Beyond Lean

Peter Béndek
Beyond
Lean
A Revised Framework of Leadership and
Continuous Improvement
Beyond Lean
ThiS is a FM Blank Page
Peter Béndek
Beyond Lean
A Revised Framework of Leadership
and Continuous Improvement
Peter Béndek
MANTEC International
Gothenburg, Sweden
ISBN 978-3-319-27743-1 ISBN 978-3-319-27745-5 (eBook)

DOI 10.1007/978-3-319-27745-5
Library of Congress Control Number: 2015960846
Springer Cham Heidelberg New York Dordrecht London

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Preface
I wanted to write an exciting book and having read it back on completion I believe
I managed to achieve this objective at least. I can only hope my reader will have the
same feeling once reaching the end. I have stuffed into it a critical investigation into
our current theories and into the management practice of some of the world’s most
important businesses, so in this sense the reader holds, for better or worse, a
management thriller in their hands. It has a vein, too, in the still little developed
discipline of the philosophy of management, centring around the most salient man-
agement philosophy of our time, the Toyota Way. And of course, the book is also an
introduction to a leadership practice of continuous improvement and cultural trans-
formation aspiring to point beyond Lean and help a few businesses redesign their CI
practice for the better. I did not want this to be a lengthy book either but rather a
representation of a way of thinking which might give food for further thought while
also conclusive and helpful in key points. I fleshed the new framework out with just
enough details to be comprehensible and inspiring at the same time. Again, I can only
hope I did well. I wish my reader for an enjoyable time with this book.
Technically speaking, this book was designed to be usable by the academia and by
practitioners at the same time. Its critical chapters taking up the most of the book
written with the academic community in mind, but within each chapter, an executive
summary and several inserts (shaded in grey) help quick and easy digestion by more
practice-oriented readers. They are meant to establish that the available leadership
and continuous improvement frameworks do not properly support a practical trans-
formation process; therefore, they are hardly irrelevant to the business community, on
the contrary. They help clarify why the current practice of operational improvement
is broken (underperforming) and they lock in a number of key considerations I would
find very hard to spare in building my own improvement strategy. Yet, you have
those grey boxes to help you navigate through the chapters with less immediate
reference to practice, highlighting the meat of the argument.
The exposition of my own doctrine in the last couple of chapters is rather more
practical and a reader with a vein of either the academia or business may find
interest in it. Indeed, I hope they will.
London, UK Peter Béndek
v
Executive Summary
This book, as its title suggests, presents a revised framework of Lean and Lean
implementation with an eye on the transparency, sustainability, and speed of the
transformation process. The efficiency of a transformation into more competitive
company cultures is increasingly becoming a value with equal operational import to
baseline capabilities. This book offers an argument in conformity with the more
individualistic precepts of Western societies of how to generate this transformation
and turn it into a continuous improvement practice that fares better than the
available Lean strategies. To mould it all into one phrase, I look for the principles
of efficiency at continuous improvement, principles that do not claim either trans-
parency or sustainability or speed but all of these and serve competitiveness at a yet
unknown level.
Continuous improvement (CI) should not be considered a subcategory of change
management. Contrary to the latter, it has no end and no purposes outside self-
reflective improvement. Its purpose, in other words, is itself. CI companies are
characteristic for their production of improvement before anything else. Their
perspective is the production of improvement, i.e., of ever increasing value creation
rather than of any specific goods, services, or profit. This is not only a distinction of
theoretical but also of practical nature. Once one starts to conceive their company in
terms of a self-reflective improvement or value creation machine, their chances of
improving the quality, productivity, and performance of the operation also start to
dramatically increase. To build a production of improvement, you need to make this
change of perspective first of all. The book steps up to this perspective in various
concentric rounds to finally arrive at the exposition of a revised doctrine of
TPS/Lean and a roadmap of implementation.
Once this perspective has been taken, the role of people in CI will also gain a
new meaning. CI cannot focus on assets (technology, space, capital, brand, etc.) as
long at least as you cannot build generic self-reflective (cybernetic) intelligence into
them. I shall try to prove that the best of Lean practice in the West, more in my
focus of investigation than Japan, or Taiwan, or South Korea for that matter, still
falls captive to asset orientation and diversifies into a few types of underperforming
change management attitudes and broken CI practices. Along with a couple of
critical chapters from the automotive industry (Ford, VW) to prove my point, I
review the much renowned Toyota Production System. Demonstrating where it is
vii
viii Executive Summary
unstable as a system and inefficient as a practice, I invite the reader to surpass it and
look beyond Lean in certain key respects to better access optimum efficiency and
sustainability in the CI transformation. The crux of the matter will be if the presence
of ambitions for systemic autonomous kaizen can be validated in an operational
strategy. Then it can be coherently produced in a congenial practice.
In the exposition of my own theory, to be followed by a CI implementation
framework, I argue that the vital principles of CI transformations are laid out in the
composition of our psychological (natural) needs and in the individualistic concep-
tion of excellence, both characteristic of our Western cultures. When reinforced by
an appropriate learning system at company premises, the two generic principles can
evolve into the general principles of operational excellence (or CI). The appropriate
learning system, in turn, is anchored in an all-encompassing training and workplace
coaching (TWC) system directed at the inculcation of the peak leadership principle
of self-actualisation in problem seeking and solving via teams (SAPSST). As the
training system is consistently applied to the organisational practice, the double
helix (or DNA) of coordinated people and product development will gradually
engender the culture of CI. This application of the training system to practice is
carried out in a 7-stage process of (cultural and organisational) transformation
spanning from operational chaos to what is termed the reflective kaizen stage.
With more and more people integrated, accordingly, in the systemic practice of
problem seeking and solving (or learning), CI becomes the dominant habit of the
organisation. It may all seem to amount to a conveniently simple strategy, but to
prove its logic the book also leads the reader through first a critique of alternative
methods and then exposes the pillars of the strategy as well as an universally
applicable roadmap in adequate detail. Once the strategy is fully grasped, it
becomes very amenable to implementation which is why it might be found valuable
for practitioners. All in all, the build-up of the argument is mostly linear to help the
easy handling of its practical upshot, and once the reader has worked their way
through the theoretical foundations they can confidently embark on the
implementation part.
That is, the way to a CI culture leads from the psychological and ethical precepts
through leadership as SAPSST to TWC and its application to systemic practice
along the 7-stage learning process, the latter in turn selecting the right principles
and tools of the gemba practice. These principles and tools may not necessarily be
exactly those that TPS and Lean have developed, so in this sense, too, it is not a bad
idea to look beyond Lean.
The book concludes with a 12-entry roadmap of to-dos and a summary of key
points, while core statements as follows are picked up from time to time along the
text and re-explained: Leaders are not there strictly speaking to lead others—they
are for engendering a leadership culture, a largely different attitude. Standards
make no sense in kaizen unless they are mere signposts to be passed, and the
Lean PDCA cycle is likewise (structurally) inadequate to support continuous
improvement—it needs to be supplemented by a sub-cycle called IARS. Teams
are not the ends of a cooperative organisation; they are the means to reflective
individuality. Training, if effective, is not for doing. Doing is for training. It is
Executive Summary ix
rational not to choose Lean/XPS. The Lean industry has lost its way in the West and
is unable to serve efficiency and continuous improvement. It is possible to reach
beyond the Toyota Way.
As this book is a product of parallel research and practical experience, it is
imagined to be both coherent and useful, and as such it is meant equally for the
academic and for the business communities with indications made to the latter
where the practical weight of certain arguments lies. All in all, the ultimate benefit
of the approach is twofold. Very crudely, it may help leaders and practitioners, first,
to cast a critical eye on their own CI programmes, understand, find, and tame bugs
before they should kick in with full force, or repair them if already present, and
second, to choose the author’s own approach in its full stretch from theory to the list
of practical to-dos.
Introduction: The Meaning of Operational
Excellence
Abstract: Businesses watch out for time because they understand that time is
money; yet, managements rarely understand how morality is tied up with the
utilisation of time in the constant pursuit of excellence. In a truly excellent business
characterised by the “morality in time” relation, time and opportunity, the disdain
of waste and of the lack of self-development, governance by morals, and the
continual striving for excellence are all deep-seated qualities of the same ethical
stance and are more fundamental to business ethics par excellence than any
configuration of written precepts and norms of behaviours. Purpose understood as
a moral code consisting in the joint improvement of individual and corporate
capabilities has, however, a practical significance above all. The question I arrive
at is why executives more often than not fail to develop and sustain great
companies, and I conclude that there is a general need in our business environment
for a transparent, reasonably speedy, and sustainable approach to operational
improvement.
In the eyes of only too many, continuous improvement boils down to mere
number crunching—to gain credits one or two levels higher in an organisation, to
win acceptance by investors, and in the worst case to cover up for inherent
weaknesses. The spirit of this book will hopefully tell you that there is another
side to this coin. The embedded capacity to endlessly improve and continuous
improvement as the realisation of this capacity are the peak of operational readi-
ness: they are not only the way to operational excellence, but they are operational
excellence in a pregnant sense. Excellence is never a fixed achievement; it is the
ability to excel at any point, that is, to endlessly displace any given quality for a
better. Due to the omnivorous, all-corroding nature of business talk, operational
excellence, however, has lost its dictionary—let alone its intuitive—meaning by
now. All nimble, poorly prepared firms like to chat about it and chat in endless
details as if speaking was creation in the world of facts. It is not.
To achieve operational excellence it takes much more than earning money for
one, two, or, for that matter, a dozen quarters in a row. It is not a measurable quality
in the first place. It is reflective rather of a character actualising itself in continuous
improvement, and to build a character, indeed to own a character, a company needs
more than just the consummation of talents, skills, and good fortune, the same way
as character points beyond the mere production of results. Operational excellence,
xi
xii Introduction: The Meaning of Operational Excellence
indeed, is moral fitness in a world where morals have long slipped out of hand; it is a
deep-seated commitment to values that have no markets, where short selling has
never been an option. When an executive pledges to build operational excellence,
they make a pledge to their successors. It is all beyond themselves whether
purposewise or timewise. Like personal excellence operational excellence is a
moral quality, longevity amid changes, and endurance in time.
So, when we start talking about continuous improvement further below let us
remember that it is first of all a moral choice, or more accurately a moral code,
invariably constitutive of (operationally) excellent businesses. Morality means to
be reflective of an excellent character, one that is capable of justifiable purposeful
practice at any time, and actualising itself in continuous improvement. An excellent
business has a morality or character in this sense. At the same time, I do not think
that it is any easier to develop a less good company than a really good one—once
the concept of this moral code is granted and available to a CEO.
Excellence, strangely perhaps, is located on an axis whose two ends are the
moral code, in the focus of a prior determination, and time as the ultimate resource
of all activities limited by a finite life or, in the case of an executive’s opportunity, a
finite mandate. The morality of character and the finiteness of time in unison,
i.e. morality in time, is indeed the ultimate organising principle to define the
framework that excellence, whether individual or corporate, inhabits and in
which it can spring forward. Excellence in general and corporate excellence in
particular make the most of time by way of a timeless character. Operations exist in
time but not for time. Waste, in turn, suggests an uneconomical treatment of time
and is telltale of a character that does not wish to utilise the time at its disposal to
self-actualise. The latter’s pursuit of excellence remains a potentiality at best; yet, I
would rather say it is completely missed because, if truly there, excellence would
show itself, cut through, and instrumentalise time rather than fall prey to it. Waste
of time, eventually, is a character flaw. Excellence, personal or corporate, is a moral
quality. Time, in turn, is the measurement unit of productive excellence in the real
world.
The great inventor, polymath, author, statesman, one of the Founding Fathers of
the United States of America, Benjamin Franklin aptly observed and his observa-
tion was a moral one (Franklin 1748): “Remember that TIME is Money. He that can
earn Ten Shillings a Day by his Labour, and goes abroad, or sits idle one half of that
Day, tho’ he spends but Sixpence during his Diversion or Idleness, ought not to
reckon That the only Expense; he has really spent or rather thrown away Five
Shillings besides. (. . .) The most trifling Actions that affect a Man’s Credit, are to
be regarded. The Sound of your Hammer at Five in the Morning or Nine at Night,
heard by a Creditor, makes him easy Six Months longer. But if he sees you at a
Billiard Table, or hears your Voice in a Tavern, when you should be at Work, he
sends for his Money the next Day. (. . .) In short, the Way to Wealth, if you desire it,
is as plain as the Way to Market. It depends chiefly on two Words, INDUSTRY and
Introduction: The Meaning of Operational Excellence xiii
FRUGALITY; i.e. Waste neither Time nor Money, but make the best Use of both.”
Make the best use of both, one should say, by constant increased value creation.
This quotation finds its place in the context of the eighteenth-century ethics some
of whose key terms stated in the American Declaration of Independence were the
rights to “Life, Liberty and the Pursuit of Happiness”. The latter, however, held an
unequivocally utilitarian meaning at the time, that is, “that Action is best which
accomplishes the greatest Happiness for the greatest Numbers; and that worst,
which in like manner occasions Misery” as the Scottish philosopher Hutcheson
says in his An Inquiry into the Original of our Ideas of Beauty and Virtue (1725).
Utilitarianism connected individuals to the well-being of their community, and,
similarly, instead of its hedonistic component happiness meant in the words of
U.S. Supreme Court Justice Anthony Kennedy “that feeling of self-worth and
dignity you acquire by contributing to your community and to its civic life”
(Bridgeland 2013, p. 36; cf. Charles 2011; Buchanan 1994; cf. Fateh-Moghadam
and Gutmann 2013). Liberty and happiness conjoined was a moral exhortation
some time ago to freely enrol one’s individual excellence (but not the self-denial of
it!) in the ultimate service of the community by value creation. As individual
excellence without ever present value creation to the outside is a contradiction in
itself, we can easily detect in values a function of personal excellence whose
combined result is social utility very broadly understood. Personal excellence and
the understanding by a particular community of what is and what is not a value are
thus closely associated. You cannot call a character excellent if the communities
and their context would not warrant the values this character displays. So, while
individual and operational excellence actualises in constant value creation (contin-
uously improving and making the most of time at any point), whether the values this
improvement generates are truly and justifiably values is determined in the deliber-
ation of the stakeholding communities. And even then conflicting opinions might
still remain (Kaptein 1998).
While community and collective interests, needless to say, would never justify
anyone’s resignation from the free pursuit of personal excellence, the notion of the
service of the collective good by way of value creation is still a fundamental
assumption of ethical behaviour in this context. The all-encompassing stable
practice of ever increasing personal (individual and/or corporate, warranted)
value creation is the chief good of a particular community and anyone contributing
to this practice raises happiness in the utilitarian sense. The stricture that excellence
vested in the continuous improvement of one’s value adding capacity is in the
ultimate interest of the community is the single foundational, though long forgotten,
principle of ethical behaviour in the business world, too. It is individualism at its
best: a concordance of self-actualisation and community endorsement. Rather than
a moralising bumper sticker, it is a practical principle saying that “morality in time”
(i.e. individual excellence, continuous improvement, or self-actualisation in ever
increasing value creation) has practical results (i.e. in time) that exceed those of the
alternative (morally corrupt, wasteful, or unwarranted) practices. To “make the best
xiv Introduction: The Meaning of Operational Excellence
use of time and money” is an exhortation to utilise time and money for (the
actualisation of) one’s own excellence (e.g. industriousness and frugality in the
Protestant tradition) in such a way that the practice entails the balanced benefit of
all, and as such it is justifiable.1 I cannot go into an analysis of either balance or of
the nature of ethical conflicts that an unstable or unreasoned balance can create, nor
can I reflect on the enduring features of individual excellence in the Western
civilisation. There certainly are such things. All in all, it is an adequate outcome
at this stage of the argument that continuous (self-) improvement is only valuable if
the values it cultivates and breeds are warranted. And as we shall see, no values, in
consequence, have bigger chances for acceptance (by near consensus) and a better
approximation of excellence than those established in culture.
While, in brief, we often—and rightly—speak of lost time along with lost
opportunities as the two most important indicators of a wasteful practice and of
the lack of (operational) excellence, we rarely recognise the morality of the
utilisation of time as clearly as some of our great forerunners like Franklin or
Adam Smith ([1759] 1853) and cf. Bevan and Werhane (2015) did. Rarely do we
recognise, in other words, that lost time and opportunity are indicators or symptoms
of a wasteful practice; nevertheless, the corruption of practice itself lies deeper than
mere measurable loss of value, as deep at least as any corrupt constitution of
practice or a character failure can be.
We shall see, in turn, towards the end of this book that just as much our
concept of time has become an entity in and of itself freed from a
constitutive practice of protestant and utilitarian morality, so has busi-
ness ethics become entirely departmentalised, instrumental, and positiv-
istic: phrased in terms of written commands and norms, or worse, of
codes and catalogues of behaviours. Time and ethical practice have at
best been balanced out only to find themselves in trade-off situations as a
routine. In a truly excellent business characterised by the “morality in
time” relation, on the contrary, time and opportunity, the disdain of
waste and of the lack of self-development, governance by morals, and
the continual strive for excellence are all deep-seated qualities of the
same ethical quality and are more fundamental to business ethics,
organisational ethics included, than any ad hoc configuration of written
precepts and norms of behaviours (Parker 1998). The right,
i.e. justifiable, utilisation of time is part of the moral code, and the joint
continuous improvement of individual and corporate persons is the sine
qua non of excellence (Garay 2015).
1
Organisations differ from mere social practices in that (1) to varying degrees, they strictly
coordinate the value adding practices of participant individuals, and (2) they always do it in
conformity with some purpose or design.
Introduction: The Meaning of Operational Excellence xv
Businesses watch out for time because they understand that time is money; yet,
managements rarely understand how morality is tied up with time in the constant
pursuit of excellence, and how time needs to become subject to a more fundamental
constitutive purpose if excellence wants to prevail. Time—hours, minutes, and
seconds—might have become the accepted metrics of value creation but once
businesses lose sight, as most of them do, of purposes deeper (or higher, make
your choice) than mere minute crunching, i.e. the purpose of the continuous
improvement of both individuals and company, the unifying zeal of waste reduction
empties and excellence quickly turns void. Let me remind ourselves that operations
exist in time but not for time. Once they forget about the constitutive notion of
excellence, there is a danger they fall from the brink of time into the very chasm of
it, much like some of the “heroes” of this book, Toyota and, more recently, VW,
have done,2 creating loss for their present and future employees, customers,
suppliers, and indeed all of their stakeholders in the span of many years.
As long as we accept the personality of a corporate body, or if anyone would
wish rather not to go that far, we accept the fact that cultures are created out of the
interactions of the many, the crude shambolism of “facts” must quickly reveal
itself. Positivistic management is unwilling to accept a governing perspective
beyond facts, numbers, tangibles results, standards, visible interactions, etc., only
to see very quickly that they do not get even close to operational excellence,
i.e. without an unifying immaterial purpose that any association of humans requires
to apprehend and identify with reality. (For a more positivistic but congenial
concept of excellence, see Kale 2015.)
I would like to emphasise here the practical, rather than moral, import of all this.
This book is not meant to be a book in moral philosophy even if it is at least partially
a book in management philosophies. Its interest is rather more practical than
anything else. Similarly, purpose understood as a moral code consisting in the
joint improvement of individual and corporate capabilities in the interest of ever
increasing value creation has a practical significance above all. In this brief section
thus far the reader has had the opportunity to follow a Western type, if sporadic,
reconstruction of nothing else than one of the two sheets of the Toyota DNA that,
anyway, we shall have ample room to further analyse below from a more “busi-
nesslike” angle. As this book promises to lead the reader beyond Lean and intro-
duce a revised framework of continuous improvement, we shall have to dissect and
analyse the current management constructs that some of the world’s leading
companies live by and find out where they prove deficient and fail, Toyota included.
For this, the above reconstruction of the joint purpose of individual and corporate
improvement as a moral code is something that we cannot lose sight of at any stage
of the argument. It is not a bad idea therefore to revisit it from a different angle and
reinforce my message and then advance towards some more practical insights.
2
http://www.theguardian.com/business/2015/sep/22/volkswagen-scandal-us-chief-carmaker-totally-
screwed-up-michael-horn
xvi Introduction: The Meaning of Operational Excellence
So, how does all this look in management from a slightly more practical angle? I
believe that quite as the productive use of executive resources, time above all, their
less productive use than would be appropriate for building an excellent company
demands a certain commitment to a habit, in this case to the habit of the unproduc-
tive use of time. This habit is the reflection of a character that is less prone to
excellence than it could be. A chief executive, for instance, has a certain role to play
within a broader context, institution, or situation. If the description of those,
including their purpose as well as the given role’s nature within a particular context,
is sufficiently clear, the general demands on the role should also be pretty straight-
forward and obvious, and there are no excuses for doing a lousy job. With a clear
vision and purpose, the task becomes suddenly technical enough to be learnt and
delivered. Note, I do not say it is easy, I say it can be learnt.
The immediate demands on the chief executive’s role, for instance, mostly
concern the increase of shareholder value, the company’s market value and market
share, its profitability, and the like. Company charts, strategies, remuneration plans,
or annual business plans may define such demands more closely. As we are entitled
to expect that in any reasonably well-governed company, the chief executive’s role
be so defined that any significant deviation from it showing up in the deterioration
of shareholder value, profitability, etc., as above will almost immediately invoke a
legitimate reaction by the stakeholders, we can also firmly establish what activities
carried out in the role are to be considered value adding and what not, and, indeed,
how value is defined for that company in the first place. Such statements as “the
chief executive’s primary role is to increase earnings per share (EPS) and all things
considered they need to refrain from spending their time on anything else than what
verifiably leads to an increase in EPS” are rare but perfectly justifiable definitions of
not only the mandate of a chief executive but also of what is considered to be the
purpose of a particular organisation, or what the ultimate value is expected to
consist in there.
Indeed not only a company executive but all of us do regularly commit ourselves
to value creation or non-creation in any particular, at least remotely purposeful,
situation, which when reiterated may develop into what we can call some practice
or habit of value creation and, indeed, a character. It is very rare that upon due
consideration and reflection, one could not tell if they use their time fully or
reasonably productively, or not productively for that matter, in a well-defined
situation. Whatever then the description of a role is in a life or work context, the
understanding of the role’s purpose and value should always be thorough enough if
reflection, judgement, deliberation, and action are expected to take place at all in or
starting out from that role.
In other words, whether we use the time at our disposal for value creation and,
indeed, some of us, for building a character and a practice of excellence is entirely
up to us as long as a situation, our role in it, and its expectation on us, or, in other
words, the value definers, are sufficiently clear. Not to do something properly, that
is, to fall short of deliberating and acting purposefully within this objective body of
criteria, is equally difficult than doing the same thing properly. It is only about how
Introduction: The Meaning of Operational Excellence xvii
we use our time. The time is given and it is no more a Herculean task to use it
productively than, upon due consideration, non-productively.
With this I would also like to emphasise the nature of responsibility associable
with an executive role and cursorily dismiss a common picture of the executives as
superheroes. The executive office is a functional department amenable to proper
description, transparency, and judgement. It is precisely for the chief executive as
well as for lesser ranking managers to create transparency and actionability around
their role so that they can make an attempt to fill their mandate at all. It is only once
transparency and actionability are created with regard to this context, that is, with
regard to the expectations that come from the institutional environment in terms of
the desires of the stakeholders, external variables, an executive’s personality,
values, and behavioural traits, etc., that anyone can say that “from now on I know
my job, I know what is expected from me, and know how I can create value to the
stakeholders—that is, how to act as an executive”. Until then, there is no point in
taking up the role but further than that every decision that a chief executive or a
manager makes will rightly be judged on its merit of creating or squeezing value.
There is no way in between. Surely the quality of values will be different, but
having adequately swept the terrain for transparent and actionable decisions, the
chief executive or the manager will be expected under the burden of justification to
the stakeholders to initiate an onslaught of full-blown value creation.
Yet, they rarely do so. This book is dedicated to executive paradox of non-value
creation, or, in other words, to the problem of why executives fail to develop and
sustain great, or excellent companies. Even more interesting for me throughout the
book is the possible best practice of solving that paradox and create sustainably
great companies. I do not think that there is such a best practice on hand at the
moment. Toyota Way or the Toyota Production System (used alternatively in the
best part of this text) and its Westernised formulae collectively subsumed under
Lean Management (used in distinction to the previous) were meant to furnish such
practice, but in the more than 15 years I have spent in the field as operational
consultant and researcher, I have failed to recognise a more or less unified pervasive
change management practice that could be saluted as the best. There is a reason for
that other than my necessarily limited experience, which I shall expand on later.
Although the institutions of academia have found their way to industries, there
are a plethora of signs of good cooperation, literature abounds, and management
faculties generally swarm with ideas, neither Lean nor any alternative approaches
have crystallised into a single engaging industrial practice of organisational devel-
opment (Jones 2013; Mullins 2013; Knights and Wilmott 2007). There are certainly
a great many companies journeying, as is fashionable to say, in Lean. But there are
almost as many directions and means on this journey as there are companies. Some
try directly to copy Toyota which is still the standard, but then it turns out that for all
the books devoured and gurus hired for big money, their local cultures cannot
absorb many decades of experimental stratification of a specific company culture,
i.e. that of Toyota, and their endeavour gradually fades into oblivion or gets stuck
(Fujimoto 1999; Anderson 2010). Others proudly maturate a roadmap of their own
which will take them until some point which may or may not reflect the original
xviii Introduction: The Meaning of Operational Excellence
purposes. So, at the end of the day, we stay empty-handed what regards common
wisdom and best practice.
I do not call into question the honesty and hard work imbued with efforts past
and present, but still I aspire to provide a common denominator of continuous
improvement in the direction, somewhat obviously, of what ultimately makes a
company, operationally speaking, excellent. Why? Because, I believe, this is what
the bulk of the companies need. The aspiration of this book is borne by and is a
response to the general need in our business environment for a transparent,
reasonably speedy, and sustainable approach. I am also aware, however, that
these three adjectives put together may smack of a cheap outcome, but I will do
my best to prove otherwise. What would be ideal for us, to condense the many
decades of Toyota experience into just a few months’ project, is obviously a vain
aspiration, totally out of serious consideration under any reasonable circumstances.
Indeed, while the condensed reproduction of experience might be a vain exercise,
the rationalisation of experience is far from vanity. Incidentally, it is called (empir-
ically tested) science.
I purport to equally provide a scientific explanation for the failure of Western

