Interview with Jeff Liker: The Toyota Way to Service Excellence

New Book: The Toyota Way to Service Excellence

Earlier this summer, Jeff Liker reached out to me to see if I would be interested in reading an advance copy of the new book he had written with Karyn Ross called The Toyota Way to Service Excellence: Lean Transformation in Service Organizations.

Toyota Way to Service ExcellenceOf course I said yes!

Like most of you, The Toyota Way has been a foundational book in my own Lean learning journey and I have subsequently read many of Jeff’s other books about Toyota and Lean such as the The Toyota Way to Lean LeadershipToyota Talent and Toyota Culture. 

If you work in a service industry – or are a lean practitioner in any industry – I highly recommend adding The Toyota Way to Service Excellence  to your library.

As someone who has primarily worked in healthcare organizations, the book particularly resonated with many of my experiences, challenges, and “ah-has” about lean in service industries. Through research, case studies and personal experiences, Jeff and Karyn help guide our thinking on how we can transform service organizations and ourselves as lean leaders.

The Toyota Way to Service Excellence Giveaway!

Update October 10, 2016 – The giveaway to win a copy of Jeff and Karyn’s new book The Toyota Way to Service Excellence has ended and three lucky readers have won a their own copy of the book!

However, The Toyota Way to Service Excellence: Lean Transformation in Service Organizations is also available now on Amazon or in your local bookstore.

Interview with Jeff Liker

Jeff and I recently had an email and phone conversation about The Toyota Way to Service Excellence and his thoughts about lean in general.

Get the full transcript

I’m also making available the transcript of my conversation with Jeff. Click here if you would like a PDF of the transcript of our phone interview conversation. In it, Jeff expands on examples and case studies that highlight many of the concepts we discussed, but was too lengthy to include in the highlights below.

Highlights

I’ve put together some of the highlights of our conversation in this post. Read on to learn what Jeff had to say!

Why did you specifically decide to focus on service organizations in this book?

Jeff: The Toyota Way presented generic management principles, but they were mainly illustrated with manufacturing examples. I received many requests to write a book about lean in services saying things like: “We can understand that the general principles apply to service processes, but service examples would help us visualize how they apply.”

Over ten years has passed since The Toyota Way and I have learned a lot so this was a good opportunity to update the principles and focus on service examples.

Can you elaborate on how The Toyota Way to Service Excellence can translate across industries – service or manufacturing?

Jeff:  I think in concept the principles of how you work to become excellent and satisfy customers are universal.

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I’ve learned more since The Toyota Way and there are a lot of new ideas in the book.

For example, distinguishing between the macro level and the micro level, can be a helpful construct because people often get hung up doing one without the other.

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You do value stream mapping, and you make certain structural changes at the macro level, but you never really get to daily management to make the local improvements needed to make the macro-structure work.

That wasn’t in The Toyota Way. If I had those ideas included in the original Toyota Way, then in a sense there wouldn’t be any difference between the two books other than the examples themselves, which just are ways for the reader to be able to visualize what it is we’re talking about in cases similar to theirs.

In The Toyota Way to Service Excellence you comment that “Lean management has lost perspective.” How does your book help bring us back to the original intent of Lean management, particularly in regard to service industries?

Jeff Liker:  If you think about the evolution of lean, it really started with Toyota as well as other Japanese manufacturing companies that were providing exceptional quality products, and also innovation. A company like Sony at the time was extremely innovative.

There was this kind of attack. They called it the “Japanese Invasion” in the 1980s of companies that were just better than their Western competition. I think it was partly because they’ve had to be better. The country is so dependent upon exports. They were underdogs so they had to be better.

Toyota got written about as lean because they do have some specific principles around one piece flow, leveling work, stopping when you have a problem, using visual management, and very rigorous problem‑solving.

All the concepts associated with tools like kanban and standard work, were things they had really worked hard on to develop in a pretty formal way internally into a total system.

What was missed was that Toyota is an excellent company as a whole in setting strategy, and they are very passionate about satisfying customers. The concept of striving for perfection is very central in Toyota.

