XPDAY2006: The Toyota Way of Managing

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I’m using lean thinking and lean concepts more these days when
talking with managers and executives. And it’s proving to be more
effective than talking about agile this and that. Based on my own
experiences and recent conversations with

Gus Power


Steve Freeman

, lean concepts
are definitely under-utilised in software development, even if
you’re using the common agile techniques.

It’s great working with Gus because, having come from Dell, he has
extensive practical knowledge and experience about lean, so I’m
learning all the time. At


I went to

Pascal van

‘s session,

Toyota Way of Managing

, to get a refresher. Here’s a
combination of the hand-out information and the notes I made:


Everyone and everything works towards a common strategic vision. Is
every person adding value? If not, they’re waste. Every person
decides their own fate. Every person should accept responsibility
for their conduct. And every person should continuously improve
their skills to keep adding value.


  1. The right process will produce the right results.
  2. Create a continuous flow of work that delivers features to the
    market regularly. Release working software to production at least
    once a month.

  3. Establish a pull system where each step passes its result to
    the next step as fast as the next step can accept and process it.
    This helps to avoid overproduction and waste. Use index cards (


    ) to
    facilitate pull. For example, the product owner pulls features from
    the team a release at a time, while the team pulls user stories
    from the product owner.


    said that every 55 seconds a Toyota rolls off the production line
    because every 55 seconds a Toyota is sold.

  4. Eliminate waste (


  5. Minimise inventory and work in process because it’s waste. Keep
    a little stock and restock frequently. Inventory is features that
    aren’t released yet, so release often. Work in weekly iterations to
    build up a release and then release every month.
  6. Be responsive to customer demands rather than schedules. Listen
    to user feedback after every release and let the product owner
    adapt the product backlog and steer development in response.
  7. Level out the load (


    avoid overburdening people (muri) and avoid uneveness (mura) to
    prevent breaking flow by repeated stopping and starting. Toyota
    finalises its production schedule one day before the run begins.
    Everyone should work together at a sustainable pace to maintain
    flow. Each person should use


    to maintain a balance between work and play and stay
    healthy and productive.
  8. Create a culture of stopping to fix problems and slowing down
    to get the quality right the first time. Every person is equally
    responsible for quality. If you notice a problem you have the
    responsibility to stop the production line. Don’t continue to
    produce bad products. Use intelligent tools that automatically
    detect problems, stop themselves (


    and alert people. Use


    something similar) to perform


    , with an

    feedback device

    that lets people know when there’s a problem
    with the build. If the build breaks, someone must take ownership
    and fix it immediately. No-one else can check code in until the
    build is restored.

  9. Repeatable techniques help achieve predictability and form the
    basis for pull and flow. They also give people time to focus on
    improving how they work. This leads to empowerment. Every person is
    responsible for improving how they work individually and
    collectively, every day.
  10. Capture accumulated learning about how you work. Use


    as a way of thinking about how you learn a technique.
  11. Keep everything visible and understandable. Use simple visual
    indicators (


    to help people understand what’s going on, and to support pull and
    flow. Use information radiators such as physical





    visible charts

    , and keep them visible at all times by locating
    them in public areas.
  12. Use only reliable, well-tested technology that supports people
    rather than replaces them. But also encourage people to try-out new
    technologies that might improve how they’re able to work together
    to achieve flow. Toyota says a machine is in its worst state when
    it arrives new in the factory. Over time they make it more
    reliable. Just like a new team.

People and Partners

  1. Add value to the organisation by developing your people and
  2. Grow leaders (


    ) from within
    who thoroughly understand the work, live the philosophy and teach
    it to others. At Toyota, a leader is always teaching two other
    people to succeed them. Apparently Toyota has expanded faster than
    its ability to grow new leaders.

  3. Develop exceptional people who live the philosophy. Provide
    them with continuous on-the-job training. Create and then


    cross-functional teams

    . Work towards shared goals and
    continually reinforce the culture and philosophy.
  4. Respect your partners and suppliers. Show that you value them
    by challenging and helping them to improve. To maintain flow,
    Toyota’s partners are required to perform at the same rates as

Problem-solving and Organizational

  1. If you want to know what’s really happening, go to the source
    and see it for yourself (


    ). Only then can you really understand the situation
    and add value.

  2. Consider many options. Make

    by consensus

    and then take action immediately. Ensure everyone
    who might be affected is involved (


    gently dig around the roots of a plant,
    in order to transplant it carefully

    ). A decision reached by
    consensus is binding because it embodies an idea that’s shared and
    supported by each team member.

  3. It’s never good

    Be a learning organisation through reflection
    (hansei) and continuous improvement (


    ). Hold a


    at the end of every iteration to reflect, learn, adapt and then

Apparently, it takes Toyota 5 to 10 years to get a new factory
up-to-speed in the Toyota Way. Changing to a culture like Toyota’s
is not quick and it’s not easy, but the rewards are worth the

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