implementations of TPS and provide convincing reasons why home-baked
improvement initiatives get stuck.
Contrary to the accepted spirit of management literature, I will be critical of

some of our current academic knowledge and field skills. In this aspiration, I will go
beyond Lean in certain respects partly to strengthen and reinforce Lean and partly
to abstract from it and show that it would perhaps be timely to start thinking in
terms of a different structure of improvement practice.
This book is meant primarily for practitioners as well as for students of manage-
ment and organisational development, and it is expected to demonstrate that great
companies are nascent in every small and big firm. While greatness is realistically
attainable, the reality of greatness is in the hands of the executives. The core
learning to take home from the book is a hands-on framework that can help
practitioners to create such companies through constant value creation and opera-
tional improvement. I will try to convince my readers whether chief executives, line
managers, university professors, or undergraduates in management and OD that we
are by no means in need of significantly more hard work and dedication to create
value than to create waste in managerial or in broadly purposeful roles. I will show
them that it is more amusing and incomparably more rewarding to use our time well
than not. I hope that by understanding my criticism of the current practice and
embracing the framework that I am going to put forward, my readers’ understand-
ing of management will become sharper and their own applied practice more
fruitful. And by more fruitful I mean transparent, speedy, and sustainable.
Acknowledgements
I am indebted especially to three people who helped me on my way to this book. To

the late Dr. James B. Irwin, Sr. (1936–2009), an incessant source of awe and
inspiration for me as Chairman of Integrated Control Systems, Inc., and as a
salesman in particular. To Nándi Kaszás, one of the finest chief analysts and
operational consultants this profession has known to date. And to Bent Hansen of
Mantec International, a good friend and colleague. I thank them all for standing by
me. I am grateful to the management of Mantec International for allowing me
access to the company’s rich database of case studies that helped me develop my
perspective. This book is dedicated to my loving wife, Rita.
xix
Contents
Part I
1 What Is Wrong with the Current Continuous Improvement (CI)
Practice? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 The Dominant Practice of Change Management . . . . . . . . . . . . . . 3
1.2 The Impact of OCM on Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2 What Is Continuous Improvement, and What Is Not . . . . . . . . . . . . 11
2.1 Continuous Improvement at Toyota . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 The Toyota DNA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3 Strategies of TPS/Lean Implementation . . . . . . . . . . . . . . . . . . . . . . 21
3.1 Lean as a Platform of Kaizen Events . . . . . . . . . . . . . . . . . . . . . . 21
3.2 Facets of Behaviour Improvement via Management Systems . . . . 37
3.3 The TPS Spin-Offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4 The Toyota Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.1 The Japanese Education System in the Service of Kaizen . . . . . . . 57
4.2 Two Different Conceptions of Waste . . . . . . . . . . . . . . . . . . . . . . 60
4.3 Toyota in Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Part II
5 Building a New Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.1 Reconstruction and Reproduction . . . . . . . . . . . . . . . . . . . . . . . . 77
5.2 Productive Individualism . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
6 A New Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.1 Individuals are the Key . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.1.1 A Summary Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.1.2 Why Is the Western Tool-Focus Reductionist? . . . . . . . . 86
6.1.3 Natural Needs in the Root of the Revised Framework . . . 87
6.2 The Production of Improvement . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.2.1 How Does Culture Work in the Interest of Operational
Excellence? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.2.2 Behaviour Management is Suppressive . . . . . . . . . . . . . . 90
6.2.3 A Revised Behaviour Management Framework . . . . . . . . 91
xxi
xxii Contents
6.2.4 The Production of Improvement as Opposed to Output . . . 92

6.2.5 The Leadership and CI Principles . . . . . . . . . . . . . . . . . . 93
6.2.6 The Transformation Framework from Afar . . . . . . . . . . . 94
6.2.7 Two Generic Principles of Transformation . . . . . . . . . . . 95
6.2.8 The 7-Stage Transformation Formula . . . . . . . . . . . . . . . 97
6.2.9 Two Qualitative Transition Phases . . . . . . . . . . . . . . . . . 98
6.2.10 A Learning System . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
6.2.11 The Training and Workplace Coaching System . . . . . . . . 101
6.2.12 A Complement to PDCA: The IARS Cycle . . . . . . . . . . . 103
6.2.13 The Rise to Stage 7 is Preferable . . . . . . . . . . . . . . . . . . 104
6.3 How to Go About It . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
7 Conclusion and Practical Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
Part I
What Is Wrong with the Current Continuous
Improvement (CI) Practice? 1
1.1 The Dominant Practice of Change Management
I consider every such activity to fall under operational change management (OCM)
that is meant to effect a purposeful change over a status quo within a given time
frame. Change management is about managed, not random or unintended, change.
Under the aegis of change management we want to get from A to B whether in
small, iterated steps or with a single discreet motion. OCM normally posits a goal,
target, or objective to reach what might be quantifiable but not necessarily is, but
something definable still. Even “firefighting” has a goal even though it does not
seem to be a conscious process at the first sight. (In fact it is. It is only the events
necessitating “firefighting” that might and usually do lack a goal but then those
events do not amount to change management either. “Firefighting” and stabilization
on the contrary do have a very clear goal, i.e., to quench the fire, to put an end to a
crisis.)
Despite their common interest in change continuous improvement (CI)

and OCM are two different worlds. I mention first of all their conspicu-
ously different timelines. CI is continuous, i.e., endless. The point of
OCM, on the contrary, is precisely that is has an end. In this sense,
which is the next difference between the two, the purpose of CI is the
sustainment of its continuity, or, in other words, its purpose is inherent
in itself. It is improvement as such. The purpose of OCM, however, is
always external to the process of change. It is defined, agreed upon, and
purposefully treated. Either attained or not. Once its purpose is achieved
and its goal is reached the OCM process comes to an end. It may come to
an end even if its objective is not achieved. That it may come to an end is
totally counterintuitive, indeed incongruous, in the case of CI.
(continued)
# Springer International Publishing Switzerland 2016 3

P. Béndek, Beyond Lean, DOI 10.1007/978-3-319-27745-5_1
4 1 What Is Wrong with the Current Continuous Improvement (CI) Practice?
Now, already at this early stage of my argument, a clear reason

immediately stands out why potentially sound CI programs may fail to
deliver on their ambitions. It is because they are considered, not only by a
particular company but more or less by the whole business community, a
certain type of OCM program.
When the Toyota Way or Toyota Production System (TPS) started its global
career as Lean back in the late 1980s it found an entirely different context, different
from what it had been nurtured in. The context, one can say the culture, was highly
result rather than process oriented, rather more tools than people oriented [cf. the
Lean Enterprise Institute’s case studies still swarming with tool-prone approaches,
Marchwinski (2014), cf. a typical “tooling” approach to Lean in Szwejczewski and
Jones (2013)]. Doing and achieving in this culture required prompt demonstration
of results, preferably in numbers, manifest signs of innovation, newer technology,
bigger output, more wealth, stocks, physical proof of on-going activities, at least the
murmuring of machines, it required, in short, tangible evidence. Sights, sometimes
even appearances rather than the lack of it, activity at any rate, regardless of waste.
In fact, as it turned out again during the application of TPS, the thrust of Western
business culture for more profit and better technology had for some time rendered
the human factor to a tertiary role and made it en messe auxiliary or instrumental to
capital and fixed assets (property, plant, and equipment, PPE—cf. Gobetto 2014).
In industrial quantity especially, humans were coveted more for their hands which
were lent to run the assets than for their brains.
While to work with the machines is understandably always inferior (less

valuable) to creating the machines, let alone to financing the creation,
what is of significance here is that not only did mass conversion which
was the first terrain of Lean implementations employ workforce that was
considered inferior (capable of less value adding per capita than other
human activities) but it also became regulated by ideas that were tech-
nology oriented. And the two do not necessarily follow from one another.
As I go on further in my argument I will occasionally call this the
regulation fallacy of mass industries that has left its mark on our opera-
tional management mindsets up until our very days. In short, we organise
our value creation around assets. Human resources are meant not only to
be in service of those assets often at a relatively low scale of the value
adding ladder but also to become subject to a culture of regulation
focusing on assets, i.e., capital, technology and, indirectly, the intangibles.
In such environments company development programs of operational nature will

also focus on technology and on how to run technology more productively. On the
surface there is nothing wrong with that. Indeed, what else would be the point of the
1.1 The Dominant Practice of Change Management 5
market economy if not conversion, productivity, and profit? And what could we
possibly do without capital and investments?
At its roots, however, if the regulation fallacy above starts to dominate

not only the control but also the development of mass environments as is
only logical, improvement too will fall captive to the instrumental
mindset.
If we want to develop and improve value creation then almost self-evidently we

shall do it paradigmatically, with the same attitude as to what counts as value and
what does not. If we have always considered the assets (“the objective reality”) not
only more expensive but also more valuable this paradigm will hardly shift with a
routine improvement program.
Then both the objects and, consequently, the objective of change will
remain to be the assets together with whatever we believe is amenable to
the cumulation and to the more efficient utilisation of assets, efficient
from the point of view of the governing interest of capital and equity.
The culture of asset development is demonstrated most straightforwardly in the

ever renewing desire, perceivable almost everywhere in the West, for new and more
sophisticated machines and technology (Womack and Jones 2010, 2 %). My reader
will take note that I am not criticizing this attitude directly, my point does not lie
here. Instead I am identifying this attitude as something closely associated both
with the superiority of assets over people on the value scale of mass conversion
environments as well as with the general perception of how development programs
should be structured and conducted, that is, with a primary impact on assets and
asset utilisation.
As I have already demonstrated the two, value perception on the one hand
and the primary objects of regulation and development on the other, are
not logically, only behaviourally, linked. But this behaviour leads us
directly to the instrumentalisation of human development placed entirely
in the service of asset development and utilisation.
It is little wonder then that in such highly objectified environments development

programs crave for certitude. If technology and the metrics in control of them are on
the top of the value hierarchy any development will necessarily be expected to be
reflective of that. Operational change programs and their fixation on goals and finite
development plans only come handy here.
OCM and objectified environments are pals in the same game, reinforcing
one another and altogether instrumentalising human environments. As
opposed to the true continuous improvement mindset operational change
management is, in short, an asset-driven platform of repeated short-cycle
company development programs, its metrics being just the same as the
standard technology utilisation metrics.
If anyone wants to evaluate an OCM program they are requested to turn to the
accepted key performance indicators deployed on machines and processes. Those
are clearly not enough, however, to evaluate a full-blown CI program. The fact that
most CI programs are nonetheless evaluated as though they were just bigger OCM
programs, with technology and process, maybe system metrics invoked, is an
indication of the instrumentalisation of CI itself. That change programs colonise
continuous improvement is of course a sad phenomenon and its causes lie deep in
our broader societal culture centering around short-term gratification, impatience,
the relatively low prestige of the morality of non-financial motivation, distrust of
hard work, and indeed distrust of workplace communities in favour of managerial
control. Then there are more specifically the dominance of big corporations, their
disassociation from operational excellence as opposed to M&A in strategic value
creation, and the weakening of free market economy under the incursion of states
and globalisation.
But the question still remains if it all needs to be so. I beg to differ. In fact I do
believe that once we manage to convince ourselves that this instrumental concept of
CI is detrimental to the development of our companies beyond a certain level where
they get stuck as marginal utility withers away, then even with a lot of the above
generic factors unchanged we can do a lot more at the level of individual business
entities to enhance value creation.
1.2 The Impact of OCM on Lean
With OCM being finite, programmatic and asset-based its effects on Western Lean
are likewise portent with limitations. Toyota Production System basically boils
down to two strategic notions in a company’s culture: customer orientation and
continuous improvement through people (Ohno 2012; cf. Harada 2015). Let me
focus on customer orientation in this specific line of thought to indirectly support
my argument for CI.
Customer orientation, whether we mean internal or external customers, is sup-
posed to be definitive of any high-performing organisational setup. It means that the
wholeness of the organisation should be so forged that it become able to serve its
customer(s) as a single entity. Wholeness in this sense means that there are no
internal obstacles, impediments within or up to the relevant interface, or, which is
the same phenomenologically speaking, that there is no reality of the supplier
1.2 The Impact of OCM on Lean 7
processes from the outside other than that combined they supply either seamlessly
or not.
In other words customer orientation requires that a given organisation be
regulated for maximum downstream performance with the customer bearing no
awareness of its internal realities and, what is almost the same, that there are no
excuses sought or manufactured for underperformance. Now, the way OCM
structured it cannot happen with OCM-focused companies.
Why is that so?
Asset-based development qua OCM implies that we envisage develop-

ment in terms of finite convergence, primarily, on the metrics attached,
i.e., goal attainment. Improvement is understood as the gradual progres-
sion toward and the eventual attainment of the target KPI’s according to
standard technology and work procedures, followed by the formalisation
of a new target.
For the time being let me be critical of this logic to the extent that the dominant
practice of policy deployment and goals roll-down in the course of which higher
level goals are cascaded down to lower levels allows for neither aligned and
synchronised goal attainment across systems nor autonomous norms improvement.
If this is true customer orientation fails.
And it does. As for aligned and synchronised goal attainment it would typically
not take place due to the reality of different service capabilities around different
assets. One team can be better than the other for a plethora of reasons including
internal culture, team leadership, skills, strategic positioning within the value chain,
remuneration, the nature of the job etc. Even if goals are aligned their attainment
will not happen at the same time. In some corners targets still remain stretched
while elsewhere they are regularly attained, and as a consequence the improvement
campaign wanes and OCM terminates only to lose grips on the hard-won results.
This happens typically where lines are not properly balanced or processes are not
tuned. Constant, principled goals and system adjustment to overcome this obstacle
is a phenomenon virtually unknown to the business community, as I shall prove
below, which then undercuts expectations for increased downstream performance
and customer orientation.
Indeed, more accurately perhaps, it is poor customer orientation in the

first place that sets the tone for the lack of system adjustment and the
wrong selection of OCM as the ultimate development framework. When
therefore I criticize OCM I criticize it as a choice in the first place also
reflective of poor customer orientation. Its pure existence is critical of the
type of Lean practice that I will dissect in more details below.
Similarly, autonomous norms improvement is out of the question at

overperforming workplaces as this would disrupt even reasonable balance and
alignment, result in robust takt time differences and/or instability or accrual of
work-in-process, not speaking of occasional peer pressure going against
overperformance.
In the Procrustean bed of OCM every attempt at better downstream

performance falls prey to the silo organisation of asset-focused practices.
But there is even more to this. All things considered the stricture on
aligned goals and norms improvement generates cultures that are spe-
cific to and fermenting around a given piece of technology or, which is the
same, around the actual practice of goal attainment. Team cultures are
engendered and often ossified in team practice.
The ways things are done and the way of the world seen from one end of the shop
floor can be very different from the perspective of the other end, and this becomes
even more pregnant when the distance grows within a supply chain or when
crawling higher in the hierarchy. Consequently, what we call the true culture,
contrary to the culture exemplified in executive wishes, may vary from place to
place, from asset to asset, from team to team without much linkage between them.
Executives tend to believe that they can tame these differences through effective
goals deployment, through the sanctioning of standards, work standards and cul-
tural standards included, and through swapping the people around to allow them
dips in different teams. But that is a vain hope for two reasons. Firstly, the pressure
exacted by the specific practices and behaviours along with informal alignments,
often vested in personal relationships pointing beyond the walls of the organisation,
effectively thwarts if not the formal system-level standards themselves and compli-
ance with them but certainly the commitment to them, and thus caricatures execu-
tive efforts. What happens is that management via standards targeted by OCM
under the control of engineers and/or driven by metrics-turned objectives will
always create inalignment beyond any given local or team practice simply because
the two, asset and system levels, are necessarily incompatible, and by serving
different interests they remain private to one another, invoking instability and
resistance at asset level and sluggishness at higher levels.
It is indeed an all too common phenomenon marring the change process

that OCM understood as convergence on standards short circuits cul-
tural integration across larger systems, and silos prevail.
Even more fundamentally, at primary or technology level (technology meant as

a primary equipment as well as procedures directed typically at material or data
conversion), OCM may create a cultural fit to serve the target standards but even in
1.2 The Impact of OCM on Lean 9
the rare case that the culture will not be about firefighting it will by necessity
become instrumental to the same standards and its capacity to look beyond them to
higher levels of the organisation will greatly diminish.
Operational change programs are prone to engender not only silos but
also rigid, die-hard cultures at asset level, incapable of self-reflection and
cooperation. With this there will remain only a slim chance for either the
command-based or the autonomous transcendence of locked-in
practices. OCM fails in both ways as a CI platform.
All this is exemplified in the career of Western Lean. First of all, there is this
entirely mistaken concept of Lean as a toolbox which I would like to promptly
dismiss. “Let’s become Lean, shall we deploy 5S?” Or, “let’s become Lean and cut
work-in-process”—only to get as far as painting the floor lines and letting the
inventory build back within a couple of months. And so forth. Nothing could be
further from the intended benefits of Lean than the deployment of extra tools over
existing ones, of extra technology to control the existing flood of technology.
Likewise, while TPS considers tools as feeding on the philosophy of improvement
and exposing failures, the Western idea is that tools solve problems (Art of Lean
n/a). This major fall-out also exemplifies the difference in their approaches to
problems of which more will be said in due course.
But then even amid those efforts that are cognizant of the strategic importance of
customer orientation and continuous improvement, OCM keeps prevailing as the
logic of Lean development. Lean as a program or project rather than Lean as a
mindset is common even at good companies. Lean as, effectively, part of OCM
entails the finality of Lean somewhere down the road where all our sufferings end
and we shall be “excellent”. But sadly, this will just never happen. The Toyota Way
or TPS as the paradigmatic CI concept of our time contains no end and its very
nature is endlessness proper. Anyone who sees an even so distant end to their Lean
journey might end up very quickly to be gravely wrong. And where they end up is
typically not the otherwise right perception that no end is coming up but rather with
the journey over.
What is so frustrating about TPS is that it is not an extra hand to congratulate
ourselves but always to caution that anything could go better. What is missing from
the half-filled glass, not what is in there. This pressure is hard to bear on a
permanent basis even for someone with a proper understanding of it. As opposed
to Western Lean understood at best as a succession of struggling OCM programs,
renewed by the periodic redeployment of policies, Toyota Way or TPS is a mindset
that is defined by kaizen or continuous improvement, CI being the DNA of the TPS
culture, as is fashionably said.
TPS and OCM are in fact incompatible as frameworks of mind. OCM is rooted
in the old culture of mass production, push systems, asset-focus, silos, and cogs-of-
the-wheel instrumentalised humanity, while TPS and CI are meant to be human
systems applied to productive environments. When therefore we talk about CI we

ultimately appeal to the organisation of humans by humans for human purposes,
and we are seeking the best ways to represent the interests of productivity on such a
platform.
Even if we understand its benefits our problem is still there that there are no
easily intelligible ways handed down to us as to how create such a platform.
What Is Continuous Improvement,
and What Is Not 2
2.1 Continuous Improvement at Toyota
To reliably possess the continuous improvement capability is the same as having CI

as the chief principle (or mode) of existence, or, in others words, that everything
else in the nature of a given culture points to and serves CI as its objective. In a CI
organisation the CI culture underlies any purposeful activity of the organisation and
all activities revert to it as if to their ultimate goal. It is not the technology and not
the processes that define the expectations against a culture but strictly the other way
around.
Now, how is such a culture constituted? As I pointed out above in the Introduc-
tion, in a way that each one of its constituents is in support of CI. We do not call a
culture continuously improving if periods of stagnation or decline are experienced
let alone allowed in the processes and to revitalize them external help is needed in
the form of policy re-deployment, an OCM project, or other discreet, non-systemic
measures. This is, however, the case in an average company, even where there is at
least a more or less faithful understanding of CI, such as that it is not confused with
random, casual, or just puzzling improvements in the value chain. In such
companies even if they have a more or less distinct and coherent CI platform in
place the latter’s power may dissipate from time to time as most probably it leaks
somewhere and/or lacks coherence in the first place. What happens is that the CI
platform or the universe that is meant to encompass the whole reality of the
company may turn out not to be structured just well enough to be able to exact a
permanent pressure on and mould the organisation toward improvement.
The ultimate capability of continuous improvement is a form of existence for a
company. The company is put together in a way that it can only improve and if it
does not then it has lost at least one of its defining characteristics. When we talk
about organisations as human systems in reflection of the lesson that asset focus and
OCM cannot generate a culture capable of dependably attaining and superseding
standards, we also mean that a CI organisation will be organised around people and
it will be a human system.