You have a company that wants to be excellent and they care. They really genuinely care, and they work like crazy to constantly be thinking about what customers want over the next 30, 40 years and how they can invest in people to satisfy customers.

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What gets taken from Toyota often are just a few specific tools that to them are not the main show. They’re just kind of a sideshow. Toyota’s perspective is more about being excellent and being great….

I think we’ve lost perspective in that we often narrow cherry-pick tools with the very narrow goal of eliminating waste.

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In Chapter 2 you make a comment that “The Toyota Way came most naturally in Japan”. In my experience living in Japan for 18 months, I found that the Toyota Way is definitely not the “Japanese way”. What is your take on the naturalness (or not) of the Toyota Way in Japan more broadly? 

Jeff: I guess it depends on what aspects of the Toyota Way we are talking about. The craft mentality is alive in so much of Japan and people take pride in their work.

In the 1980s when there was a lot written about Japanese management there were characteristics like slow promotion, constancy of purpose, and extensive training.  Stability of leadership, attention to detail, developing deep skills, and general commitment to the company goals are all very supportive of lean.

In The Toyota Way to Continuous Improvement we have a chapter about a Japanese company we worked with that was a subsidiary of an American company. They were the best in the world in quality, but when we investigated we found it was because of intense job skill training and attention to detail. The overall information and material flow were terrible and they were weak in many of the core lean processes.

One of my consultants worked with them and they were the best students he ever had outside of Toyota. They had so many of the foundational cultural elements and quickly learned the lean tools and spread them broadly and deeply.

Why do you think that the Western world has been quicker to adopt Toyota Way thinking in service industries than Japan, which has a deep practice of the Toyota Way thinking in manufacturing?

Jeff: That is a good question. In the 1980s there was pretty broad adoption of total quality management in the service sector in Japan, but I do not think the service sector had a lot of incentive to streamline operations. The export-oriented companies, mostly manufacturing, focused on operational excellence to gain a competitive edge.

American service organizations have faced tremendous cost pressure and that is often the reason they look to lean as a management model.

But in general America organizations do seem to be more open to experimenting with new management methods.

How much does national culture, which you refer to in Chapter 7, and personal preferences come into play to define the qualities of “service excellence” in your model? 

Jeff: To a considerable degree I think that the customer culture influences what service organizations get good at.

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Most people I know when they visit another country find aspects of service they like and aspects they hate.

Perhaps in part because of our strong individualism in America we expect services to be customized to our individual tastes.

The Japanese are certainly not loud about demanding customized service, though they have very high quality standards and will not go back to an establishment that provides low quality service. They are a more homogenous people than in most countries so that might play a role in having more homogenous tastes. …

Compared to Japan where people typically are at a company for their entire careers, how can we in the West manage the impact of frequent leadership turnover?

Jeff: I suspect that might be the single biggest success factor that separates Japanese organizations from many others outside Japan. The stability of leadership philosophy is so strong in Japan, and certainly in Toyota.

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I have worked with many companies that make game-changing progress only to have a change in senior management who immediately changes to a different program. They came from a company that embraced six sigma, the theory of constraints or some sort of performance management system and they stop supporting the lean folks and bring in their specialists. Or there is a downturn in sales and the lean folks are quickly pushed out. Some great operations manager that has created the best department on every key performance indicator is pushed out.

It is sad to see people embrace lean, get engaged, get excited about levels of performance they never thought were possible only to get beaten down by a new regime.

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In The Toyota Way to Service Excellence we share to the good and the bad and the ugly and readers will be able to identify with our stories of companies that went through these types of ups and downs.

We try to shed some light on why this happens and what might be done about it.

In Chapter 1, you mention Toyota Memorial Hospital, which I have called the “most Lean” hospital in Japan. What was your take on Toyota Memorial’s practice of Lean as compared to other Japanese hospitals or healthcare in the West?

Jeff: I first visited Toyota Memorial in 2005. I had heard they were applying TPS methods. The managing director had been in that position for a few years. He explained that the earlier managing directors wanted to be doctors and not managers and showed no interest in learning from Toyota. He saw great opportunities to improve patient care through operational excellence and requested help from Toyota.

