adapting and improving its quality and cost

competitiveness as systematically, as effectively, and as continuously as

Toyota. That is an interesting statistic too, and it represents a consensus

among both Toyota insiders and Toyota observers.

Looking back, we naturally put Toyota’s visible tools in focus

first. That is where we started—the “door” through which we

entered the Toyota topic. It was a step in the learning process (which

will also, of course, continue after this book). Since then I went back

to the research lab—several factories—to experiment further, and

present what I learned in this book. The visible elements, tools, tech-

niques, and even the principles of Toyota’s production system have

been benchmarked and described many times in great detail. But just

copying these visible elements does not seem to work. Why? What is

missing? Let’s go into it.

We Have Been Trying to

Copy the Wrong Things

What we have been doing is observing Toyota’s current visible practices,

classifying them into lists of elements and principles and then trying to

adopt them. This is reverse engineering—taking an object apart to see

how it works in order to replicate it—and it is not working so well.

Here are three reasons.

1. Critical Aspects of Toyota Are Not Visible

Toyota’s tools and techniques, the things you see, are built upon

invisible routines of thinking and acting (Figure 1-1), particularly in

management, that differ significantly from those found in most

What Defines a Company That Thrives Long Term?

5

Figure 1-1. Toyota’s visible tools and techniques are built upon invisible

management thinking and routines

companies. We have been trying to add Toyota Production System

practices and principles on top of our existing management thinking

and practice without adjusting that approach. Toyota’s techniques will

not work properly, will not generate continuous improvement and

adaptation, without Toyota’s underlying logic, which lies beyond our

view.

Interestingly, Toyota people themselves have had difficulty articu-

lating and explaining to us their unique thinking and routines. In

hindsight this seems to be because these are the customary, pervasive

way of operating there, and many Toyota people—who are tradition-

ally promoted from within—have few points of comparison. For

example, if I ask you what you did today, you would tell me many

things, but you would probably not mention “breathing.” As a conse-

quence, we cannot interview people at Toyota and expect to gain, from

that alone, the deeper understanding we seek.

2. Reverse Engineering Does Not

Make an Organization Adaptive

and Continuously Improving

Toyota opens its factory doors to us again and again, but I imagine

Toyota’s leaders may also be shaking their heads and thinking, “Sure,

come have a look. But why are you so interested in the solutions we

develop for our specific problems? Why do you never study how we go

about developing those solutions?” Since the future lies beyond what

we can see, the solutions we employ today may not continue to be

6

Toyota Kata

effective. The competitive advantage of an organization lies not so

much in the solutions themselves—whether lean techniques, today’s

profitable product, or any other—but in the ability of the organization

to understand conditions and create fitting, smart solutions.

Focusing on solutions does not make an organization adaptive. For

example, several years ago a friend of mine visited a Toyota factory in

Japan and observed that parts were presented to production-line oper-

ators in “flow racks.” Wherever possible the different part configura-

tions for different vehicle types were all in the flow racks. This way

an operator could simply pick the appropriate part to fit the particu-

lar vehicle passing down the assembly line in front of him or her,

which allows mixed-model assembly without the necessity of changing

parts in the racks. Many of us have been copying this idea for several

years now.

When my friend recently returned to the same factory, he found

that many of the flow racks along that Toyota assembly line were gone

and had been replaced with a different approach. Many of the parts for

a vehicle are now put into a “kit” that travels along with the vehicle as

it moves down the assembly line. When the vehicle is in an operator’s

workstation, the operator only sees those parts, and she always reaches

to the same position to get the part.

My friend was a little upset and asked his Toyota hosts, “So tell me,

what is the right approach? Which is better, flow racks or kitting?” The

Toyota hosts did not understand his question, and their response was,

“When you were in our factory a few years ago we produced four dif-

ferent models on this assembly line. Today we produce eight different

models on the same line, and keeping all those different part variations

in the flow racks was no longer workable. Besides, we try to keep

moving closer to a one-by-one flow. Whenever you visit us, you are

simply looking at a solution we developed for a particular situation at<...