12 2 What Is Continuous Improvement, and What Is Not
All this is very much apparent from the case of Toyota. In reconstructing the
Toyota approach to culture Jeffrey Liker and Michael Hoseus are very clear early
on in their book that “[f]rom the time Toyota first started its operation, the leaders
believed that the key to success was investment in its people. The Toyota culture
has evolved since the company’s founding and is the core competence of the
company. It is the reason why operations are lean. . . The Toyota Way is first and
foremost about culture—the way people think and behave is deeply rooted in the
company philosophy and its principles. At the core it is about respect for people and
continuous improvement. . .” (Liker and Hoseus 2008, p. 4).
You hear very much the same from Art Byrne: “(. . .) Lean has to be your
strategy—the foundational core of everything you do—if you are to be successful.
(. . .) Most important, you have to understand that the main thing you are trying to
transform is your people.” (Byrne 2013a, 16 %).
“Rooted in” or “foundational” are just a little less than “constituted by” that I
used above but they effectively mean the same. Their intent is the same. Behaviours
and practice are rooted in a certain philosophy and principles, and together they
constitute the culture of continuous improvement so much characteristic of the
Toyota Way. This philosophy is and this culture are about continuous improvement
through the people. Analytically speaking, that is, before anything else would
happen on the shop floor or in the value chain the principles have long been
identified in “people and kaizen first”, and the company practice will build on
them as on fundamental assumptions. The tools are then only secondary, indeed
supplementary, to this philosophy.
Toyota developed this mentality in the years of austerity and small order batches
back in the time when it was a producer of automatic looms and has not abandoned
it ever since. While the heart and soul of TPS, so to say, are prior to the bones and
flesh stratifying on them if we take an average company we see that its philosophy
and principles are at best inferred from but mostly adds-on to a more or less
adequate reading of a culture of tools application, with culture itself rather a
by-product of day-in day-out fire fighting with the armoury on hand (Anderson
2010).
Some would say that the principles of people and kaizen are a passion mongering
cover-up for the very materialistic admission that without these there is not much
point in pursuing profit in a larger scale. Without people and the people’s coordi-
nated efforts to improve their productive environment we would not be talking
about either production or value creation of any sort, while if in turn a company can
secure the aligned thinking and activity of its people in the interest of continuous
improvement, other things equal the business can run only well.
I cannot refute this argument but there is also little need for that. In these pages I
do not want to demonstrate that Toyota is either a welfare institution, or a charity, or
a philanthropic organisation of any other sort. It is certainly none of them. What I
want to prove is that Toyota’s approach including its turn to the people, for
whatever purposes it happens, pays better off in continuous improvement. And
my question again is why Western companies, in awareness of this, cannot depend-
ably take after Toyota. Later in these book I’ll come back to TPS while developing
2.1 Continuous Improvement at Toyota 13
an ethical stance against the instrumentalisation of people. I’ll argue that yes, there
are some disturbing aspects of the TPS practice along with some very agreeable
ones. But then we are not there just yet.
The Toyota Way has gone through many decades of evolution in a very special
fermenting crock where Japanese traditions, values, and the austerity of the 1930s
and even more of the post-war era met with a family’s long-term commitment to
œuvre building with no haste for quarterly show-offs, much less concern for
shareholder value, and no interest whatsoever in unsubstantiated asset expansion.
Toyota is fairly unique even is Japan, which is actually a warning to the

observer of an evolution rooted in a very specific constellation of histori-
cal context, values and recognitions, constraints and virtues, industrial
expertise and skills, leadership and customer pool etc. And as much as
the context of fermentation remains irreproducible so does the actual
Toyota culture which, as it turns out, is much more the product of a step-
by-step evolution than conscious design—an evolution to demand a good
deal of self-confidence as well as an almost blind trust in the future such
as today’s companies are eminently lacking in.
The most telltale sign of the uniqueness of Toyota in its home country, however,
is the inability of the world to distill TPS into Lean. What is analogous to the
difficulties of transplanting the institutions of the rule of law and democracy across
the world it has ample signs by now that home-grown TPS, rooted in the peculiar
line-up of the Toyota story, is impossible to just copy paste elsewhere. The
reconstruction of TPS cannot reproduce its one-time historic and cultural context,
therefore no matter how the world grasps the Toyota Way itself, whether we
consider a given reconstruction faithful or not, the efforts spent on reproduction
cannot result in an authentic functioning replica as long as the original context is not
uprooted and exported in whole. Indeed, under such circumstances, one had better
see the Toyota Way as Toyota’s (own) way and not a way for anyone else. The
experience amassed during many decades of evolution, powerfully constraining
transplantations, just cannot be synthesized into an analytic framework of
implementation.
It is the last of my desires to create a myth from Toyota, I am not even the right
person for that. What I want to make understood however is the context-bound,
evolutionary nature of change in general and the inoperability of ready-made, off-
the-shelf “solutions” in organisation development in particular. When I said above
that the intent of this book is to provide a framework of operations improvement I
kept this concern, i.e., to avoid recipes, very much alive for myself. And while the
reader must therefore not lay their faith in the reality of a step-by-step model of
change that is both simple and thorough and still Toyota I repeat a claim for
actionability. While aware of my own strict expectations of continuous improve-
ment fleshed out just a few pages earlier this model to be entrusted to the reader’s
attention has to remain highly useful in the sense of providing a way out of the
impasse created by the context-bound nature of TPS on the one hand, and the
cultural as well as business constraints on today’s smaller and larger corporations
on the other.
Reproduction is impossible but reconstruction, understanding, and translation
are not. Translation will lose something of the original but gain something anew and
will certainly speak to one’s own folks. What I hope to gain against the evident and
necessary losses, as I pointed out earlier, are transparency, speed and sustainability.
I expect the model to balance out the frustration over the inoperability of the TPS
original outside Japan and its consequent bastardization into Lean, and will be
specifically useful for companies that are tired of or even lost in their own
translation efforts.
2.2 The Toyota DNA
As its original in biology the Toyota DNA, too, is a double helix, of product and
people value streams, stabilized by problem solving (Liker and Hoseus 2008,
p. 37ff.) The underlying (cultural, philosophical) assumption of “kaizen through
the people” originating in the broader Japanese culture, exemplified in this connect,
and purportedly reinforced in every single moment in the life of the Toyota Motor
Corporation precede the actual values and norms Toyota people live by on the shop
floors, the values which in turn define the behaviours and the artefacts visible to the
external eye (ibid., p. 6). Indeed it is the third—the behaviours and artefact layer—
that grasps the imagination of the industrial tourists and would be taken home
without sensitivity to the two more profound layers. It is through the control of this
layer that industrial tourists back home want to create the impetus for sustainable
change. Change, nevertheless, at least sustainably, just resists to happen much like
explained earlier.
That philosophy and principles should define a company culture and govern
floor practice is a mere laughing stock in Western eyes (cf. Bower’s sympathetic
approach 2003). We do not realize that we shall live by a philosophy and we shall
develop principles of some sort anyway, only they will be reflective of an often
hidden, informal, ad hoc, counterproductive culture underlying as-is practice. Lofty
principles will be replaced by the rather base principles of survival, conflicts, and
cynicism. Philosophy will center around appearances, power, and finger-pointing.
Is it a reality in the West? Of course, it is. (More of it below.)
A sweeping consequence of this reality is the overwhelming lack of imagination
to achieve something great. Ambitions among CEO’s and managers are increas-
ingly on the wane, giving way to complacency, caution, incredulity, egotism,
politics, turf wars, you name it.
2.2 The Toyota DNA 15
If continuous improvement is not in the DNA of an organisation in a way

that we see it at Toyota and at the same time CEO’s fall captive to and
cannot or do not wish to amend this lack of perpetual buzz, companies
quickly grey into the background and the working life of employees can
easily become meaningless (Michaelson et al. 2014). When we talk about
the Toyota DNA we talk about meaningfulness in creation.
Not all positions, for sure, are equally productive in this respect. Yet, the general
climate is supposed to be like this. Again, as I will amply demonstrate, I am not an
uncritical fan of the actual Toyota practice and I do not hold a bulk opinion of our
Western business culture either. I am looking at the Toyota Way as an idea at this
stage and at the West as another (underperforming) idea, reducible by and large to
OCM. Ideas that actual practice do colour but they are still there as standards. And
if I am right our standards are largely misplaced.
Quite characteristic of our (Western) approach to kaizen is the publisher’s,
Norman Bodek’s Foreword to Shigeo Shingo’s valuable book, Kaizen and the art
of creative thinking. Bodek says: “Kaizen is a powerful process that can and will
save the average American company over $4000 a year, per employee, if applied.
(. . .) I am sure than many of you reading this book will also make a million dollars
for your company by taking the material in this book and teaching the information
to all your employees.” (Shingo 2007, n/a).
In fact no perspective on kaizen could be stranger to the Toyota culture and no
remarks more misleading even if Toyota is not in the forefront of Shingo’s
argument. This instrumental understanding of how knowledge is transferred and
what ultimate objective it is supposed to serve (expressed in financial terms) is a
typical Western misconception of continuous improvement already castigated here
but happily disseminated by Bodek.
Curiously, Bodek should be aware of the fallacy, too. Toward the end of the
book, in a conversation with David S. Veech, then Executive Director of the
Institute for Lean Systems in Louisville, Kentucky, when talking about how Six
Sigma avoids ordinary workers, a robust problem solving method reserved with this
for a select few, he realizes that contrary to the result oriented Six Sigma the once
admired Quality Control Circles method did die out in the States. Veech interjected:
“I know why we are not doing it in America; because Quality Control Circles were
all about the process and what we seem to care about are results.” Bodek concurred
by reflecting on his own experience: “I am working with one company, and all they
can think about is profits, and the company is melting and disappearing, instead of
focusing on the process. Focus on the right process and you will get the right
results.” (Shingo 2007, pp. 232–233) Isn’t that so true? Why then reinforce the
wrong approach in the Foreword?
Then Fidelity Investments Chairman and CEO Edward C. Johnson’s Foreword
to Maasaki Imai’s ingenious Gemba Kaizen (1997) grasps the essence very nicely.
“With practice (. . .) kaizen or continual improvement, can become a way of life.
It’s an attitude, a spirit that prevails at all times in the company. It’s nothing that you
expect to implement overnight or turn on when sales start declining. But once
kaizen does take hold, employers and managers alike begin to recognize that part of
their job—as important as doing the work—is learning how to improve the way
they do it.” (Imai 1997, pp. xii–xiii). Art Byrne, once President of Wiremold, one of
the earliest and most eminent companies to be transformed under the aegis of
Western Lean and later bought up by the French Legrand, the take-over putting
an end to the company’s intensive Lean journey (cf. Emiliani et al. 2003),
consolidates this into a simple admonition: “Don’t just do lean; be lean” (Byrne
2013a).
A champion of quality circles, Imai reinforces the position also taken by this
book on teaching (preferring learning instead) and on asset expansion (vis-à-vis
kaizen). In a conversation with Art Byrne he is told: “I think that about 90 % of
American businessmen don’t understand the depth of the disparity in the Japanese
versus American manufacturing system. Almost all U.S. manufacturing managers
that you talk with today will tell you that they are doing just-in-time, but most of
them are way off-track. (. . .) Very few understand how fundamental you have to get
and how detailed you have to get, and even fewer understand that it’s really a
people thing. You have to change people’s attitudes, and that takes time, a lot of
commitment, and a lot of education. We tend to be a country that is oriented
towards making this quarter or making this month. This is turn makes it difficult
for long-term change to occur. We talk about it, we publicize it, but when it comes
right down to actually doing it, most companies balk” (Imai 1997, p. 163).
Imai himself also concludes: “The kaizen concept explains why companies
cannot remain static for long in Japan. Western management, meanwhile, worships
innovation: major changes in the wake of technological breakthroughs; the latest
management concepts or production techniques. Innovation is dramatic, a real
attention getter. Kaizen, on the other hand, is often undramatic and subtle. But
innovation is one-shot, and its results are often problematic, while the kaizen
process, based on common sense and low cost approaches, assures incremental
progress that pays off in the long run” (Imai 1997, p. 2).
But still, for all their wisdom, isn’t here some hubris, pretension, and even, one
might say, a lack of empathy with the Western way echoed in these and similar
lines? Look at Imai’s enrollment of the ideas associated with and conditional of
kaizen that he says must be learnt to realize kaizen strategy at all (Imai, ibid.):
• Kaizen and management

• Process versus result
• Following the PDCA/SDCA cycle
• Putting quality first
• Speak with data
• The next process is the customer
Right at the beginning, the first three conditions go diametrically against the
Western mindset as Imai sees it and I see it, and to a lesser degree maybe all the rest
of the claims do. What I want to emphasize with this is a coherence problem in
implementation offered by a wide variety of TPS/kaizen/Lean books, not just
Imai’s earlier Kaizen (Imai 1986) and his Gemba Kaizen (Imai 1997).
If our own, perhaps wrong-headed, culture in the West has priorities that
create a generally unfavourable context for enduring, sustainable kaizen,
why would the repetition of claims for enduring, sustainable kaizen help
us integrate this approach?
By looking at possible answers to this question we shall perhaps also
be able to answer this that why Legrand would kill—on condition that it
is not apt to act wholly irrationally—a successful, even spectacular Lean
program in its main market if not for other benefits; and indeed why TPS
has such a slow, excruciating career in the West, and for that matter in
Asia, too, for all the obvious benefits a TPS culture carries, obvious at
least from well-written sources and its adept champions? Well, let me
make this tentative suggestion at this point that maybe TPS is, after all,
not worth the effort; and paradoxically, while enthusiastically promoting
it as the most developed, almost only solution to operational woes, we
inadvertently drive managements to the less painful but riskier sources of
growth, i.e., in M&A’s, strategic asset management, and new markets,
reinforcing the very same cultural dispositions that we set out to cure?
Curtis Quirin, a seasoned manufacturing executive, says, and let me cite him in
more length: (Quirin n/a). “If you think about it, there are really only a few
companies that can be considered lean: Toyota, Honda and Danaher. The rest of
the companies that embark on a lean journey, in my opinion, seem to only dabble
with lean tools when they are convenient, and then the efforts fade away over time.
It’s surprising because lean thinking has been mainstream for more than a decade
and there are thousands of people who have been trained and understand lean
principles. Jim Womack and the Lean Enterprise team have done a great job as
thought leaders; and in the book “The Toyota Way”, Jeffrey Liker has broken the
Toyota Production System down to its essence.
I visit many companies each year, and even in some of the worst, I am often
surprised to find someone there who has had lean training. They are usually able to
talk about waste or single-piece flow, but I leave wondering what happened. Why
didn’t the lean activity continue? Why was there no follow-through? Many times
during plant tours, you will see evidence of lean tucked in the corner or off in the
back. I wish I had a dollar for every unused andon signal, heijunka board or
employee glass wall that I have seen set aside and gathering dust. (. . .)
Over the years, I have observed some of the reasons for this lean fanfare-and-
fade phenomenon. You can probably add your own thoughts to this list, but here is
my best shot:
• Not used as an overall business philosophy

• People versus process dependent
• Use of ‘tools’ only
• All functions aren’t committed or involved
• Conflicting metrics
• Good for the plant, but not for senior leaders (it has to start at the top)
• Forgetting the front and back end of the business (suppliers, customer demand
and inventory strategy)
• Home run mentality
However, when you really dig into it, the basic reason why the implementation
of lean fails at most companies boils down to culture. Not Japanese versus Ameri-
can, but the corporate culture and how the company is led from the top. What most
leaders fail to realize is that lean is a management philosophy, not simply a
collection of tools for material and information flow or problem solving. And,
most corporate leaders either do not understand its value or do not have the patience
and control to implement it. Slow, steady continuous improvement does not lead to
immediate recognition, quick promotions or soaring share prices. Successful imple-
mentation requires something that is very rare in both people and organisations:
constancy of purpose. However, if you stick with it, it is amazing how the little day-
to-day improvements add up over time; after a few months, you look back and
realize how much has been accomplished.
The problem is that at most companies, managers are still looking for the ‘big bang’ project
or turbocharged effort of their employees. They all sound good and come with great fanfare
or personal sacrifice, but they are usually not sustainable.”
The reader will recognize that the upshot of this argument is in line with what
has been said in these pages. Quirin is complaining of, just as Imai earlier pointed
out in his quite similar inventory, the lack of a constitutive philosophy, the
dominance of an asset and tool centered mindset, lack of sufficient interest in
processes etc., while at the same time chiding leaders for not realizing the impor-
tance of all this. On balance I do share his representation of the facts but I do not
quite share his understanding and sentiments. Can we really say that it is all a failure
of executives, or is it perhaps something entirely different, maybe rational calcula-
tion on their part?
From what we have read one can only adduce that the executive and manage-
ment culture can be an enduring bulwark against change.
Much the same way, however, as the Japanese are inculcated from their
early youth with the values that would finally serve as the platform for
Toyota it is true for our own (put collectively) Western culture that
certain values and dispositions stand out from a variety of others and
(continued)
can easily be considered fundamental. To challenge and change them in a

work environment, however portent evidence is called forth, is not only
often pretentious, but may also be harmful for people as well as
community.
It is little wonder that such cultural dispositions (or inhibitions in Quirin’s and
Imai’s assessment) will equally leave their mark on the thinking of a chief executive
and will be reinforced by the collective wisdom of the organisation.
Any decision, as a result, against TPS, entailing the behaviours listed by

Quirin and Imai, will then be indicative not so much of a failure to
demonstrate the ‘right’ attitude to change as the surfacing of rational
calculation which incidentally plays down the TPS option.
It is curious then how to proceed with TPS/Lean implementation in these

circumstances.
Strategies of TPS/Lean Implementation
3
3.1 Lean as a Platform of Kaizen Events
Leadership and management reflect two different attitudes to governance. The

former’s focus is on the future and on the people (to be led). The latter’s focus is
on the present, or at least on the foreseeable, programmatic future, and on assets. To
‘manage’ people, as we often hear in company corridors, is a short-hand for dealing
with people as assets (resources) and driving them toward some pre-determined
end, most probably expressed in numbers.
We have already seen that Lean as a department of operational change manage-
ment (OCM) programs will fall short of effecting long-term improvement, the
reason being its inability to stabilize a systemic continuous improvement
(CI) culture.
Without a functioning culture to support CI, or rather, of CI, continuous

improvement just does not happen.
Alternative Lean approaches will try to manage (indeed push) people through to
pre-set target KPI’s, at best, via standardized work. Accordingly, people considered
as instruments to leverage growth is a constant mark of broken Lean cultures, which
once again underscores the fact that Lean has fallen prey to the Western mindset
wired by assets and OCM. Other than that of Toyota all the rest of the transforma-
tion philosophies are structurally ill-devised, inflicted with a people management
mentality that cannot by definition anchor CI in the pervasive cultural fact of the
organisation. Put in another way, companies cannot develop a cultural reality
constituted by a pervasive, organisation-wide CI practice; instead, a driver for
improvement, whether top-down leadership, system, process standards, or technol-
ogy, will always remain destructive of whatever CI principles will be upheld. It is

22 3 Strategies of TPS/Lean Implementation
important to note that, precisely for the reasons recovered earlier, a CI culture is
never managed.
Any managed culture, management understood as an instrumental

approach to people in particular, will have its verso in the informal
culture of resistance to change and improvement, and it will conse-
quently fall back to OCM.
I shall distinguish between several TPS/Lean strategies of this, largely, failed

OCM course among which dedicated OCM strategies (second on the list) are only
one. This is the full list how Lean is conceptualized and practiced around the world:
1. Installation of select tools