I remember walking around with two Toyota managers who explained they were in material management within Toyota and got a strange request to show up to work on Monday at the hospital. They had no idea what they were supposed to do but naturally went to the gemba to grasp the situation. They found the hospital was really bad at material flow and there were materials flowing everywhere. They transformed it to look like a Toyota supply chain with pull and standard material handling routes and carefully organized warehouses based on visual management.

A former Toyota human resource manager was leading the overall transformation. They worked hard on developing aligned key performance indicators and engaging employees in kaizen.  They were heavily focused on the customer experience.

I had no basis for comparison in Japan but have visited a number of American healthcare organizations attempting to transform to lean and I often see a lot of lean tools with no real depth of kaizen. On the other hand there are many hospitals in Europe and the United States that have worked hard at lean with great results and I suspect that is less common in Japan.

What is something new that you learned or discovered about lean or the Toyota Way through the process of writing this book?

Jeff: One thing that was not well developed in The Toyota Way was the intense customer focus of Toyota. That became more prominent in a book about services and I think Karyn and I went much farther in defining excellence from the customer’s perspective.

What is something that you learned about your own practice of lean?

Jeff: As we considered the high performance organization movement, and the insights from Toyota Kata, and the importance of customer focus it helped clarify the importance of a clear direction—the first step in the improvement kata.

We often missed that in practice diving into transforming parts of the organization to eliminate waste without working with leaders to clarify their vision and set the challenge.

There is a reason why in the Toyota Way 2001 house “challenge” is the first foundational value and that has become much more prominent in my practice.

What questions are you pondering now about the evolution of the Toyota Way?

 Jeff: One lingering question is simply what is new?

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Toyota is one great model for a high performance organization and there are so many insights one can gain by studying them and learning from the many thoughtful leaders.

As you piece together the Toyota Way you come back to fundamentals of running an effective organization.

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  • Understand your customer deeply.
  • Develop high levels of skill in all employees.
  • Learn to solve problems at the root cause.
  • Clarify your vision and strategy before jumping into specific actions.
  • Spend time deeply understanding what is really happening.
  • Experiment and learn.
  • Respect your employees enough to invest in them and allow their creativity to blossom.

Are these really new insights that warrant being called a new paradigm with a name like lean? On the other hand Toyota has put it together as a total system like few have.

In the closing pages of the Toyota Way to Service Excellence, you encourage readers to “have a personal true north and consider every day a learning opportunity.” What is your personal true north?

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 Jeff: I cannot honestly say that I am personally very good at setting a clear vision for myself and working toward my true north.

I kind of stumbled into the Toyota Way. I was always very driven to achieve practical goals like publishing and getting tenured and so on. Fortunately, I pursued an academic career and that gave me a lot of freedom to explore many interests. Along the way I adopted certain academic values like honest intellectual inquiry.

The practical scientific thinking that Toyota talks about was very intuitive to me.

I always had great respect for high performing organizations that had a passion for their customers and members. Yet as a scientist observing organizations that were reputed to be exceptional I was usually disappointed—the hype did not match the reality.

Toyota excited me because they walked the talk, not perfectly, but relatively speaking very consistently. It was real.

I think studying Toyota went a long way in giving me a personal True North—preaching about something I developed a passion for.

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What do you think?

What do you think about Jeff’s comments and the application of the Toyota Way in service industries? Please leave your comments in the section below.

Want to learn more details: Click here if you would like a PDF of the transcript of our phone interview conversation. In it, Jeff expands on examples and case studies that highlight many of the concepts we discussed, but was too lengthy to include in the highlights below.

[Disclaimer: I received four copies of the book by Jeff and his publisher. There was no request for anything in exchange for the books. The Giveaway, this post and any other reviews or comments are completely of my own volition].

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Katie Anderson
About Katie Anderson 121 Articles
Lean thinker and coach. Passionate about developing people. Healthcare change agent. Living in California again after 18 months in Tokyo. Writing about lean and leadership.