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strategy and business
 / Summer 2008 / Issue 51(originally published by Booz & Company)


Jeffrey Liker: The Thought Leader Interview

Liker’s latest book is an effort to explain how one company can gain competitive advantage in all these arenas at once. His approach can be boiled down to a phrase: slowly, deliberately, holistically, and through the development of its people. The book is titled Toyota Culture: The Heart and Soul of the Toyota Way (McGraw-Hill, 2007). Coauthored with Michael Hoseus, a former Toyota manufacturing and human resources director, it examines the “human systems” at the automaker. Specifically, it analyzes how Toyota selects, develops, motivates, trains, and empowers its employees. Now an acknowledged expert on lean systems, Liker has worked to implement these techniques at such organizations as Hertz, Caterpillar, Johnson Controls, Harley-Davidson, and the United States Navy — admittedly with mixed results. “Lean is a difficult journey, and most companies simply are not made with the right mettle to complete it,” he notes.

During an in-depth conversation at a corporate manufacturing summit sponsored by strategy+business in Chicago last autumn, Liker discussed his evolution as a chronicler of lean production, why Western companies still struggle to implement lean principles, and the reasons for his concerns that apparent signs of progress may be illusory for many companies.

S+B: If Toyota didn’t exist, which company would you have picked to learn manufacturing lessons from?
LIKER: I don’t really know. I feel like before I discovered Toyota I was kind of lost. I was interested in socio-technical systems theory [a concept that proposes jointly optimizing social and technical systems to achieve high performance]. I was thinking and talking about things like self-directed teams and learning organizations, and all those concepts were present at Toyota. In other companies, there would be an experiment in socio-technical systems, and it would have success for a certain period of time before it would fall apart. So either you be­come an eternal optimist and say, “Somehow or somewhere, this is going to work” or you start to get more jaded, thinking that the concept is just not realistic.

Toyota gave me optimism. And as I got closer to the company I decided that I could, indeed, learn a lot from a really exceptional company that illustrates so many different ideas that I was attracted to, particularly those involving lean manufacturing: reducing lead time by eliminating waste, dealing with suppliers in a revolutionary way, practicing efficient planning and problem solving. And I was partial to the value that Toyota has gained from long-term thinking and the way its overall philosophy guides its strategies for the company. There were so many pieces of the puzzle that all fit together in Toyota’s case.

The Perils of Leapfrogging

S+B: It’s not unusual now to find many companies in the West adopting lean techniques — or at least giving lip service to them. But in the 1980s, lean manufacturing was far less widely known. Can you describe the contrast between Toyota and the Western manufacturers that you have worked with on lean management?
LIKER: In the mid-1990s, I got involved in helping Ford Motor Company develop the Ford pro­duction system, which was largely based on the Toyota production system. Ford wanted to know everything that it could possibly know about Toyota. And that was a great opportunity, because a lot of the fundamental ideas for the Toyota production system came from Henry Ford’s original production system — his writings and philosophies as well as Toyota’s visits to Ford back in the 1930s and ’40s. So this was kind of bringing things full circle.

It would have been a good idea if Ford had stuck to its goal of learning from Toyota, but instead a management consulting firm convinced Ford’s executives that the company needed to leapfrog Toyota. The pitch was, “If we simply copy Toyota, we can only be as good as Toyota, but we’re trying to compete with and be better than Toyota.”

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