2. Lean as a department of OCM
3. Lean as kaizen events
4. Behaviour improvement via management systems
5. TPS spin-offs (or XPS’s)
6. The Toyota Way (or TPS)
With the first two entries on the previous list sufficiently covered let us first turn
our attention to the concept of Lean understood as repeated short-cycle kaizen
events.
The typical company in the mass production era was run by a vastly hierarchical,
departmentalized structure with control-freak, uncooperative managements, large
pieces of technology organised into push systems preferring long batches, and
instrumental training (lower level managers are trained in what the executives
believe they need in order to run their assets and people). Managers were brought
up in a milieu of budgets, budget attainment, central planning, monthly financial
reporting, weekly KPI (key performance indicator)-meetings, and daily firefighting.
Run-of-the-mill operations improvement meant the application of the actual man-
agement fads (Statistical Process Control, Total Quality Maintenance, line balanc-
ing, re-engineering, MRP etc.) to assets and standards, exposed by departmental
needs and controlled by budget goals. A lot of consulting effort was expended in the
meanwhile to launch renewed attacks on technology level controls, and manage-
ment consultants at the point of execution like Proudfoot and IMPAC grew famous
for their focus on the supervisory level and addressing, after a so-called area
development phase, the tool gaps in the systems of management along with inade-
quate supervisory behaviours. All was about better controls on people and technol-
ogy in a centrally planned, departmentalized, push environment.
3.1 Lean as a Platform of Kaizen Events 23
In the end everything boiled down to behaviour management. Training

was highly instrumental and was designed to manage assets and people,
metrics did the same for control, hierarchy to deploy goals and manage
by objectives, information to gain transparency, while silos were kept to
facilitate the exercise of power, and all the lenient attitude to waste could
just as much cover the lack of confidence in the system as indicate the
poverty of it.
This behaviour management system was heavily underperforming, it was losing

out against TPS.
What happened with the consequent transition from mass production to

TPS spin-offs was that technology and, to a limited extent, the process
levels did undergo a radical transformation, leadership strategies, how-
ever, barely changed.
Leadership became more hands-on perhaps, with CEO’s and change agents
more willing to show up on the shop floor but the dispersion and expansion of
leadership skills failed to follow suit and as a consequence cultures remained
instrumental and stalled.
It is not as if it was not high time to change the ossified mass production cultures.
Besides routinely abusing their customers’ patience with poor quality and
immensely wasteful at the same instance of time, material, energy, space, cash,
and brains, old mass production came to a brink of collapse in the automotive
industry with the oil crisis of the 1970s. It was the challenge invoked by the
Japanese competition and the surge in oil prices that finally forced the Big Three
American car makers (GM, Ford, and Chrysler) and their vendors to start to think
about ironing out their operations and finally to change pace. Some did it solely and
radically through repeated kaizen events, some by retaining their system heritage
and trying to combine it with kaizen.
Art Byrne says that moving into a Lean configuration “will take a very big
multiyear effort” with a lot of resistance coming up “at pretty much every level”.
Therefore, “implementing a Lean turnaround cannot be delegated down in the
organisation. Without strong leadership pushing everyone forward to improve all
your processes in order to reach your financial goals, not much will happen. Even if
you make some gains, the overwhelming tendency is to go right back to the old
way. I have never seen this not happen. It can be overcome only by a strongly
determined leader with a clear set of goals (vision) who is actively driving the
change” (Byrne 2013a, 18 %).
One cannot but believe Byrne that Lean initiatives do retract. Not speaking about
his daunting timeline (“It will take years before you can even start to think you will
be successful”, ibid.) I do however nurture concerns about his position. Apparently,
for Byrne as well as for such important figures of the same conviction at another
seminal change experiment at NOK-Freudenberg as Joseph Day (Liker 1998,
pp. 179–200), Tom Faust (n/a), Ted Duclos (2014), a CEO-level leader with strong
determination is someone who each year spends weeks and months on the shop
floor participating in kaizen events enabling him to drive, to coach, and also to
become a better leader. “Most of my time,” Byrne says, “was spent trying to make
sure that we were making steady progress toward achieving all of the stretch goals
aimed at process improvement. I spent a lot of my time on the shop floor looking for
what had changed and reviewing the visual control charts at each cell.” It may be
apt to note that Byrne had eight companies at a time at Danaher and between eight
and twelve at Wiremold reporting to him!
I wonder if the immersion to this extent of a group executive in floor-level
activities is reflective of an efficient system. Indeed, where is the place of the lower
level managers in this setup? Can we say that this, compared to system-building, it
is a better, or the right, way to lead floor improvement efforts? Is it not possible that
while little interested in systems Byrne’s evidently larger-than-life character and
micro-managerial zeal also inhibited or at least discouraged first line managements
from learning what it would take to become floor leaders and coaches?
It would obviously be difficult to judge from my desk whether this is true or not,
and not only difficult but also beside the point. The spectacular results that Byrne
and his staff (or Freudenberg-NOK of the 1990s) achieved with frequently
repeated, extensive kaizen events speak for themselves. Cutting setup times to
0.5 % of the original, and indeed from 320 to 1 min on certain occasions, dwarfing
lead times in proportion of 30–1, freeing up half of the floor space, while achieving
an increase in operating income by 13.4, with enterprise value up 2467 % in
Wiremold—well, all this did not just happen. Something did work that we can
only trace back via the participants’ recollection (Kijak 2015; Fiume n/a; Emiliani
et al. 2003). Yet, my objective in this book is not the endorsement of cases but a
reconstruction and the eventual reproduction of ideas and practices in different
contexts, indeed in any productive context, for the benefit of my readers. Therefore,
I am much less interested in the results of a transformation per se than in the
transparency, in the cogency, and in the reproducibility of a working method.
If we look at Byrne’s achievement in this light there is reason to be cautious.
Methodwise Byrne is far from educative. Other than his own formidable impact on
his environments we can discern the following tableau of reproducible meaning
only:
1. One has to understand and commit to three management principles serving as the
foundation of future transformation (Byrne 2013a, 16 %):
a. Lean is the strategy
b. Lead from the top
c. Transform the people
2. Conceptual understanding and practical proofs of waste as well as evidence of
good practice will necessarily lead to an enlightened acceptance of Lean as the
optimal driving force in management. I quote him: “If, for example, you are on
four teams, and each time you achieve a 60 % drop in defects, a 50 % produc-
tivity gain, a 50 % reduction in floor space, and 85 % reduction in lead time, and,
if you are a manufacturing company, a 75 % reduction in inventory, what is your
reaction? Don’t you think you would be starting to gain some insight into the
waste that exists in your company? Wouldn’t you also be starting to understand
how easy it is to remove the waste by improving the way you add value? Well,
this is what I am talking about, and it’s why you need to commit to becoming a
Lean expert. The more you know, the more waste (i.e., opportunity) you can see.
In addition, the more you know, the easier it will be for you to break down the
barriers of change and improvement that currently exist in your organisation.
Most important, the more you know about your [company’s] value-adding
activities (i.e., how bad they are), the more willing you will be to set the type
of stretch targets that are necessary if you are to be the leader in your industry.”
(Ibid., 19 %).
3. Kaizen events in the duration of a week can make wonders. They bring out
people’s ideas, ideas are implemented on spot, the “change for your value-
adding employees is immediate and dramatic. All of a sudden there is an
organised company approach, with dedicated resources and the strong backing
of the CEO, to try to make their job better. After all the waste is removed, the job
will be safer, easier, and take less time. All of this translates into more output
with less effort on the employees’ part, and they get it right away.” (ibid.)
In Tom Faust’s account the Freudenberg-NOK recipe, first addressed to a small

production area, then expanded across the plant, is as follows. (The numbering of
entries is equivalent to the numbering of Stages in his contribution.)
1. Analysis of the baseline batch production system.

2. Picking the “low-hanging fruits” and “polishing up batch production” by doing
kaizen on areas with the most opportunities (in this case the molding presses).
Significant (10–50 %) immediate improvements achieved in all key indicators
including productivity, scrap, parts movement, lead time, and inventory. Transi-
tion to a more cellular environment on its way.
3. First steps toward a production system. A one-piece flow U-shaped cell is
installed. The distance travelled by parts dropped from the original 2200 to
20 ft. Scrap rate down from 6.8 to 1.3. Work-in-process inventory from 18,000 to
2040 pieces.
4. Plant-wide reorganisation including a pull system. Dock-to-dock lead time
(measured from the arrival of raw material to the shipping of finished goods)
fell from 5 days to 1 day. The rationalization of obsolete overhead function frees
up additional cash.
5. In 3P (production preparation process, essentially a dedicated product and
process design kaikaku, i.e., radical change) smaller capacity, more flexible
assets replace dinosaurs. Additional investments create additional capacity. “In
every case where we’ve practiced 3P, even in Freudenberg-NOK’s already lean
environment, capital was cut more than 40 %, manufacturing cost was reduced
more than 20 % and labor content fell more than 50 %.” The initiation of this
phase did not happen before 1998, almost a decade after Freudenberg-NOK had
set out on its journey, already in secure possession of 5S, flow and pull
capability.
6. Six Sigma was introduced to further reduce defect rate.
Listening to Art Byrne and Tom Faust one starts, however, to wonder why there
are so many mediocre and so infinitesimally few great companies in the market.
Their rationalistic representation of joint understanding and achieving, together
with a grain of authoritative back-up, so effectively denigrates the common woes of
the larger business community that it is almost petrifying to come along with any
reservations. All the same, I have to.
As for the lesson learnt, understanding and achieving, yes; doing, not so much.
We do not receive a method from Byrne that would bestow the value of a generic
framework on his contribution and help us transfer a condensed package of “what,
who, and how” outside his own realm. (Faust’s contribution does not have this
ambition in the first place.) His message, with due respect, is that if you want an
efficient Lean enterprise then you better hire Art Byrne to do it for you.
Sadly, this is not enough for the purposes of this book. While we look at the ways
how to transform a company and build people it is not enough to learn that it is so
easy and all very rational. Especially when it is neither. The joy of waste removal
and the parallel evolution of a learning environment and good atmosphere might be
(and certainly is) true on fact checking but meaningless when it comes to method,
the logic of implementation, and the participants’ motivation. Ultimately it turns
out that even though it all looked very rational to accept the Lean tenets, the
explanation that would be foundational to accepting them outside its own context
is far from rational. As a matter of fact, mostly missing. In reality, the meagre
reproducibility of Byrne’s world can remind us of the Toyota lesson, to be
supported in more details in due course, that outside its original context some
solutions may not work just as conveniently.
Indeed the question is why would anyone necessarily find joy in Lean? And if
not how could they still be motivated to embrace Lean? Byrne does not cope with
these problems coherently, i.e., in view of the missing principles of transformation.
It might well be the case that people will embrace Lean and some of them will
embrace it because they find joy in it but simply to accept it as an universal principle
on the basis of authority and example would not be very rational, would it?
What is worse, the transformative idea would still be missing as to what

principle could act as a substitute for Art Byrne’s personality to kick in
the whole mechanism of joy and waste removal. Between Byrne and the
people to be transformed via Lean there is a void. When leadership, as in
this case, does not meet a system to disperse and perpetuate leadership
power then there is a fair chance that the CEO will either need to be
ubiquitous, indeed omnipotent, or the practice will break down.
The lesson we can take home from Byrne’s case is that a great CEO may or may
not be able to create a great company but even if he can he may not be able to make
a best practice out of it beyond its own context and, indeed, their own personality.
And that may just not be enough for anyone to choose kaizen events as their
platform of company improvement.
Eventually, my concerns boil down to two. One is that the function of Byrne’s
leadership in the transformation process too much resembles to standard and asset
oriented behaviour conditioning that we discussed in relation to OCM and the mass
production paradigm, except that there is no working system in place. Leadership is
the system. Even more disturbingly, according to his own representation, Art Byrne
himself is the system. (Representation is important here as we deal with a book
disseminating ideas that are meant to be educative outside the author leader’s, i.e.,
Byrne’s, own context.) The second issue is that with the practice of kaizen we
apparently get stuck on the level of asset and cell management. It is not only
characteristic of Byrne but also of most available representations of kaizen that
they tend to satisfy themselves with the technology/procedure or stream/process
level, and we hear much less about the alignment of flows (people, product, work,
financial, and information flows) by system level kaizen.
With top leadership as the driver, the focus of changes limited to the lowest
levels, and metrics imposed to converge on, kaizen events stay very close to
an iterated OCM paradigm, scarcely potent to develop into a full-blown
cultural transformation.
The allure of Lean must be limited for most CEO’s if they hear only about the
disruption that it creates and the hard work that it demands from the whole
organisation. Truly “standard work can be established step by step as you do kaizen
on various value-adding activities” (Byrne ibid., 25 %), but who should in their
right mind embark upon a journey that promises on-the-fly liberty in creation but no
roadmap, no specific targets, and in most cases such a journey cannot be backed up
by domesticated leadership experience adequate for handling volatile
circumstances? Can we go for new work standards via kaizen, that is, for goals
by means, if neither is even remotely known? With people whose cultural prepared-
ness, again, is at least questionable? Who would be so bold as that? Byrne’s way of
cutting the Gordian knot that “[o]nce standard work in established, the important
part is to make sure that everyone follows it” is quite obviously begging the
question.
The incoherence of such a tour de force is something that can only be saved by a
heroic sponsor, in this case by Art Byrne. If I am right, his personal example might
be educative also in the negative sense, of a diversion in kaizen-based
transformations in the direction of leadership fortitude tests and to the subversion
of systemic transformations in the end. Well, and this is exactly how Art Byrne sees
it: “(. . .) getting people to follow standard work will be one of your biggest
challenges. It is probably the hardest part of making the Lean transformation. It can
be achieved only if the CEO insists on it and follows up religiously.” (ibid.)
Byrne’s acclaimed colleague at Danaher, George Koenigsaecker is struggling
with the same perception in his highly practical Leading the Lean Enterprise
Transformation: “The learning of lean practices has, for me, been both haphazard
and slow, mostly trial and error, with multiple trials and many errors before I found
practices that worked well and consistently” (Koenigsaecker 2009, p. 13; cf. Bichai
2015 for a similarly detailed tour de force). The picture of the Lean leader as a lone
ranger in the wilderness is a social representation akin to Byrne’s own self-portrayal
as an ubiquitous force.1 In a striking example how the Japanese concept of the
sensei (coach, teacher), a source of learning and learning with you rather than
commanding, instructing, and controlling you, mutated into an individualistic
fighter hero of superhuman qualities, Byrne was pretty straightforward about his
own role in the whole transformation process. Compared to him Koenigsaecker
represents the hardships of the Lean disciple but of a self-developing, lonely
disciple whose road to conviction and belief is long and torturous, involves a lot
of soul searching, backsliding, and compromise but is eventually finding his own
way—a typical Western story of character and stamina still.
Koenigsaecker, however, is very candid at one point admitting that not only his
“own belief in the core principles of lean came gradually,” it was also gradual that it
dawned on him that “this lean stuff was valuable only if it was a long-term
organisational practice—that is, it became the new way of running the enterprise,
it became the new company culture” (ibid.). Once the revelation took place
Koenigsaecker was also confronted with an entirely different lesson than was
Byrne. He started to sense that all the rest of his learning “was muda (waste) if it
just disappeared when the personal push or energy behind the effort went away”,
therefore, the focus of his learning eventually shifted to the study of the culture
“that sustains lean transformations.”
By taking this step Koenigsaecker opens new grounds over Byrne to anchor
kaizen, and indeed the whole Lean transformation, in a potentially more fertile
practice than mere CEO compulsion.
Abandoning the position of the hero CEO and their leadership skills as the
driver (but insofar as acting as a quasi system also an obstacle) of cultural
transformation he identifies culture as the carrier of change of far bigger
generic importance than the leader’s character may ever gain. Culture for
him starts to become the ultimate source of value, the only true platform of
systematic change, and the leader’s role is increasingly formed as a result
by the demands of an effective system constituted by culture.
1
This character of Byrne’s approach is criticized in some reviews as well. Let me refer specifically
to Matt Wrye’s comments to which Byrne answered in a vein that tells a lot about his approach,
reinforcing some of my own concerns. Cf. https://beyondlean.wordpress.com/tag/art-byrne/
Now, it only remains to be seen if he can properly connect to cultural develop-

ment to create an universal learning platform. My answer will be that he cannot.
While committed leaders can achieve breakthrough and set their organisations
on the right path to culture change (Taiichi Ohno did that), and doing so they can
build commitment on compliance, the stability of improvement will still be some-
what a miracle. The difference between the work of a Toyota leader like Ohno and a
Western leader is that the former can fall back on a long tradition of learning and
values in support of a more cohesive team culture. When talking about the daunting
task of cultural transformation in the direction of continuous improvement the task
is one formidable for a Western leader who has to confront the asset-based,
managerial, egotistic thinking of their likes as well as the atomistic,
non-cooperative, quid pro quo culture of a typical Western nation. To turn an
organisation in the right direction would require the prior implementation of the
right values, right from the point of view of their accord with a long-term,
no-blame, cooperative mindset. This requires not only extra effort and commitment
on the stakeholders’ part as far as the Western practice goes (Byrne repeatedly
advises that outside Lean experts, Japanese preferably, should be involved) but also
a true clean sweep of some of our crucial values and cultural convictions.
Kaizen events are meant to serve as the machinery of change. The ultimate value
of kaizen in the process of cultural change is admittedly as important as the actual
benefits reaped through improved standards and results, yet, for the reasons men-
tioned, progress is slow and precarious at best. According to Koenigsaecker it will
take “about five years of deep experience before [team members] will truly believe
the core principles and practice them in their daily management,” (ibid., p. 102) and
even then statistics say that roughly 95 % of full-blown Lean turnarounds break
down at some point for good and the rest is dabbling at best (cf. Byrne 2013b;
Koenigsaecker 2014).
For any CEO to take the chance the whole undertaking would have to roll
much better odds than that. Not that they cannot toy with one or another
tool, but a full-blown Lean journey may well seem to them as something
not worth either the risk or the effort, and it is little wonder then they
rather settle with a bunch of OCM programs selectively applying Lean
learning and tools. The relatively low odds of a successful Lean transfor-
mation, in turn, prove that leaders generally have hard times putting
through the cultural change that would assure the longevity of continuous
improvement, or, for that matter, justify the cultural benefits of repeated
kaizen events.
Whether they care for a Byrne-like posture or appreciate the importance of

cultural transformation beyond the CEO’s ubiquitousness like Koenigsaecker
does, rational calculation does speak against a dazzling commitment (Byrne
2013b). Of course, the outcome of calculation depends on who calculates. But as

long as it cannot be firmly established that
(i) A guiding coalition including the board, the CEO, and senior management are
single-mindedly behind a potentially endless development curve where peri-
odic deflections will necessarily happen
(ii) Yet the focus of efforts cannot be allowed to shift from a full-blown transfor-
mation of culture
(iii) While the dependable utilisation of actual tools is no guarantee for anything in
the longer run
(iv) And there is no best practice to copy or fall back on in the most crucial aspects
of the transformation process, that is, unless all these hold fast, kaizen will
never earn its proper place in the leadership mindset. A truly continually
improving company has culture in its axis but to systematically change culture
in the direction of an unassailable CI practice the critical success factors are so
stringent that it effectively dwarfs the number of successful transformations.
Kaizen events in the world, all things considered, produce calculated

losses. Run at procedure/technology/cell and stream/process levels
with strong leadership presence for many years they may open up
room for eventual culture improvement in the direction of CI, but
then to create more values and, indeed, more secure productivity
gains than repeated short-cycle OCM programs kaizen should be
extended to the supply chain/organisation/system level and be locked
in the culture—still, none of the Lean protagonists under review talk
about this higher level kaizen productively (cf. Productivity Press
Community 2005, 2006).
Indeed, Koenigsaecker warns: “The one thing you see missing from most
companies trying to do [Lean] is they don’t build a structure to sustain it. When
you think about it, we are all fighting fires. (. . .) We’re not really driving [our
problems] out structurally, changing our processes” (2014). Jeffrey Liker, likewise,
observed at the heyday of Toyota’s operational expansion in America that “the only
problem [with TPS implementations in the United States] was that in many of the
plants (. . .) TPS never got much farther than the model line” (Liker 1998, p. 6), and
indeed the situation has not much changed ever since.
Learning by doing is fine, no matter how random it may look, as long as
leadership is there. But in order that, leadership notwithstanding, the right culture
ultimately prevail at technology and process levels it should be equally protected
from poor (either insufficient or intrusive) leadership and instrumentalisation by the
object of management, i.e., asset-level standards that while determining the content
of change efforts are also prone to define and limit their cultural horizon (cf. OCM).
Instead, culture should find its interest beyond a given (line of) technology or
processes. And the best culture for a technology is always concentrated at two
levels higher than works stations and technology are, at the level of organisation/
system. Hence my later argument for the asymmetric development of companies
which I shall speak about in ample details as we make progress.
As the analysis above showed the transitory stabilisation of kaizen capabi-

lity ows disproportionately more to direct micro-management by
committed leaders than to anything else including an intermediary cultural
platform.
From this angle leadership coupled with the utilisation of certain Lean principles
as vehicles of transformation (value, stream, flow, pull and perfection for Womack
and Jones; takt, flow, standards, and pull for Byrne) are supposed to select the
required set of tools which when applied to practice will sooner or later lead to a
cultural metamorphosis.
The Japanese authors always point to the mindset of Westerners as technocratic,
tool centered, and neglecting the “philosophy” underlying TPS. It is interesting to
see how Ohno’s original principles (the respect of people and continuous improve-
ment) have given way to a less and less ‘philosophical’ and more instrumental set of
concepts with Womack and Jones (see above, only value and perfection remaining
to represent the “philosophical” mind to some extent) and Byrne (none that could be
qualified as such). This impoverishment of the soft, indeed foundational, side of
TPS in even the best known Lean stories bids us to be cautious about the both the
nature and the sustainability (depth) of these transformations.
Art Byrne professes himself to be a “cat herder in chief”, referring with this to
the complicated nature of “getting all people on the same page” from senior
managers to team leaders and operators (Byrne 2013a, 36 %). But “cat herding”
may not seem to be the right phrase in a parlance respectful of people. It is more like
a phase from the good old “turning of the (s)crew” tradition. More importantly, it
betrays a certain skepticism about the acceptance level that is achievable around
Lean at all. When one reads scorching statements that people “are complicated, and
they can be completely attached to methods of working, even if those methods are
terrible” (ibid., 37 %), the complexity of a Lean transformation is immediately
perceivable.
Indeed, people will stick with their past methods not because they are irrational,
but on the contrary, because they are not. It is primarily rational to stick with a
practice simply to protect one’s way of life and horizon, it is primarily rational to be
afraid of the new, it is primarily rational not to sail out without a compass and a
sturdy boat. It is not that “they all get it wrong”. Byrne and other rationalistic
protagonists of Lean who believe that people are ultimately rational beings capable
of rational calculation may need to have a second look at what rationality really
means, indeed, before they should start ushering in radical and aggressive changes
even in the best of their intentions. It is part of rationality and, maybe not
enlightened but still, of self-interest that people refrain from change but at the
same time they give in to authority. To be sure, they strive to preserve themselves in
both instances. But this also means that whatever seems to be a successful Lean
transformation at one point validated by results may simply evaporate from one day
to another with the mistakes, discreditation, or disappearance of the strong-headed
leader. That is what we always see and that is what Koenigsaecker at least realized
even though he could not validate in his own method.
Again, I do not wish to downplay one of the biggest achievements of Lean in the
Western hemisphere, that is, at Wiremold, or its arch designer, Art Byrne. It would
be futile anyway and certainly beside my point. I am not so much critical of the
achievement itself as of its reproducibility on grounds of the available literature and
method, and this, too, only with the sole intent of laying the bed for a revised, more
transparent approach. And I am quite happy to acknowledge the reason for that:
very bluntly,
I do not think that Lean has been configured in the right way and as such
it does not serve our purposes in the Western context.
And we still see that companies cannot given upon it but press forward, at least
with a bastardized version of it, despite the regular blows that they suffer. Indeed
Lean has acquired a certain halo of reverence underscored by the whole Lean
industry, which makes it increasingly difficult for companies to take distance.
Yet, they cannot wholly embrace it, or a practical, undoubtedly useful version of
it, either, so most of them just get immobile in the squeeze of circumstances,
between ‘as-is’ and ‘ought to’.
I am happy to grant that Byrne is more than aware of the vicissitudes of change.
But that is not the point. The point is that even if he is aware he still promotes Lean,
his idiosyncratic methods notwithstanding. At one time he said: “even a good
organisation will slip backward. If the CEO does not sustain it—make sure he
doesn’t have any backsliders, or is getting rid of them—it dies as well. This is
something that takes years, and at any point in that time frame, you’re subject to
going backward in a big way.” (Productivity Press Community 2005). The question
is hard to avoid after all whether it is not wholly irrational to pursue this course
(Goldratt 2009; cf. Lai et al. 2015 for a more technical argument).
Lean as continuous improvement and respect for the people only can
break down if its hinge on aggressive leadership is not eased by cultural
regeneration. Its transient results, sometimes spectacular, can be pinned
on relatively capable top-down leadership, making the whole approach
slacken at best into a behaviour improvement program; in want of the
(continued)
spread of leadership, however, respect and continuous improvement will

stall, lip service saturate communication, and results will soon start to
stagnate.
Not that Byrne’s or others’ behaviour improvement approach did not make
sense. The following 10-stage roadmap drawing on and consolidating the views
of a number of authors is almost like a golden ruler for this type of transformation:
1. Get a fully committed, capable CEO.

2. The situation is analysed and, unless present anyway, a controlled crisis is
developed to create a sense of urgency in the whole or in a sizable unit of the
company.
3. The CEO builds firm support first at board and senior management levels, then
they jump ahead by stating and communicating their strategy and the core
values.
4. They reduce extra workforce based on the analysis (do not lay off people after
you have started with the reorganisation).
5. They disrupt and radically reorganise the company around value streams
(kaikaku), select value stream and team leaders, with parallel training provided
to them in Lean essentials (advanced value stream mapping is a must) via a
newly created kaizen promotion office, with the involvement of external help if
needed.
6. Deploy (stretch) goals.
7. Launch the first kaizen events with the CEO’s active participation (customer
value, takt, flow, standards, and pull featuring as the principles of transforma-
tion revisited in each sequence of kaizen activities).
8. As a CEO do not get immersed in minuscule details like the configuration and
implementation of tools (SMED, TPM, visual controls), only make sure that
their coherence with the principles above are understood and secured.
9. Sustainment, and conversion from the first radical measures and restructuring
(kaikaku) through kaizen events to the incremental, continuous improvement
(kaizen) stage.
10. Put a growth strategy into effect.
The most critical phases are early on in this multiyear process but final
stabilisation would not come until the last stage is attained. Once reorganisation
is on its way stabilisation and kaizen events should follow suit according to a
structured roadmap in order that throughput will not suffer and transparency is
always ensured. This is something that a Lean book cannot provide. The responsi-
bility, therefore, of experienced leadership is immense, it being the only (hopefully)
knowledgeable source as well as anchor of change in designing and monitoring the
process.
This, as I have pointed out not once, is precisely why leadership, figura-
tively speaking, is the single greatest asset in the change process. Unless
leadership capabilities are built and secured and leadership power
disperses at a relatively advanced level change will not work let alone
stay. At the end of the day, unless stabilised at either system or culture
level, Kaizen falls back to leadership as a convenient but often scarce
power house of motivation and control.
We saw earlier that even the best kaizen protagonists like Byrne and
Koenigsacker cannot prevent this reduction from happening, now it is the time to
see if the kaizen events’ mission to lock improvement can be saved at system level.
Prior to that I would like to intimate here that in any viable change process the
development of leadership capabilities across the organisation is far a more signifi-
cant need than anything else including the “philosophy” or the principles of Lean.
Without leadership the latter have no voice, while without Lean the former can still
devise a proper change protocol (as for the tools, they are just nowhere on the
horizon in importance, cf. Koenigsaecker 2014). This holds true for all transforma-
tion programs looking beyond the first, often dramatic cost reduction steps follow-
ing from abandoning batch production (the kaikaku, or ‘revolutionary’ stage).
Leadership, for better or worse, will ultimately define their practice and singularly
contribute to the development of a company’s putative continuous improvement
(kaizen, or evolutionary) culture. If leadership is poor (weak or intrusive) gradual,
sustainable change will break down or never gain momentum in the first place.
As predicted earlier there is no systematic advice on leadership development in
either Byrne, or Koengisaecker, or Womack and Jones (2010), perhaps the three
most valued reconstructions of lean transformations in the last decade (along with
the work of Jeffrey Liker of whom I shall talk later). Leadership acumen is retained
for the hero CEO and multiplied only with the import of external (preferably
Japanese) consultants—but never advised to get systematically boosted internally.
For the same reason the fate of culture remains tied to the personality of the CEO
and their entourage, will stay largely authoritarian, and an incoming new CEO can
easily wreak havoc to it. In much the same way, although a shift in structure from a
silo-based to a value stream based organisation is considered,2 its successful
interplay with mindset change is taken for granted, which begs the question of
how the dynamics works in real life. Why does the new structure not fall apart
immediately? How exactly does it “drive” behaviours? Or, rather, is it the structure
and not leadership that eventually impacts the behaviours?
2
“Remind yourself that structure drives behaviour” (Byrne 2013a, 34 %).
To the credit of Womack’s and Jones’ contribution it does, if briefly,

address the critical problem, i.e., the succession of the phase of leadership
by that of culture, like this: So, there is a critical transition as you move
your organisation through the lean transformation, a point when
managers must become coaches rather than tyrants and employees
become proactive. This transition is the key to a self-sustaining
organisation.
And please note: if you are the change agent, you may become the biggest problem. We’ve
encountered more than one change agent who wanted to continue to commanding change
from the top when those on the bottom were quite capable of sustaining it on their own. This
can easily become a negative sum situation (Womack and Jones 2010, 58 %).
Reading these lines is somewhat a relief after Byrne’s rather commanding, self-
centred agency or Koenigsaecker’s floating admonition that “building [a] learning
culture can be—and should be—[the change agent’s] legacy” in the organisation
(Koenigsaecker 2009, p. 107). It is precisely here, at the transition point from
leadership to culture, where the previous authors dropped the thread and which
Womack and Jones do not spin either but at least indicate the disconnect. Indeed
none of these books have a deep cultural interest. Rather, all of them are leadership
examples (some of them breeding on many examples and consolidating them) and
the validity of their offers admittedly hold out only as long as larger-than-life hero
CEO’s can be secured for the projects. “Many of the best change agents we’ve
encountered seem to work best by converting an organisation over a period of
several years, then turning senior management over to a more collegial personality,
and moving on to another firm still full of ‘concrete heads’” (Womack and Jones,
ibid.).
CEO’s and change agents with an ability to break “concrete heads” are certainly
swarming in the best of our (Western) Lean literature, which simply cautions
against the accepted best practice in the eyes of most traditional companies still
undecided on a Lean journey. Companies that in their own self-appraisal do not
need big egos building their own statutes but rather craftsmen working together
with others on an artifice of shared value may find their reservations justified when
reading the sources on our table.
More importantly, the blocking of cultural development by these mighty

leaders is telltale of a failed approach to sustained improvement. When
neither a CI-able culture nor a management system to leverage cultural
integration is left behind as an unassailable result of many years of hard
work one has all the rights to be suspicious about their contribution to
industrial continuous improvement proper.
Wobbling leadership advice of descriptive value drawing on the inscrutable

quality of a leader, no systemic and cultural integration of improvement
capabilities—well, our sources have little added value as far as reproducibility
goes. As it turns out that the motor of continuous improvement, leadership in this
case, has not been systemically integrated with everyday practice and culture, and
the latter do not constitute the platform of improvement, only maybe a semaphore
alongside it, and it is the CEO’s personality that is both the platform and the engine
driver, then one starts to feel it may be the right time to start looking for an
alternative method. Because a method we need, irrespective of our reverence for
the great results.
Nevertheless, I am sure, and in fact I happen to know, that no matter which
organisation we would pick, whether it would be Wiremold, Ford, Danaher,
HON/HNI, Porsche, NOK-Freudenberg, Parker Hannifin, Delphi, or other
examples put forward in various sources, management systems are there and
cultures of some quality have taken roots. But systems and culture still do not
form a constitutive part of the chronicles. They come as adds-on at best qua the
golden nugget of stabilisation and sustainment, but stabilisation and sustainment
still of asset-focused changes.3 It is certainly not (only) their own accomplishments
that the chroniclers wanted to give account of but, sadly, this is how it turned out.
After a careful analysis of their contribution we must believe as though leadership
and kaizen events could be substitutes for system and culture—but, unfortunately,
they cannot. In fact, if we do not acknowledge their incapacity to create the impetus
for systems and culture, leadership itself will sooner of later break down in each
particular instance of change and great heritages of passion and good results
amassed in the course of transformation processes can be easily squandered. As
our story line goes what is most deplorable about this fact is that for all the
attractivity of the 10-stage model reconstructed above our sources demonstrate a
structural problem marring the model’s very mission, the problem of the transitory
nature of its impact. And, if this structural problem is a reality, then the 10-stage
model is in serious need of correction.
Let me nail down, in conclusion, the two chief concerns I have with the accounts
given of Lean transformations so far.
First, although as a force of change leadership is a must, when it falls short

of system building and cultural development, and a consecutive spread of
leadership capability and power across the organisation does not happen
while progress is being made in the inculcation of lean principles and tool
(continued)
3
Cf. the most extensive roadmap of change by Michael Heidingsfelder http://www.industryweek.
com/companies-amp-executives/18-keys-operational-excellence and its distancing from
Deming’s 14 principles (Deming 1982). Also https://web.archive.org/web/20080311021515/
http://www.deming.org/theman/articles/articles_gbnf04.html
3.2 Facets of Behaviour Improvement via Management Systems 37
usage, leadership may quickly become dysfunctional, arrant, and indeed

harmful of continuous improvement. Second, that by putting very concrete
leadership accomplishments into the forefront, the accounts’ heuristic
value became limited to description, just too meagre to call whatever
was intended a method.
3.2 Facets of Behaviour Improvement via Management

Systems
To make the required corrections both in the change concept and in its representa-
tion, that is, both at the management and at the scientific levels, let me get beyond
our authors and expand a little more on the confrontation of the Toyota heritage
with the American operations culture by looking at examples of the utilisation of
leadership in the interest of system and culture building.
According to the summary provided by Jeffrey Liker, the Ford Production
System of the late twentieth century, inspired by TPS, was consolidated on the
following core principles, all associated with relevant metrics: effective work
groups, zero waste/zero defects, the alignment of capacity with market demand,
optimization of production throughput, total cost mindset to drive performance
(cf. Boyer and Freyssenet 2002).
Now, if we compare all this with Ohno’s principles (respect of people and
continuous improvement), indeed with the principles of the more kaizen oriented
Byrne and Koenigsaecker above, the difference in tone is unmistakable. The reader
might be struck by the un-principle-likeness of the principles, perhaps also by their
uninspiring nature, and certainly by their heavy focus on control and behaviour
management. To call, e.g., production throughput optimization a principle is telltale
of a somewhat arid imagination in a still rather competitive area of mindsets. (More
recently Takehiko Harada has brought home Ohno’s message in repositioning
kaizen and respect for the people mainly for Western practioners, cf. Harada 2015.)
Also, what is most critical about the associated metrics, says Liker, “is that they
drive behaviours” consistent with the system (Liker 1998, p. 22). The system
designers seemed to know what type of behaviours to elicit, hence the multiple
measures, to mention only a few, of first time through capability, total dock-to-dock
time, and OEE, as the metrics of zero waste, capacity alignment, and optimized
production throughput, respectively. In the brave old world of the Ford Motor
Company systems and measurements will drive performance, not only measure it,
and this is just as good as it gets.
At the time of the writing of this book, Liker says, Ford was only at the
beginning of its “Lean journey” that later turned out to be bleeding in many respects
and finally constrained the Ford board to bring in a new CEO in 2006. The
traditional command-and-control culture of the Ford C-suite, exemplified in the
numbers-clogged, behavioural management approach above, downplayed the seeds
of a culture that could have been fermentive of Lean’s integrative, team-oriented

nature, and pushed the car manufacturer into a crisis well before the 2008 fall.
What happened since then, effectively during the tenure of CEO Alan Mulally,
in a gradual transition toward what I call here a “controlled Lean” environment, is
hardly attainable however from the Ford corporate website, yet.
The Ford Production System (FPS) is a continuously improving, lean, flexible and disci-
plined common global production system that encompasses a set of principles and pro-
cesses to drive a lean manufacturing environment. Key elements of the system include
effective work groups, zero waste/zero defects, aligning global capacity with global market
demand, optimizing production throughput, and using total cost to drive performance.
Each principle has a set of guidelines, or “measurable,” that help us to meet or exceed
objectives. The measurables are deployed and tracked for every manufacturing location
using the SQDCPME Scorecard, which keeps focus on the vital components of a sustain-
able business: Safety, Quality, Delivery, Cost, People, Maintenance and Environment.
Many processes have been put into place to support the FPS and the Scorecard,
including SQDCPME metrics, internal process confirmations and FPS Best Practices.
The Scorecard is reviewed regularly by management, and progress against SQDCPME
targets is a factor in the performance reviews of all managers in the manufacturing chain of
command, from site-level managers to Ford’s CEO. Each Manufacturing employee has an
annual performance review that is based on objectives that are derived from the Scorecard.
Manufacturing’s Scorecard objectives are cascaded through each organisation down to the
plant floor-level employee at the beginning of each year, to create alignment on objectives
and measures of performance throughout the Manufacturing organisation (Ford 2014).
It all still speaks for itself. Goals, objectives, and targets drive behaviours, with
results measured by a complex KPI-system. Obviously, whether this setup is truly
“Lean” is a different story but the management philosophy is evidently not rooted in
kaizen events or in the Toyota principles promulgated by Ohno. Ford’s own
heritage may not allow or, indeed, may not demand in the first place a full
conversion to TPS principles, and the company appears to remain perhaps the
most powerful stronghold of a semi-converted, controlled automotive environment
in competition of the Toyota Way.
Ford’s margins are still lower than those of Toyota4 as is the empowerment of its
workers (no causality implied), the performance of its stocks has been stagnating
over the last 5 years and falls very significantly behind that of the Toyota Motor
Corporation (up to about ¥8200 in July/August 2015 from about ¥3000 in
mid-2010, and steadily rising in the last 3 years). It is, however, successfully
competing on quality and reliability (especially after the significant blows that
Toyota suffered over the last decade), and is at least a viable alternative as far as
the stability of its operational system goes. Recent news about possible collabora-
tion between the two companies5 also reinforces Ford’s improving image.
The thrust of Ford’s culture is far from unambiguous, however. Indeed there is
no such thing as could commonly be called the “Ford culture”, not yet, at least.
Mulally achieved a lot by transforming a “short-sighted, cutthroat, careerist culture
4
https://finance.yahoo.com/q/co?s¼TM+Competitors
5
http://fortune.com/2015/06/03/fords-tech-might-end-up-in-your-toyota/
into a model of collaboration and efficiency”, but the One Ford culture is still in the
making and by any standard this will remain so for many years to come. What is
obvious, however, is that where Mulally’s plan was the most ambitious, to “come
together as a team” (his other two tenets were to leverage Ford’s global assets and to
build cars and trucks “that people wanted and valued”), was also the one that Ford
needed the worst to take on Toyota.6 And this is also the one where the corrosive
practice of “petty rivalries, bickering and factionalism” may creep back the easiest.
Ford has not yet reached a point of no return, i.e., to the outdated, harmful practice
of the past, and the current CEO Mark Fields has to show a stamina equal to
Mulally’s own to carry on, truly heeding Peter Drucker’s dictum said to be once
posted in his war room that “Culture eats strategy for breakfast”.7
He seems to be aware though. Quoting him in an interview: “For much of my
career, our corporate culture was described as rough even brutal,” Fields said. “You
didn’t question the boss. You didn’t bring in bad news. And you better not miss
your numbers. Squabbling and rivalries were standard business. [Chairman of Ford]
Bill Ford once commented that Ford’s C-suite was more rife with intrigue than
czarist Russia.” Fields also had a front-row seat to the efforts of Bill Ford and
former CEO Alan Mulally to reverse that culture to one where people were
encouraged to speak up and solve problems collectively. “It’s amazing what
happens when this culture of positive leadership takes root in an organisation. It’s
infectious, and it’s energizing” (Priddle 2014).
The One Ford enterprise integration project has indeed retained its significance
up to this point that it earned under Mulally. “We didn’t expect dramatic changes,
and there haven’t been dramatic changes,” [Ford executive] Hinrichs said. “Mark
[Fields] was very clear that the first, most important thing was accelerating the One
Ford plan. That continuation of the One Ford plan is so important to us and our
business. The processes that we have, the meeting cadence, the processes we use in
creating the value road map, business plan processes—none of these have changed.
They’re all core to how we run the business” (Bunkley 2015).
“We’re poised for a breakthrough year for our company,” Fields told
shareholders at Ford’s annual meeting in May, according to Bloomberg. “We
expect our results will grow progressively stronger, mainly in the second half, as
the new products that we’ve been launching start to really pay off.” In justification
of the expectations Ford posted very strong second quarter results in 2015,8 pre-tax
profit soaring to $2.9 billion, net income to $1.9 billion (reflective of a nimble
increase in the global industrial market share, up 0.1 %). Its transparent strategy of
further enhancing One Ford as the platform of operational excellence,
6
Cf. http://www.autonews.com/article/20140505/OEM02/305059951/fields:-ford-cant-slip--to-
reverse
7
On Fields’ understanding on his business see http://www.theverge.com/2015/5/1/8525073/ford-
ceo-mark-fields-interview, on the direction of his leadership http://www.autonews.com/article/
20150614/OEM02/306159971/after-smooth-1st-year-fords-fields-faces-breakthrough-challenge
8
http://corporate.ford.com/investors/reports-and-filings/quarterly-reports.html#/2015
strengthening product excellence, and become permeated by a thoroughly innova-

tive (“tech”) spirit is also inspiring and appears to be adequately competitive if only
in the heels of the industry leaders in general and Toyota in particular.
The critical question is still if Ford can expand on its top-down efforts of cultural
integration and consolidate them at the points of execution of the 187,000 people
organisation. You do not hear much about either kaizen or continuous improvement
at Ford, certainly much less than about the One Ford—One Team concept which is
nice and reassuring but not enough. Cultural integration is not the same as a CI
culture and the latter cannot be warranted until team and individual CI capabilities
earned through conscious and systemic efforts in the first line get into the focus of
operational growth. This has not happened, yet, with Ford. Whether or not the
executive branch will be in the position at the closing of 2015, nicknamed the
“breakthrough year”, to find justification for a real breakthrough, the long-term
operational competitiveness of Ford is still on shaky grounds. The command-and-
control culture is very much around, the One Ford concept falls nothing short of
reinforcing it, and while it may have driven a successful transformation effort up to
this point it needs further alacrity and additional ingenuity to find a way to increased
self-reflection—and to CI as a result.
Ford’s long and productive journey over the last two decades, basically, since
the expansion of the Ford Production System in the second half of the 1990s, cannot
save it from confronting the limits of its current culture. What is by all means the
most critical phase in transformations whether leadership can make an organisation
adopt autonomous continuous improvement capabilities and then nurture them
without either suffocating or cutting loose of them, has not yet been addressed at
Ford. Indeed the company’s traditional culture, as much as it can be judged from the
outside, still works against such an adoption curve. Even the formulation of the
problem is missing from the company documents, nor is it present in the not too
bulky management literature on the Ford of the twenty-first century.
The main carrier of the critical phase, a leadership-mentored evolution of

systemic CI capabilities where culture surges ahead amid the meeting of
leadership on the one hand and system and tech/process-level CI practice
on the other, is simply not on top of the agenda.
Ford has a very old, but extremely diverse manufacturing culture (each plant
with its own DNA, so to say) which evidently the One Ford program has, in the
footsteps of FPS, been striving to address and mould. While the company has
historical successes with a fully team-based management culture in the Romeo
Engine Plant, the stamping and assembly sites have been staunch internal
adversaries of a company-wide turn toward team-based (sociotechnical, or reflec-
tive) work-systems and always opted for Lean (Kochan et al. 1986, 1997; Cutcher-
Gershenfeld et al. 2015, p. 117ff; Clarke 2005, p. 111ff; Shimokawa et al. 1994;
Bellgran and Säfsten 2010; Bicheno and Hollweg 2009, p. 186ff). In fact, as the
varieties of sociotechnical systems (STS), while allowing for considerable team

autonomy, are constrained to keep high work-in-process to balance the
asynchronicity arising from semi-autonomous decision making, the Romeo experi-
ment was in contradiction with Lean (Ford’s CIGW) and small-batch flow from
very early on. [Hence I do not dedicate a full chapter to Volvo where STS was
pioneered qua Reflective Production System. Cf. Shimokawa et al. (1994), Stewart
(1996), Durand et al. (1999), Clarke (2005) and Bellgran and Säfsten (2010),
Netland and Aspelund (2013). Briefly, the story of Volvo’s Kalmar and Uddevala
plant experiments proved how openness, to random innovation and buy-in in
particular, without developing a systemic cultural transformation capability can
result in backtracking and in almost Fordist retrenchment.]
As much as, in fact, FPS had never been too successful in its thrust for integra-
tion, neither was Mulally’s One Ford umbrella. FTP, work group development, and
CI, in consequence, remained the pet program of the central command. The deep
divide between Powertrain and Vehicle was not healed, and together with the plant-
to-plant variations this further triggered the executive branch to keep the initiative
for itself. Work groups were created from above, their mission was determined with
an eye on the global manufacturing strategy, and CI was heavily instrumentalised to
deliver on standards. The operational alignment program (Cutcher-Gershenfeld
et al. 2015, p. 153ff; Babson 1996) was top-down as anything, not the least because
of continuing trade union (United Automobile Workers, UAW) influence on the
power structures. For better or worse, efficiency became an official UAW-mentored
undertaking, and what originally seemed to be a productive idea at the Romeo
Engine Plant, and reappearing in Wayne, Hermosillo, and Flat Rock, to connect
work group autonomy (rights) with the utilisation of frontline knowledge for CI
(obligations), might at present still (i) crack under the double weight of executive
and trade union power, or, quite the contrary, (ii) turn against the consolidation of
process improvement in the Lean genre at system level. The entrenched silo culture
of Ford has made no real progress in finding the ways to true oneness and may well
seem to be floundering in the unresolved contradictions of traditions, internal power
struggles, and external challenges. In no way does Ford show a consolidated
progress in cultural change that could make the latter a carrier of CI. While at
Volvo it was the lack of the system in reflection, at Ford it is the exuberance of
entrenched traditions that undercut the evolution of the CI culture.
Listen to how Alan Mulally explains the essence of Ford culture in a recent
interview with McKinsey: “At the heart of our culture is the One Ford plan, which is
essentially our vision for the organization and its mission. And at the heart of the
One Ford plan is the phrase “One Team.” Those are more than just words. We really
expect our colleagues to model certain behaviours. People here really are
committed to the enterprise and to each other. They are working for more than
themselves. We are a global company, so we really have to stay focused on the
work. There are so many people around the world involved in our daily operations
that it has to be about more than a single person—it truly has to be about the
business. Some prefer to work in a different way. Ultimately, they will either adopt
the Ford culture, or they will leave” (Kirkland 2013).
It is somewhat intimidating at the first sight to summarise the ethics of the One Ford
transformation in the “take it or leave it” style especially if we keep referring to a culture
which is at best a long shot. The wishful (and sufficiently callous) thinking typical of
C-suites is tangible in further remarks over the same interview. “One of the biggest
parts of the leader’s job is reinforcing the processes we are using to meet our goals.
Again, that is where the BPR [Business Plan Review—Ford’s weekly global leadership
meeting] comes in. It is more than a way of asking, ‘How are we doing?’ It is asking,
‘How are we doing against the plan?’” In an unmistakably different tone than that of
Toyota Mulally is very forthcoming in his affirmation of the command-and-control and
behaviour management type of leadership. “A big part of leadership is being authentic
to who you are, thinking about what you really believe in and behaving accordingly. At
Ford, we have a card with our business plan on one side and the behaviours we expect
listed on the other. It is the result of 43 years of doing this.” So, in essence, nothing has
changed over the decades except that people over there try to do it more systematically
by bringing in tools and experiences from the outside. The basic precepts remain.
What Mulally effectively did however and did well was to bring honesty and
transparency back to the organisation from the board to the shop floors. [For a brief
eulogy see Giannoni (2014), for a comprehensive one Hoffmann (2012).] He cut
across diplomatic and professional smoke, brought a compelling vision and ambi-
tious goals, cleared the company for effective policy deployment, weeded out big
waste, and stabilised the supply chain around quality.9 “To create a culture around
such a mantra, Mulally and his team went back to the basics.” But then there is still
a lot to do about the basics.
In contrast with the kaizen event-based transformation efforts in which leader-
ship is oriented at individual kaizen events (Wiremold, Danaher etc.), leadership at
Ford teamed up with the command-and-control pattern of traditional thinking to
create ultimately the (Ford) culture that is old and—rooted in Deming’s quality
program—still nascent at the same time (Cutcher-Gershenfeld et al. 2015; Garcia
et al. 2013). Yet, we just do not know where with its fluid culture Ford is heading to
find its platform of continuous improvement.
Others of the command-and-control and behaviour management tradition obvi-
ously fare much worse than Ford. The majority of change efforts we have had the
opportunity to study do not even get close to this stage of critical leap from
leadership to CI culture, suffering from a lot of more fundamental deficiencies
like tool-fetishism, poor kaizen capability, the lack of operational strategy, and the
lack of leadership in the first place (Liker 1998).
The lesson, all in all, is that the ultimate test of leadership, its ability to
spread across the organisation, cannot happen without a system and
local kaizen practice taking roots at the same time. It is in fact the acid
test of CEO skills whether this spread begins to happen.
9
http://www.thestreet.com/story/1543980/1/for-mulally-fords-culture-is-job-one.html
3.3 The TPS Spin-Offs 43
3.3 The TPS Spin-Offs
Please note the interest of this book is solely in management and in the structural
analysis of the leverages of rivalling management systems. But before turning to the
analysis of the world’s current best business system please note the immense
competition among operations management platforms worldwide. Toyota in
North America is on a par with major competitors in efficiency measured by
employee-hours per vehicle despite the fact that its manufacturing philosophy is
widely different from those of the native American companies, that of the German
VW, or of other Japanese firms. The overall competition, however, is not among
manufacturing facilities but among supply chains. Plants have been and will be
closed even if their individual efficiency is outperforming others once higher level
interests so dictate.10 Moreover, manufacturing efficiency has also to do with
numerous other factors beyond the operations system, e.g., the manufacturability
of particular cars, market and sales performance with direct impact on asset
utilisation, the geographic location of a site etc. Just recently, we have seen that
Toyota is revamping its manufacturing process (at technological level) following
the steps of Volkswagen, which step is seen by some sources as “a reversal for the
Japanese pioneer” of production systems.11 Toyota finds increasing value in
co-operations with Ford, VW, while also opening its supplier base to Tier 1 vendors
from different operational cultures such as the German Continental group. This is a
proof not only of further globalisation in the automotive sector but also of the
parties’ ability to better align their processes as they have been closing the gaps in
operational cultures over the last years, especially since 2008/2009. Technological
advances first in the IT and microelectronics industries have increased the appetite
for technology sharing which then extend to fuel systems and production platforms
like Volkswagen’s so-called MQB (the German acronym for Modular Transverse
Matrix, featuring a far greater degree of plug-and-play modularity, flexibility and
parts commonality than at Toyota, GM, Ford, and other competitors).12 Setting
specifications for the basic underpinning of a vehicle and for attaching components
from brakes and powertrains to engines VW “will manufacture different brands and
models with great flexibility on one production line,” says VW chief Martin
Winterkorn. This is a huge leap forward allowing a saving of “up to 30 % of the
upfront development costs of a new vehicle” along with reduced setup costs on
manufacturing lines and, robotization included, bigger efficiency virtually at all
points of the supply chain.13
While technology is driving manufacturing efficiency to new levels let us not
forget that behind all these advances the principles remain the same: just-in-time
delivery, shorter lead times, flow, and pull. All the technical level principles of TPS.
10
http://general-motors.blogspot.com.au/2006/06/efficient-auto-factories-arent-spared.html
11
http://www.wsj.com/articles/toyota-unveils-revamped-manufacturing-process-1427371432
12
http://www.cnbc.com/id/100449231
13
ibid.
Therefore I allow myself the liberty to call all TPS-modelled operations systems
TPS spin-offs (or, in line with the industrial jargon, XPS’s) insofar as their
underlying concept, their core technical principles, and most of the tools of their
value creating processes originate at Toyota and some admittedly copy Toyota in
their thrust for systemic kaizen. (I hold in brackets the fact that Toyota itself seized
upon Ford and on the American military’s Training Within Industry service in
developing flow and multiskilling, respectively.)
While dispensing with three improvement philosophies so far (OCM, kaizen
events, and behaviour management) from the point of view of their structural
coherence and their consecutive ability to serve continuous improvement, effi-
ciency has always been at least one of the measurables we kept in mind. The
question, as throughout the book, is whether TPS and its more or less authentic
spin-offs serve the purpose of CI better than a Wiremold, or a Ford. Even more
accurately, the question is if TPS and the TPS spin-offs are structurally more
capable of better performance, whether or not this capability is finally realized.
Let us remind ourselves in the meanwhile that Lean is far from being a success story
in the West, or, for that matter, globally, and the true TPS principles of respect for
the people and continuous improvement have taken at best superficial roots in Lean
branded transformations.
The differentiating specifics of TPS defined as respect for the people and
continuous improvement imply at Toyota a learning environment founded on
systemic kaizen and assisted by a variety of purposeful tools. Contrary to the
previous examples of alternative approaches TPS is wholly rooted in a wisdom or
“philosophy” going back to Japanese societal, cultural, and religious traditions, thus
we cannot be surprised if the fundamentals of TPS lie deeper than those of any
current Western concepts of improvement, they being equally groundless philo-
sophically and mindless culturally. Indeed, while the principles of TPS are philo-
sophical in nature and culturally predetermined outside the organised world, the
TPS spin-offs are very technical in comparison, their principles are incomparably
more shallow, and their grasp of what a business culture should mean is signifi-
cantly less totalistic. Hence their instability and their short-term, instrumental
concept of change.
TPS spin-offs will necessarily be more constrained to manufacture beha-

viours than the Toyota Way where the adequate human resource is more
readily available.
TPS spin-offs still make up a category of their own because they are
systemic in their ambition (as opposed to kaizen events-based transfor-
mation processes) and retain at least the core learning of the Toyota Way
about value, flow, pull, leveling, and autonomous kaizen (unlike
top-down, controlled Lean environments where Lean does not permeate
the company culture and is mostly restricted to a tool-box vision while,
(continued)
most characteristically, kaizen is led from above by dedicated kaizen

teams rather than in autonomous groups). The crux of the matter is,
again, the presence or absence of ambitions for systemic autonomous
kaizen. A TPS spin-off (or XPS) can be so named as long as this complex
ambition is present.
Based on recent research there are two lines of critique that I will follow here.
The first is based on the fragmented nature of CI at such formidable competitors of
Toyota as VW, with the latter’s core CI potential still placed on its technological
advances; the second is that US-based Toyota companies are still falling behind
Toyota manufacturing on Japanese soils due to repercussions from the
non-systemic introduction of TPS to the American business culture. This latter
argument will be withheld until the chapter following this one where TPS will be
discussed in more details.
As for the fragmented nature of spin-off CI’s we can work backwards from the
new technology platform at Volkswagen based on increased modularity and unity
in part utilisation. While some say that MQB (along with MPB, or modular
production) is likely to be as influential as Ford’s adaptation of standardized
parts, GM’s “ladder” of brands and Toyota’s streamlined production system,14 it
is still a technological platform only, a decisive but not constitutive notion within
the CI context, whose overall impact on performance or on the QCD (Quality, Cost,
Delivery) capability of the VW supply chain is yet to be seen. From a conservative
CI angle this change is more a kaikaku (radical, revolutionary) motion whose
strategic claims are just too far out to conveniently discuss at this point of time,
underscoring nevertheless the dangers always coming with innovations and bold
technological advances that lead out from an existing human system.15 The new
system has helped standardize production lines and enabled high levels of automa-
tion at plants. “In Wolfsburg, Volkswagen increased the number of robots in the
body assembly process by about 20 % to 1800 when it started mass-producing the
latest Golf model in 2012. The company is installing more robots and plans to
produce new models based on MQB” (Yamazaki 2015).
At the same time while VW is aggressively pushing to overtake Toyota as the
world’s number one car maker it runs into feuds at board level,16 occasional
productivity loss on the shop floor,17 discontent among trade unions,18 setback on
14
http://www.cnbc.com/id/100449231
15
http://www.volkswagenag.com/content/vwcorp/content/en/investor_relations/Warum_
Volkswagen/MQB.html
16
http://www.autoblog.com/2014/08/04/vw-macht-quits-mqb-platform-problems/
17
http://www.reuters.com/article/2014/09/24/us-volkswagen-mqb-insight-idUSKCN0HJ0WL20140924
18
http://www.labornotes.org/2015/03/volkswagen-tennessee-productivitys-price
its strategic Chinese market,19 and most recently into an integrity crisis that has
pushed company stocks to a 5-year low.20 Revolutionary (and costly) changes in
operations are neither guarantee for nor indication of operational excellence.
Critique is flooding from various outside sources, too. “[T]he platform can cause
serious difficulties in the wrong environment. Rather than making it easy to build
VW’s sprawling array of models, it has caused delays and forced overtime on some
assembly lines, say company sources and production staff. The MQB problems
have been caused by or have fed—it depends on who you talk to—increasingly
tense relations between workers and management.”(ibid.)
“VW’s size is turning into a curse,” said Stefan Bratzel, head of the Center of
Automotive Management think-tank near Cologne. “Costs are beginning to get out
of hand, inefficiencies keep growing and troubles are looming into focus around the
world.” (ibid.)
“Carmakers once thought that automation could rescue Germany as a location of
industry,” Mercedes-Benz production chief Markus Schaefer told Reuters. “But
with an individualized product like what we’re offering, automation is hitting its
limits.” (ibid.)
A Sanford C. Bernstein research warned earlier that Volkswagen’s “much touted
and hugely expensive new modular production setup had been oversold and would
not bring big benefits to the bottom line”.21 Expecting MQB/MPB to sell more cars
is truly frivolous but that is how the platform has been sold in the automotive
community. Slashing costs might turn out to be a valid expectation after all—
modularity and the radical reduction of part mix are healthy ideas in circumstances
when the profusion of brands is likely to remain—product lead times might shrink
as a result of increased flexibility under MPB, but the system will put extra burden
on supply and inventory management (and extra cost on suppliers with declining
delivery accuracy), while the aggressive growth plans associated with the technol-
ogy overhaul puts VW in a potentially risky position as far as manufacturing and
product quality is concerned. (VW’s quality ratings in America have remained
consistently below average, according to surveys by J.D. Power.) It is worth
mentioning at the same time that Volkswagen is not alone in the modular “revolu-
tion”, the rest of the pack including Toyota with its TNGA (Toyota New Global
Architecture), Nissan-Renault, Fonda, Hyundai, GM, and certainly Ford are fol-
lowing closely, and as usual, the pioneer’s technological advantage is expected to
wane quickly.22
In an interview with Roland Berger Strategy Consultants Hubert Watl, a senior
manager at VW, did not beat about the bush: “Quite simply, we want to establish
19
http://www.bloomberg.com/news/articles/2015-07-19/volkswagen-china-sales-decline-for-
first-time-since-2005
20
http://www.marketwatch.com/investing/stock/vow?countrycode¼xe
21
http://www.wintonsworld.com/vw-can-forget-big-profit-gains-from-new-production-system/
22
http://www.japantimes.co.jp/news/2014/09/06/business/automakers-may-miss-boat-
modularization/#.VcMN3fmN23F
the most powerful and fascinating car production system in the world by systemati-
cally generating synergies and developing as many standard elements as possi-
ble.”23 At this point of time, however, what we have on the human side is a
significant gap in the perceptions of reality in the first place. Senior management
might radiate of self-confidence with “responsibility (. . .) clearly assigned to
specific individuals, (. . .) both strategic and quantitative goals (. . .) realistic,
accepted, measurable and motivational”, but we hear a different story from the
shop floor. Some perceptions of Lean in VW’s Chattanooga plant (USA) are that
“efficient ruthlessness” prevails, “workers are routinely pushed to their physical and
emotional breaking points. From management’s point of view, this maximizes
productivity,” but happiness does not prevail in all the quarters of the company
(Ebersole n/a; Brooks 2015). Nor does MQB/MPB seem to be such that will help
overcome this perception.
It is not that I would like to voice my opinion on a distant debate or on a platform
still in a fairly early stage of its evolution and at least worthy of interest; what I say
is that the rosy picture of a big turnaround initiative is not confirmed in all sources.
And while I also know it would be foolish to expect unequivocality, the voices of
dissent are certainly a robust indication of the well-known problems of motivation,
the lack of behavioural alignment, and of the failing chances of ingrained, deep-
seated continuous improvement capabilities that no technological ramp-up will
ever make good. Indeed, modularity and the concomitant changes in operations
management in the global automotive sector will not degrade a bit the significance
of CI as the ultimate operational strategy. And with the technological competences
distributed fairly evenly across all industries, not just car manufacturers, company
cultures rooted in leadership and CI will still remain the best bets in operational
excellence.
TPS spin-offs, in lack of an underlying firm philosophy, are more inclined to
make the mistake of giving in to asset management and technological innovations
(and huge, profit marring investments) enticing them away and eventually cutting
them off from their own people. Their leadership momentum may also fade and
instrumental management overwhelm by digging deeper in the organisation. VW
especially is inflicted by a very tight circle of powerful leaders, which augments the
traditional top-down monoculture of the automotive giant and does not help quick,
knowledgeable reactions at lower levels. While the most recent plans to overhaul
the structure suggest decentralization,24 much more is needed for potentially lasting
culture changes to take off. As for Piëch’s legacy, powerful leaders with big ideas
might create great things—Gottlieb Daimler, Henry Ford, or Kiichiro Toyoda are
handy examples—but there is no guarantee for avoiding huge flops either. VW is on
a dangerous growth path that appeals to the automotive world at this point of time
23
https://www.rolandberger.com/media/pdf/Roland_Berger_COO_Insights_Volatility_
20120814.pdf
24
http://www.autoexpress.co.uk/volkswagen/91836/vw-group-to-split-into-four-holding-
companies
but the risks are many and some of them are not even on the horizon. (Again VW’s
current emission rigging scandal is a point in case here, justifying my call for
putting operational excellence back to where it used to belong, i.e., in the realm of
“morality in time.”25) This is certainly not an improvement curve in the TPS genre.
Clearly, while the biggest resource for Toyota is its CI culture rooted in a human
system, this resource for VW is its technology, a staggering competition not only of
the first two companies of the sector—with VW outselling Toyota for the first time
and taking the top position according to 2015 first half year’s numbers—but also of
two philosophies and cultures.
The choice of technology as the single most important leverage of performance
is not only dictated by the German industrial tradition26 but also by VW’s global
expansion to the emerging markets which is easier and faster to manage on the basis
of technology standards than by reshaping and empowering local company cultures.
“People are trouble but machines obey.”27 To design, deploy, and kick in a system
of technology is a vast undertaking but it is still nowhere to setting up a working
kaizen system. Changing a technology does not even come close to the changing of
mindsets what regards complexity and timeline.
Toyota’s slower expansion rate outside Japan and especially in the emerging
markets is balanced with a more robust enterprise culture that may be less capable
of managing a sudden throughput growth but is certainly more resilient to common
market volatility and much more efficient at process level. (It is the former where its
modular system can help VW, while the company has also launched a major cost
cutting program to, a step familiar from the OCM mindset, address the efficiency
gap. What they certainly need to. According to the Center for Automotive Research
Volkswagen earned only $540 before interests and taxes per vehicle in the year
2014 when Toyota earned $1647, while the operating profit margins show a better
picture with 9.6–6.3 % but the gap is still a considerable one.28 Cost cutting, quite
characteristically, is still expected from programs rather than a pervasive anti-waste
mindset.)
We are yet to see how VW will transform its management systems and culture to
cope with new technological advances on its shop floors, or, in other words, to see if
the utilisation of the new product lines will be at least as high as that of the earlier
technology.
25
http://www.theguardian.com/business/2015/sep/22/vw-scandal-caused-nearly-1m-tonnes-of-
extra-pollution-analysis-shows
26
Let’s not forget that Germany’s auto industry has long been in the forefront of combining new
technologies with jog redesign based on work groups. Cf. “Introduction” (Kochan et al. 1997).
27
Headline from the The Engineer, 14th September 1978.
28
https://global.handelsblatt.com/edition/211/ressort/companies-markets/article/vw-volkswagen-
herbert-diess-bmw
Until then this TPS spin-off will remain in a traditional limbo between its
expensive engineering mindset and aggressive ambitions. In this stub-
born divide it is technology that has always taken the lead, formed the
production mindset, and posed challenges to management. Technology
has been pulling culture but also subduing it.
Anyone walking in any VW factory, especially in the newer ones, could hardly
help sensing the power of technology over people. “Vorschprung durch Technik”
(roughly “Progress through technology”) is the marketing slogan for Audi, a VW
company, and it is so well said! At service of the engineer-tuned technology it is
almost as though cycle times were commanding the operators’ heart beat, and when
looking more closely you could easily imagine people as elongated parts of pieces
of technology, robots, conveyor belts, assembly points. Coupled with complicated
ERP systems that collect and analyse massive quantities of data physical and virtual
controls over people have taken the place of leadership. What you could also call
“management without a human touch” is an unmistakable mark of VW that neither
allows for floor-level leadership nor expects just anybody to think and improve the
productive environment (cf. Scarbrough and Corbett 2013). Leadership is mostly
reduced to management (by objectives, making sure that the numbers are met, and
by technology), improvement is a dedicated job for process engineers, while not
much beyond standard work is kept for the operators.
In such an environment Lean might easily be perceived as a brutal productivity-
maximizing management scheme. “That’s lean production in a nutshell: ruthless
efficiency, produced by a system of efficient ruthlessness. Workers are deliberately
stretched to their limits, by a combination of competitive pressure, inadequate training,
repetitive stress, and rotating shifts—so that the weakest links can be identified and
eliminated. Another central component is the ‘team model.’ Plant workers are grouped
into teams of six and expected to work with management to continually find new ways
to increase their team’s productivity [i.e., against standards]. The ‘team’ aspect
encourages peer pressure. Much of the onsite training falls informally to team leaders
or other assembly line workers—already overburdened by their own workloads.
‘Assembly line work is very nuanced and complicated,’ says one VW team leader
(. . .). ‘It has to be practiced to be understood.’ When a worker who hasn’t been
properly trained is pushed to pick up the pace, the results can be catastrophic.”29
Opinions through workers’ on-line sites or Glassdoor (www.glassdoor.com) are
easily available to anybody to learn more about workplace conflicts and complaints
concerning not only VW but obviously almost any known corporations. These
opinions are only opinions but when they swarm in large quantity they serve with
a good fact checking opportunity after having listened to corporate executives or
heard out the success stories of Lean consultants. Apart from pulling the rug from
29
http://www.labornotes.org/2015/03/volkswagen-tennessee-productivitys-price
under the myth of shared sentiments around Lean they are also in tune with a host of
scholarly work (Rinehart et al. 1997; Babson 1995; Kochan et al. 1997) cautioning
against the alleged motivational power of Lean. “At the core of these debates [about
Lean] lie employment practices: the way work is organised, how workers and
managers interact, the way worker representatives respond to lean production
strategies (the auto industry being one of the most unionized in the world), and
the nature of the adaptation and the innovation process itself.” (Kochan et al. 1997,
p. 4). “Leannes” by Kochan and his colleagues is defined the same way as almost
anywhere in the Western world: “producing high quality products with minimum
labor and capital” (ibid.). Yet, it is not how TPS is understood in the traditional
leadership lore. Whence the difference?
In their seminal The Machine That Changed the World Womack et al. (1990) said
very little about the human side of Lean production which has lately become largely
rectified, even dominant in, e.g., Jeffrey Liker’s work. This ignorance of the “soft
underbelly” of Lean by Womack and Jones, reflected in the above definition of Lean,
and the import of Japanese Lean practitioners to the US from the 1980s who were
lacking either in the interest or in the skills to reproduce, or at least to put into context,
the cultural side of their home practice, focusing instead on kaizen events and tools, all
contributed to a few unwarranted methodological presuppositions still tainting the
Lean paradigm in the West. These presuppositions are mostly leadership-related and
motivational, hitting the implementation and the sustainment side of kaizen, precisely
what is altogether and irreplaceably human about it. As a result, mostly everything was
and mostly is just flimsy that has infiltrated the Western practice either on the givers’
(the leaders’) or on the takers’ (the people’s) side, and Western Lean may at some
places, where countermeasures are not deliberately taken, look like an almost com-
plete human disaster, certainly as if humans had nothing to do with it. From the West’s
perspective this must be most sad not necessarily because Lean falls short of any noble
human purposes but because it proves to be inoperable and inactionable to a large
extent. As the West experiences it day in day out.
This dehumanized character of Western Lean looming around flies in the face of
the original Japanese idea, TPS as a human system—not because Toyota has ever
aspired to become a welfare institution or a psychological ward since the time of
Taiichi Ohno, but because respect for the people and continuous improvement as
each other’s corollary have never ceased to be the one and the only philosophical
tenet that paves the Toyota Way. And when there is a problem, as there happens to
be only too often, they always, self-evidently fall back on it, and nothing else, for
inspiration and direction. As Eiji Toyoda himself stated in more technical terms:
“[b]ecause people make our automobiles, nothing gets started until we train and
educate our people”. Therefore, as the operator, not the machine, is the most
important asset, the most important principle to add value to the company is by
developing the employees and partners.30 This is most dissimilar from the VW,
30
http://www.performancemagazine.org/performance-management-in-the-automotive-industry-
volkswagen-toyota-and-fiat/
Audi, or Ford type of reasoning that one way or another circulates around executive
leadership, technology, and numbers, and more than that, they do it consciously.
As one of our sources concludes on the basis of company documents: “Most of
the important representatives of the automotive industry present in their annual or
sustainability reports elements regarding performance management. However, we
can also identify a drawback of these reports. The ones that present non-financial
KPIs or practices are very rare. The annual reports in general and the automotive
industry ones in particular rely mostly on the financial data, neglecting other types
of indicators. In the present case, this could show that the automotive industry has
the tendency to focus mainly on measuring the financial performance” (Chelniciuc
2013).
We may come across a like-minded transformation process when visiting Bosch,
another major German conglomerate. Bosch Group board member Dr Werner
Struth says that Industry 4.0 is driving a major reorganisation of industrial produc-
tion.31 “Industry 4.0—or the Fourth Industrial Revolution—represents a shift
change in the capabilities of the Internet of Things (IoT). It can be broadly defined
as an evolution in IT systems that connects people, systems and devices to improve
productivity and services,” another piece of technology that will drive management
systems and cultures to new challenges, creating a new plateau of ambiguity in the
continuous improvement culture. “New business models include [those] with
external customers [and] with our internal processes in order to achieve higher
productivity [and] efficiency,” says Struth.
“Bosch believes that data collection and analysis from the shop floor will lead to
new business models,” again, a typical kaikaku by technological innovation which
will either be followed by an equally powerful kaizen phase or not (before jumping
into the next kaikaku phase).
4.0 as a cyber-physical system of course is not unique to Bosch or Germany

but the added value for Bosch would come from its combination of the
technological domain of production, where the company is traditionally
strong, with the technological domain of cloud- and internet-based
solutions, where it is not so strong, the two constituting a new horizon for
technology leadership (over people). Technology is pushing culture to
adapt if it can.
But it is not about mere adaptation either. It is also about growing
dysfunctionality. MRP and ERP systems have always been trespassing
the domain of leadership, data collection and management, substituting
for leadership across cultures. Managements have always had difficulties
to understand that IT systems are not comprehensive management
(continued)
31
http://www.theengineer.co.uk/in-depth/interviews/bosch-board-member-werner-struth/
1020471.article
systems and they are not even their most important or most useful
platform. (It is leadership.) IT systems are technologies like any other,
tools like any other. More complex tools but only tools whose substitution
for leadership and management has greatly contributed to the
inefficiencies of decision making all around. (Very briefly, its linear
grouping of data in the service, at best, of streams as well as its
low-level enterprise-wide connectivity just cannot eliminate, not even
reduce the objective need for comprehensive, multi-dimensional leader-
ship and a corresponding system capability.) Not only do we see that this
estranged platform has been gaining new functional powers with its
various mutations, innovations, and interfaces with production
technologies it is also becoming a pièce de resistance in the evolution of
self-reflection in tech prone cultures as such, Germany and Switzerland
perhaps first among them.
We hear, accordingly, that “initial first steps into Industry 4.0 can be made with
first-step implementations that do not require large amounts of capital expenditure
and can manage the value stream of materials in the factory in order to drive down
logistics costs and inventories”. Well, they won’t overall. Or not at least until they
gain their acceptance in a culture that still doesn’t exist. Until then incremental or
unaccounted costs combined with the investment costs will at least equal its
benefits. Why? Listen to Struth: “The major part of Industry 4.0 is getting more
information from my production system, being able to analyse this information,
gain new business processes and optimise the entire value stream.” That industry
4.0 (or any technology for that matter) itself would “gain new business processes
and optimize the entire value chain” is a somewhat misguided assumption, how-
ever. What will in fact happen as has always happened in the past no matter what
technology we introduced is that technology will colonize and suppress leadership
and holistic systems with a renewed force while creating new inconsistencies and
new sources of waste in management. A lot of people across the globe might have
the wrong impression as if new technology create a better chance for more precise
management, i.e., by reducing the number of human interfaces, but that is only
because most of them still do not seem to grasp the structural differences between
management and technology (cf. Häuser 2013).
However tantalizing, formidable, and sweeping the technology changes

might be, leadership and management will neither necessarily improve
with nor become replaceable by them, not at least without a loss of
management efficiency, by and large due to a simple truth that the
concentration of throughput and of throughput related decisions will
not change the ratio of the unit cost of bad decisions. Technologies, 1.0
(continued)
to the umpteenth, are equally prone to create dangerous mass

environments; once ostracized along with the mass production of
tangible goods traditional organisational structures return with
increased force through the back door in reaction, ostensibly not to
machine and equipment fetishism, but to the hidden dictates of
concentrated, mass information management. With the asset focus
unchanged, only made more complex with the introduction of various
cyber platforms spanning currently from ERP to 4.0, management
superstructures keep on bloating to further undermine leadership
accuracy and efficiency.
What can happen though is that the new technology is so powerful that it makes
up for the consecutive management inefficiencies, or, in other words, even if
underutilised compared to the earlier technology, its throughput surplus will lead
to bigger output at lesser cost. It is a very rare scenario, however (Scarbrough and
Corbett 2013). Huge investments are costly and operational inefficiency due to poor
leadership and systems will mar the margins anyhow, which is not acceptable in
today’s competitive industrial environment. Technology is important but so is the
efficient management of technology.
The VW and Bosch TPS spin-offs are apparently governed by technology-

oriented management thinking rather than, as we shall see in more details
below in the case of TPS, kaizen by the people. While “Toyota has turned
operational excellence into a strategic weapon” (Liker 2004, p. 6), this
weapon for the German companies cited here is productive technology.
They want, somewhat resembling the General Motors of the 1980s, to
“automate their way” to high productivity and quality.
This, however, creates a disconnect in the culture vis-à-vis continuous improve-

ment as once subject to technology culture can increasingly become alien to the
people on the shop floors (cf. Drucker 1971). That technology has a profound
impact on organisation is obviously not a new observation.32 That technology is
controlled by management and the industrial intelligentsia often to the detriment of
the shop floor employees’ freedom, autonomy, self-evaluation, even humanity, is
something that has always been in the focal point of industrial and class conflicts.
Still, we are less concerned here with the general issues of morality than with the
cohesion of the organisational construct and even that only from the point of view
of how it serves continuous improvement and operational excellence. And a
technology-oriented approach has such limits whether IT- or machine-related.
Most importantly, neither of them heeds the precepts of “morals in time” and
32
Scarbrough and Corbett (2013).
consequently their concept of operational excellence is vacuous at the core. This

lack of a moral pattern of thinking is well represented in a recently surfaced practice
of VW. At the time of the writing of this book the car maker is accused by the
United States’ Environmental Protection Agency (EPA) to have widely used an
emission control device in its diesel vehicles to manipulate emission data during
tests but only then. The fraudulent practice “has resulted in cars that meet emissions
standards in the laboratory or testing station, but during normal operation, emit
nitrogen oxides, or NOx, at up to 40 times the standard. The software produced by
Volkswagen is a ‘defeat device,’ as defined by the Clean Air Act.”33 What may well
become VW’s own “sticky pedal” crisis can cost the car maker its credibility
around the globe, undermine its push to stabilise its position as the world’s recently
turned largest, and aggravate the company’s leadership crisis on the top. “There is
no way to put an optimistic spin on this—this is really serious,” said Max
Warburton, an analyst with Bernstein Research. “The best case for VW is probably
still a multi-billion dollar fine.”34 The case of VW is a clear example of businesses
living not only in time but also for time with their aggressive strategies, step change
objectives, steep growth curves, hot money, the combination of often reckless risk
taking and an expectation of short-term payoffs, arrogant managements—and the
disregard of people and operational excellence warranted by the balanced interest
of the community of stakeholders: employees, customers, suppliers, shareholders,
and the broader society.
Furthermore, while not supported in the praxis of morality, continuous improve-
ment pinned on technology platforms will advance in discreet motions depending
on which of its—addition, customization, mastery, improvement, and
downsizing—phases an organisation faces. It is important to note the addition
phase usually ushers in quite radical changes in any organisation (this change
also often serves as the raison d’être of the introduction of a new platform, i.e., to
improve productivity) but all the rest of the phases, too, will continually impact,
often jam-pack the organisation, creating a need at system level to deal with the
parallel forces in technology and in the human environment at the same time.
Technology-led organisational changes, therefore, are more unstable and

less calculable than kaizen-type, evolutive changes. Indeed, they are often
revolutionary when on grand scale, producing also some of the
repercussions of a revolution like frustration, loss of orientation, fear,
and resistance.
This all is very typical of Western TPS spin-offs. XPS (substitute anything for X
and call it tailor made to any production system) should not necessarily be TPS
33
http://www.cnet.com/news/volkswagen-audi-accused-of-using-software-to-cheat-us-diesel-
emissions-tests/
34
http://www.wsj.com/articles/volkswagen-ceo-apologizes-after-epa-accusations-1442754877
blueprints for sure but once the core idea of systematic kaizen falls out of the heart
of any specific continuous improvement effort it is the rationale of a production
system that gets compromised and XPS melts away into top-down, controlled Lean
approaches, in this case controlled by technology.35
What happens with VW is that the underlying Toyota philosophy has been
shredded and replaced with a number of principles thought to be more
fitting with the local culture, i.e., of Germany.
These principles of technology- instead of people-orientation, the Meister

instead of the sensei, apprenticeship instead of learning by doing, line automatiza-
tion instead of flow etc. would not be pulled together into a self-styled philosophy
but are certainly expressive of a robust industrial culture. It is a different question if
this culture is adequate in the Chinese or Brazilian societal milieu, and whether
technological leadership is not felt in these to be unacceptably antagonistic with the
ways of the local communities.
The same holds for other XPS’s whether for GMS (the Global Manufacturing
System of General Motors), FPS, BPS, HPS (Honda Production System) and
literally hundreds more: specific national cultures and company decisions have
modified the TPS original to some or larger extent (Netland 2013a, b). Some have
kept their resemblance to the Toyota Way in their key aspects like team-based
systemic kaizen, sensei or servant leadership, one-piece flow with levelling, to
qualify them for the title of TPS spin-offs even though they have built idiosyncratic
practices. Even then it is hard to identify an underlying philosophy in them to unify
35
Cf. with the Nissan Production Way that has kept much of the TPS spirit, too, but losing focus on
the people. “Compared to Toyota, the synchronization philosophy of Nissan is more geared
towards lower-volume, higher-variety and more high-tech manufacturing. Exactly the type of
characteristics that western economies claim to have.” http://better-operations.com/2012/08/30/
nissan-production-way-a-better-alternative-to-tps/ Do not miss Jeffrey Liker’s contribution in the
comment section on the side-effects of this: “The statement that the Nissan system is a better
alternative to TPS is a silly statement. By and large Nissan copies Toyota. If you look at the
underlying philosophy they are talking about the same thing–continuous improvement through
surfacing problems and solving them one by one. Specific surface manifestations like how much
automation you use in a particular area and whether or not you use a cart are simply
countermeasures being tried at different places and times. Toyota has been all over the board in
the use of automation and IT. They have kept a very consistent philosophy over decades of solving
problems at the gemba and striving for simplicity. They highly value people development and
kaizen and normally will move away from technology, like a lot of automation, when they
determine it reduces flexibility and reduces kaizen. Nissan does not seem to have as strong and
consistent a philosophy of developing people and their system these days is probably influenced by
the fact that Renault, a French company, owns them. Nissan sees to be more tool focused, which I
agree makes them an easier fit for American companies, in that it is more similar to what we do. It
is not necessarily the best way as we depend far too much on tools to solve our problems and far
too little of gray matter and persistence to do what it takes to solve the problem and achieve the
target.”
those practices into a hard-worn CI culture, and these companies might as a result,
often visibly, lag behind in performance. Others chose a structurally different path
in the first place with confirmed or likely negative impact on their long-term
CI-capabilities. Here we are talking about tech orientation to win more flexibility
and bigger efficiency the way VW conspires, top-down controlled Lean to push
through changes like Ford and Renault experiences, or more individualistic prob-
lem solving cultures like that of Honda.
Eventually, it is all about culture. As Western TPS-implementation or Lean

practices are (i) not grounded in a solid philosophy-with-culture synthesis
capable of supporting a coherent CI platform, or (ii) insofar as culture
plays a role in the selection of their operational and CI principles these
principles are counterintuitive to driving solid improvement, Western
(automotive) corporations are underperforming in comparison with
Toyota.
In order to bring them one level higher they would need a new momentum and in
fact a new understanding of how to (re)phrase their CI frameworks.
The Toyota Way
4
4.1 The Japanese Education System in the Service of Kaizen
Excellent works abound by now about the Toyota Production System and Kaizen.
To avoid unnecessary repetition and still bring value to the understanding of the
approach let me, first, briefly discuss a wonderful contribution by Jennifer Yukiko
Orf on Japanese education and its role in kaizen (Orf 1998).
On the basis of Imai’s reflections on kaizen practice (Imai 1986) Orf summarizes
the cornerstone requirements of the kaizen philosophy. Some of them are well-
know, like the ability to work effectively in a group, or the awareness that things
can always be improved up, all mostly self-contained, “common sense”
requirements, while others are often omitted from or unknown to the Western
practice, like the willingness to improve things for everyone, the need to understand
how things will affect everyone, or to take pride and celebrate even the smallest
improvements, i.e., some other-regarding, even collectivistic practices. Orf says,
“[i]t is not simply a matter of being able to work in a group, but also to work as a
group,” and let me add the nuance that makes it so different for us, to work for a
group. Identifying with the group “to the extent that the individual sees the group’s
goals as being his or her own” equals to “gaining a sense of collective identity”,
belonging, and emotional attachment. In Japan “elementary school functions to
instill this sense of collective identity and emotional attachment to the group in its
children,” a practice that is wholly alien to the West.
I want to nail down here that we do not have an individualist “counter-educa-
tion” in the West instead. It is true that individualism, moral autonomy, and the
striving for excellence used to be deeply embedded in our civilization for many
centuries and was the very ground where capitalism began its career (Weber 2002).
Individualism once was a position of responsibility toward the Creator, fellow
humans, and one’s self. The view of productive work profoundly affected by the
Reformation and elevating very worldly professions to the dignity of God’s calling
created a moral halo around capitalism. Conceptualized in the heavily moral
language of capitalism the associated inventory of virtues comprised honesty,

58 4 The Toyota Way
diligence, frugality, prudence, delayed gratification, hard work, thrift, care for one’s
own family, workers, and assets, devotion to one’s chosen craft as a platform of
self-actualisation, all ad maiorem Dei gloriam. As Weber argues the way this
practice could finally triumph over and outperform rival practices from the more
distant past was that its joint appeal to rational self-interest, moral excellence, and
spiritual justification, rang the bell with a rapidly growing number of people in
different social strata that were finally pulled together into a new societal system.
As Benjamin Franklin put it in his Advice, already cited: “Beware of thinking all
your own that you possess, and of living accordingly.’Tis a Mistake that many
People who have Credit fall into. To prevent this, keep an exact Account for some
Time of both your Expenses and your Incomes. If you take the Pains at first to
mention Particulars, it will have this good Effect; you will discover how wonder-
fully small trifling Expenses mount up to large Sums, and will discern what might
have been, and may for the future be saved, without occasioning any great
Inconvenience.
In short, the Way to Wealth, if you desire it, is as plain as the Way to Market. It
depends chiefly on two Words, INDUSTRY and FRUGALITY; i.e. Waste neither Time
nor Money, but make the best Use of both. He that gets all he can honestly, and
saves all he gets (necessary Expenses excepted) will certainly become RICH; If that
Being who governs the World, to whom all should look for a Blessing on their
honest Endeavours, doth not in his wise Providence otherwise determine (1748).
However, with capitalism increasingly emptied of its moral and spiritual zeal
over the last, maybe, 150 years, a process already announced by Weber, individu-
alism slowly yielded its position to egotism that is the dominant social attitude of
our time. Egotism is divested of the traditional, socially valued virtues of individu-
alism, it is relativistic to values, it is technical and instrumental in its approach to
people, cherishes immediate gratification, lives largely on loans and inflation,
predates the leftover of balanced competition. If there is anything we can contrast
with the Japanese collective identity it is egotism (neither of them thought in
absolute or exclusive terms). Now, it would be very hard to identify constructive
notions of excellence on this ground.
Getting back for the time being to Orf’s portrayal of kaizen we deal with a
philosophy or way of thinking, and emphatically not a set of tools. The
characteristics needed to think kaizen effortlessly in the workplace “are ingrained
in the Japanese throughout their education system” (Ibid., p. 74). Working as a
group is much more than working in a group, and the education system reinforces
and inculcates the relevant societal practice. “Working as a group implies somehow
that the group itself is an entity of its own that is more than just the sum of the
individuals that comprise it.” The preservation and nourishment of the group is
everybody’s responsibility within, hence the development of the crucial abilities to
respect authority and peers, listen, voice an opinion, delegate, evaluate, and to be
self-critical. Collective identity and the value of collective membership are taught
to the students across the education system, with the final goal of preparing groups
for self-management at work as well as in (classroom) discussions. Classes have
4.1 The Japanese Education System in the Service of Kaizen 59
sub-units, called han, grouping 4–6 students each, and all small group activities
traditionally take place in the han. These are re-formed every few months allowing
children to mingle and get accustomed to different personalities and behaviours.
Often sub-groups work together in extracurricular activities: classroom chores such
as serving lunch and cleaning add to other-regarding duties. The skills to work
effectively in and for a group and community are brought home very early in the
childhood, during primary school years.
This, however, does not block the need for self-reliance, self-responsibility, and
persistence in keeping one’s own personal environment and belongings in a pur-
poseful order, clean, and, indeed, standardized according to simple charts and
posters educating them in manners and in the way how to perform certain tasks.
Personal bonds form in helping one another with an emphasis on the process rather
than on the outcome to strengthen cooperation. Competitiveness is always kept
under the lid of team interest and character formation even in middle school or
beyond when much of the synthesizing, amicable atmosphere of the elementary
school disappears, authority and social hierarchy kick in more, while pressure and
“exam hell” can really hurt. A lot more could be said but I am sure that the reader
clearly sees the author’s (in this case, my) point by now.
The Japanese school system by and large promotes attitudes and behaviours
that not only directly impact upon the kaizen philosophy at workplaces but
also generate, indeed almost entail, them. The drive for continuous self- and
team-improvement experienced at workplaces is based on the respect
for the people and on standardized processes which, in turn, are rooted in
the values, skills, and practices people bring from their early childhood.
Kaizen might be a philosophy but a philosophy that utilises and reinforces
deep-seated learning and a shared cultural code such as that we do not
possess in the West.
Now, how does this capability enhance the effectiveness of TPS? Philosophy,
processes, people, and problem solving are considered by one of the greatest living
authorities of the Toyota Way, Jeffrey Liker, to provide an appropriate framework
for understanding. All four categories are reflections of and directly or indirectly
flow from early childhood inculcation but then necessarily developed further on
company premises. As a result of this firm inclusion of a deep-seated cultural code
in organisational practice such a pervasive transformation took place in the shift
from the old mass production era to the Toyota culture that the vast majority of
foreign companies still cannot fathom let alone implement. What is probably the
most difficult to reproduce is how exactly Toyota’s company culture and the
individual beliefs of its employees are aligned due to the all-pervasive societal
inculcation of the values just described.
Toyota’s corporate personality is just as much focused on such attributes of
school life as self-reliance, respect of people, purposeful order, collective interest,
60 4 The Toyota Way
teamwork, persistent self-improvement as a Japanese child’s education prefigures

PDCA (the plan-do-check-act cycle), kaizen, genchi gembutsu (go and see), and
other key Toyota concepts. If anything, this unity of the corporation and its parts are
resemblant of the medieval Catholic concept of the Ecclesia (Church) which our
Societas (society) has long differentiated itself from, and it is much more robust
than the juridical concept of a Western corporation. It is moral at its very roots. To
work yourself up to this level of perfection from a tool-box image of TPS is
virtually impossible, in fact, speaking about the West, it is counterproductive.
So, why is this crucial that you have a robust CI culture encompassing your
whole organisation, or, preferably, encompassing the whole supply chain of which
you might only be a member as well as the whole supply network (with all your
customers and vendors) of which you are definitely only a member? Well, apart
from all the custom responses such as that you want your stakeholders happy, you
want bigger market share, bigger profit, and recognition, most importantly you want
CI because if you do not have it you will have another kind of culture. Some culture
you will have, and to have a poor culture, a corrupt, informal, or “unofficial” culture
(working under the carpet against your “official” vision) is probably the last thing
you want for yourself and your company. This is why you better have a CI culture in
the first place.
Obviously, all the rest still apply. But Liker is very explicit about the competitive
advantage of the Toyota Way: “The Toyota culture has evolved since the
company’s founding, and is the core competence of the company. It is the reason
why operations are lean, cars hit the market on time and on budget (. . .). At the core
it is about respect for people and continuous improvement, and this has not changed
since the company’s founding.” (Liker 2004, p. 4). Toyota is a for-profit but not a
profit-oriented company in the strict sense of the word. Long term thinking
precedes short term goals, and this stability of the core principles, as different
from a standard Western firm’s recurring revisions of its “fundamentals” as can be,
not only creates the aura of stability and reliability within and around Toyota but
also conserves the essence of continuous improvement, i.e., continuity, on the basis
of unshakable principles.
4.2 Two Different Conceptions of Waste
Culture precedes principles and tools not only epistemologically (in the structure of
learning and explanation) but also ontologically (it is the first to exist pur et dur).
Principles and tools gain their meaning in the particular Toyota culture and can
quickly become acontextual elsewhere. A typical example of this is how inventory
reduction is considered here vs. there. In the West inventory reduction, for instance,
is almost always an end of “kaizen” programs; in Japan Just-In-Time and inventory
reduction are the tools to expose waste, or even more so, a wasteful practice that
may point to more fundamental problems elsewhere (Emiliani et al. 2003, 2015;
Harada 2015).
4.2 Two Different Conceptions of Waste 61
Waste is considered a symptom, an indicator of process (maybe system)

illness, it is not the illness itself.1
Waste, to continue with the example, is like fever to the body. Not an actuality in
and for itself to be eliminated but always reflective of a disruption compared to the
ideal balanced state of a system. Surely, similarly to fever, it needs to be contained
and controlled with immediate measures but ultimately you may need antibiotics to
kill the bug and prevent illness from progressing. In other words, inventory reduc-
tion is not the objective but the consequence of the right measures applied to the
process. KPI improvement is never the objective, it is the result of a healthier
process. To reduce inventory, say, by 40 % as a result of a quick action is no
advance; it is stabilization at best. The advance is to get to the root cause of
inventory increase which might lie very far out of the immediate vicinity of the
first symptom. Indeed Toyota may do inventory reduction even if the standards are
met; to further try the process and press out its weakest links at times of
relative calm.
Intentional pressure on the process for the sake of improvement is an

idea wholly alien to the vast majority of Western companies. Why?
Because most of them do not understand the true nature of sustained
improvement. Most of them believe in fact that continuous firefighting is
an adequate conception of CI. After all, they think, it is a sign of
improvement that you are not entirely broken.
Accordingly, at Toyota, there was the culture in the beginning, and principles
and tools subsequently stratified on it in the purposeful, trial-and-error environment
to help identify, expose, and reduce waste in the processes, and more than anything,
to find the root causes (Berengueres 2012). While the West is still result oriented,
Toyota has always been process oriented. While the former applies tools to kill
waste, the latter does that to uncover waste and learn in teams about the root causes
in order to sustainably improve processes. When the West took tools over from
Toyota, they took them to find technical quick fixes to problems whose underlying
reality—first that they are complex, and second that they crop up in an intricate
social environment—they did not bother to learn. As instruments of power and
control rather than of inquiry, these tools remained dysfunctional to a large extent in
their new context. However, as instruments of control, they are still meant to
regulate both the technical and the social environment which they are brought into.
1
“The bug is never just a mistake, it represents something bigger. An error of thinking.”
(Mr. Robot, S01 E03, a TV series released by Universal Cable Productions, created by Sam
Esmail, 2015).
62 4 The Toyota Way
Following from the objectivistic, control-freak, short-term thinking, and the

egotistic disposition in our societies “the general tendency in the West,” says
Liker, “is to view lean as a tool kit that can help control the work environment to
achieve specific measurable objectives. We award ‘black belt’ status to experts
trained in the tools who go into the work place to get the results.” (ibid., p. 24). (. . .)
Essentially what is happening is we are objectifying the workplace and seeing
simple cause and effect relationships while losing sight of the people and the
complex dynamics of the environment.”
Western improvement programs are technical, technicizing the human

side of the organisations, too, while TPS is fundamentally social.
The one is instrumental in its conception of people, the other—deep down at its
roots at least—is constitutive, putting people first. [Discontent with Lean at falling
short of its own ideals has also been characteristic of foreign or hybrid plants across
virtually all car makers, as the research by Rinehart and co-authors (1997)
evidenced.]
Toyota very aptly found and sustained the DNA metaphor for its parallel
improvement of the people value stream and the product value stream. Again, a
lot of lip service is paid to this DNA thing in our hemisphere without understanding
the core concept.
While we have pretty exhaustively internalized the product value stream

and in mapping it we can put our fingers on where value is built into the
products and where they just stand wasteful of time, we have learnt very
little about the nature of the people value stream and to consider the
entire careers of people one by one from the point of view of where value
is built into them, that is, at what points learning does happen.
In the West learning (mostly in the form of training) happens in an instrumental

way much like people are considered. We provide training for doing’s sake, and
conceptualize training materials to be conducive to more efficient job fulfilment.
Contrary to the balanced structure of the Toyota double helix, where learning by
doing, accordingly, is a faithful reflection of the interaction between people and
product development within a joint process (amounting to process orientation), the
West lives, at best, with learning for doing. Or, rather, training for doing.
4.3 Toyota in Crisis 63
4.3 Toyota in Crisis
Now, before we move on to find out where TPS is leaking despite its powerful layout
let us briefly recall the “sticky pedals” crisis that culminated in 2010 and produced a
severe setback in Toyota’s sales for a few years after plus a serious blow to its
reputation as the world’s quality leader. This global—originally quality—problem
that caused sudden unintended acceleration in passenger vehicles and resulted, some
say allegedly, in fatal accidents, eventually forced Toyota to call back some nine
million cars worldwide. The problem was caused by the out-of-place driver’s side
floor mat in the minority of the cases and by a mechanical and electronic problem with
the accelerator pedal and in the throttle system (ETC), respectively, in the majority of
the cases. The damage caused to Toyota substantially grew when it turned out that it
had been lying to the public about its quality problems for years. “The issue became
public in August 2009 after an accident in San Diego, Calif., killed a family of four. A
Lexus dealer had improperly installed an all-weather floor mat into a Lexus ES350.
The mat entrapped the gas pedal, accelerating the car at full throttle. The incident
occurred after the National Highway Traffic Safety Administration (NHTSA) of the
United States had opened a defect investigation into the ES350 over that issue in 2007
and identified other Lexus models that might be similarly defective.
Toyota launched its own internal probe of the issue that year identifying the issue, but
didn’t share those results with the NHTSA. The company recalled 55,000 mats in 2007, but
not any vehicles. The company then revised internal guidelines for a minimum clearance of
10 mm from a fully depressed gas pedal to the floor. However, the guidelines weren’t
applied to all vehicles—and not to the ES350 involved in the San Diego accident. As a
result, despite knowing the vehicles had a potentially fatal defect, Toyota kept producing
them to the same specifications”.2
That is, what originally might have been a rather routine supplier issue, did not
only inflate into a very costly problem for the OEM (original equipment manufac-
turer, in this case Toyota) due to its inappropriate internal quality assurance practice,
but also propelled the Japanese firm into a major credibility and reputation crisis.
When it finally turned out that Toyota had been lying about the sticky pedals and
when it finally decided to call back millions of cars and the public suddenly grew
aware of the magnitude of the issue the famed ethical principles of the Toyota Way
were immediately called into question along with the entire product value chain.
“Rather than promptly disclosing and correcting safety issues about which they
were aware, Toyota made misleading public statements to consumers and gave
inaccurate facts to Members of Congress,” Attorney General Eric Holder said
announcing criminal charge against the Toyota Motor Corporation and a deferred
prosecution agreement with $1.2 billion financial penalty, the largest the Depart-
ment of Justice had ever levied against an automaker.3
2
http://mashable.com/2014/03/19/toyota-lied-aceleration-recall/
3
http://www.justice.gov/opa/pr/justice-department-announces-criminal-charge-against-toyota-
motor-corporation-and-deferred
64 4 The Toyota Way
Contrary to Toyota CEO Akio Toyoda’s testimonial before the Congress in

February 2010 that “we never run away from our problems or pretend we don’t
notice them”,4 this is exactly what happened. In his speech which would rightly be
felt in the American public as insincere and even arrogant he defended his company
on the dubious grounds of—its magnificence. However, when he declared that
“what caused the recall issues” was that Toyota had been “expanding its business
rapidly”, indeed, the pace of growth might have been “too quick”, it felt as if we
were listening to an old record of mass production mentality. Too quick growth,
which anyhow is not a fully convincing argument for a for-profit business, and even
less convincing an argument for dropping the quality and ethical threshold in a
prestigious company based on the respect and continuous development of people,
had already been the argument back in 2004 in the time of another, albeit less
publicized, recall crisis.5 Growth has indeed always caused problems at Toyota,6
and growth, as an opinion ran at that time confirmed by many more, “especially that
driven by production outside of Japan, has come at a cost in terms of the quality that
was key to the company’s market success and production efficiency. Its
Georgetown, KY plant has slipped badly in ratings from JD Power and Associates,
and quality ratings on several individual models have also fallen from the top
ranks.” So, it is at least preposterous to bring this up in an argument that, we are
aware by now, struck a false note anyway, underscoring a tradition, at least parallel
with the evolution of the Toyota way, of corporate social irresponsibility at Toyota.
“Growth has sometimes put more focus on getting cars out the door than
adherence to TPS principles. There has been a lack of TPS experts from Japan to
train North American supervisors. Language barriers have played a role. There has
been a much higher level of turnover in North America, both at the floor level,
leading to training issues, as well as at the executive level as TPS experts went to
Toyota rivals” (ibid.). Growth, in brief, evidenced that Toyota had abandoned its
focus on the people flow; the latter no longer governed its development strategy.
Greed and arrogance triumphed.
The reverse side of basing operational excellence on people development,

especially for a company that prides itself, somewhat paradoxically, to
develop a dependable front-line leader in 15 years or more, is obviously
that you cannot grow as fast as sometimes you would love to. This is one
thing. Another is that perhaps you cannot achieve the same integration of
your operational culture, anyway, in a national context outside Japan.7
4
http://www.theguardian.com/business/2010/feb/24/akio-toyoda-statement-to-congress
5
http://www.scdigest.com/assets/On_Target/10-03-03-1.php
6
http://www.scdigest.com/assets/Newsviews/04-08-12-1.cfm?cid¼470
7
For sometimes startling employee opinions please visit http://www.glassdoor.com/Reviews/
Toyota-Motor-Manufacturing-Kentucky-Reviews-E19267.htm
The third is that the Japanese soil itself might be eroding insofar as national
education and culture are increasingly under the spell, even attack, of the modern
egotistic world, and children no longer lay their faith unanimously in the traditional
values of society, also undermining the cultural backdrop of TPS.
The events just described briefly may have come at the right time for Toyota,
also after the global recession, to turn back to its basics, and try to build its
resilience further. And indeed, Toyota has left the crisis behind with a pledge to
listen more carefully to its customers as well as to its own people, with a determi-
nation to improve leadership effectiveness at regional and site managerial levels, to
enhance quality control, and to substantially increase its technological alertness
(in softwares, electronics, and modular product platforms).
Competition is as fierce, however, as it can be, and Toyota’s quality and
productivity dominance is not indisputable any longer. Stocks are performing
well, with roughly at the level of the pre-recession maximum (while Ford stocks
are still only at some 35 %, struggling in 2015, and Nissan and Honda have been
edging up). It remains to be seen how Toyota can add value to its tarnished
company culture, or whether its gets obfuscated under the twofold pressure of the
tech marathon and the failures of its learning system. As for TPS, whatever Jeffrey
Liker says in this case (Liker and Ogden 2011), it did suffer a blow, and it obviously
cannot be a candid argument that the acknowledgment of problems proves the
health of the system and, anyhow, by definition, Toyota ought always to fall short of
the True North—so why bother?
Indeed, just how broken an organisational practice needs to be to be acknowl-
edged as such?
At Toyota deference and groupthink have been triumphing over problem

solving for quite some time, silos marred the supply chain, central
command-and-control suppressed and nipped the feedback loop of
Hoshin, complacency ruled in corridors and offices, the basics of TPS
were abandoned what regards respect of people and CI (that is, especially
the people flow), and blatant lying became a habit, certainly, to the
outside.
Is that broken enough? I believe so. And many others did at the time of the recall
crisis. What happened, as a result, was that the halo of invincibility as well as a good
deal of goodwill that used to endure with Toyota evaporated from one day to
another. It not only turned out but became obvious to the outside that Toyota
after all is a human system with any faults that humans and a deficient system
can have.
That the practice of TPS could damage its own DNA as far the people flow goes
can be a system failure but can also be an indication of a bad system, which Toyota
people might or might not see. In a more recent book apparently of the genre to help
Toyota soften the blow and curb its repercussions Jeffrey Liker and Tim Ogden say
66 4 The Toyota Way
what they believe to be a good argument in defence of the failed system: “[d]espite
Toyota’s massive growth around the world, core engineering and design, postpro-
duction engineering (dealing with engineering changes to the vehicle after it is on
the market), and quality and safety remained centralized in Japan for several
reasons. First, the engineers who were most experienced in the Toyota Way, TBP
[Toyota Business Processes], and TPS were in Japan. Second, modern automotive
economics require large scale; in order words, the majority of the design and
engineering can’t be unique to one vehicle or to one country or region. (. . .) Thus
it makes sense for these activities to be centralized. In practice, this centralization
meant that no region—not even North America, which was by far Toyota’s
largest—could make final decisions about recalls. Those decisions were made
centrally in Japan, based on information received from the various regions. (. . .)
[T]here was yet another good reason that Toyota had decided to keep the engineers
dealing with recalls separate from customer-facing parts of the organisation: so that
recall decisions could be made by people who did not have to worry about the cost
of the recall or potential damage to the brand. The process was set up to make sure
that the quality department could put safety and quality ahead of business concerns
and was not unduly influenced by the sales decisions or regional units, which were
concerned about revenue and profitability. But this intentional separation to create
checks and balances created a different problem. In trying to protect quality and
safety decisions making from sales concerns, the company inadvertently choked off
a lot of customer feedback to the quality department.” (Liker and Ogden 2011,
64–65 %; cf. Abilla 2014).
Now, let me say a few things to this. First of all, the argument is wholly broken.
Indeed it smacks of the same attitude as Akio Toyoda and other Toyota executives
showed right in the middle of the crisis and which contributed a lot to the aggrava-
tion of the crisis, and to the attitude of arrogance, to be sure (cf. Fernando 2010;
Kurtzman 2010; Bensinger 2011).
I use this word “arrogance” here, very widely applied to Toyota back in
2010 and 2011, to bring home my point that the representation, explana-
tion, and evaluation of the crisis at and near Toyota have been spotted
with exactly the same enduring symptoms, i.e., of the loss of the True
North, as were the attitudes that had led to the crisis. No change so far,
not at least on this account.
Why do I say that? First, because Liker and Ogden try to justify a centralized,
departmentalized setup whose deficiencies, even dysfunctionality, were clearly
corroborated at the time of the crisis. Because they were, it would be very hard to
fathom a valid argument to save them. The authors still make this shot. Second,
while the centralization of certain functions, especially quality, safety, and postpro-
duction, that is, of core after-launch and after-sales activities, is hardly defendable
in a customer-oriented, indeed in any for-profit organisation, it is even less
comprehensible why the due processes that would connect them to the sales regions
were not set up and long sustained. Liker and Ogden’s attempt to play down this
obvious failure, which is a robust failure of the gemba, the process and of the kaizen
precepts alike, with emphasizing the professionalism behind all, is at least
questionable.
It is not professional in my view not to see your own value adding process
and then try to act as though you did it, only ugly reality does not care.
“Those decisions were centrally made in Japan.” Well, they were not. That is the
point. Or they were, but the decisions (not to act on time and in the right way) were
glaringly incorrect. Why were all of the most competent people sitting in Japan in
the first place? Then, are there any good reasons for them once they do so not to
establish the right channels of communication between Toyota City and the North
American and other regions? Also, why is the newly found argument of the scale of
economy (characteristic of mass production) is at all pertinent to after-sales
activities, and indeed to design and engineering at the current level of KM (knowl-
edge management), IT, regional specific products etc.? So, no, it all does not make
sense “for these activities to be centralized”.
Then, what comes next in the authors’ train of thoughts is very hard even to
comprehend. Decisions to recall were kept for engineers to avoid business interest
to meddle with quality-related decisions, they declare with some pride. (As for who
did what for detrimental “business interest”, remember that this setup have resulted
until now in several billion dollars wiped straight out from Toyota’s bottom line.)
But it still used to be a “good” practice in Liker’s assessment: that is, while the
separation of the centralized quality department from the customers was “inten-
tional”, the resulting congestion of the information flow between them (quality and
customers) was “inadvertent”. How? Why? Was there nobody to simply reflect
(hansei) about the consequences of running a seriously flawed, kind of a blind
process in one of the most sensitive interface any company can have?
Many more citations from Liker and Ogden’s text could further verify this point
of critique which I would not like to dwell upon but I do want to bring up a
quotation from CEO Akio Toyoda, which again is so characteristic of the model
temperament. “One of the lessons that we have learned is that safety and peace of
mind are two different things. I would say categorically Toyota’s vehicles are safe,
but we could have done better in terms of explaining [everything about our
vehicles] so that the people can feel peace of mind.”
What does that mean? To me it means, one, that Toyota never really thought not
engineer-like and rather than setting out from their customers’ exact perceptions as
to what they think about cars in general and Toyota cars in particular, their
perceptions about their own cars were (or are) mostly defined by the perceptions
of their own engineers. Well, if it was the crisis that Toyota needed to arrive at this
realisation then certainly the crisis did a lot of good to the company. Interestingly, I
68 4 The Toyota Way
heard out Henry Ford’s famous dictum from Toyoda’s words that you can order a
T-model in any colour as long it is black. Toyota says (or used to say at least until
the crisis brought home the opposite), “you, consumer, may believe many things
about our cars’ safety as long as you believe they are safe.”
Second, Akio Toyoda’s words also tell me that he did not quite manage to draw
the proper lesson from the crisis either. This lesson to me is that Toyota is arrogant
and its arrogance casts shadow on the official precepts of his culture developed by
Taiichi Ohno (1988) and exemplified in the Toyota Way 2001 document: that is,
respect of people and continuous improvement. The way Akio Toyoda chose his
words, not for the first time, reflects a good deal of condescension to his customers.
To help them gain their “peace of mind” requires extra efforts on Toyota’s side
because customers are probably too dumb to consume this simple truth: “we are
safe”. (Not speaking of the fact that apparently Toyota was not safe at the time of
the recalls.) If I were an automotive CEO I would probably have intimated instead:
“I am deeply sorry, but we as a firm were at near complete loss as to what safety
means in the perception of our customers. Please forgive us for that. We have
developed a much better understanding by now and will live by it in the future,
counting on your feedback at any point of time to make sure we do.” For safety
ultimately means what customers mean by safety, period, end of story. This or in a
similar way Toyoda would not have compromised the real safety level of the
Toyota cars while they would also have put their customer orientation into a
completely different—favourable—light.
All in all, I am not alleging that perfection is easy or Toyota was not striving for
it. What I say is that there is in the company a certain propensity to unsubstantiated
pride and defensiveness, arrogance in plain English, when it comes to practicing
and accepting criticism, especially from the outside, but also quite obviously
struggling with it within.
The halo of reverence that Toyota has been consciously building over the
decades caught and held so firmly many of the insiders and even some of
the outer protagonists that respect of people and continuous improve-
ment can still face a true challenge as to how to fight the bastard child of
that culture, i.e., arrogance.
It remains to be verified by future analysis, part of which is developed below,

whether arrogance such as this is constitutive of the Toyota culture or is a mere
system glitch that can be cured. But in any eventuality it is there and it has tainted:
leadership.
Arrogance is a failure of leadership. It is not primarily so for its human
component—leaders can be arrogant if this arrogance is counterveiled by a suffi-
ciently robust system—but for its corroding consequences for the system.
Apparently, the power centres within Toyota have not been successful in
appropriately dispersing power and leadership across the organisation,
so leadership failed to become, in the first place, a driver of the develop-
ment of a resilient kaizen system.
Leadership did not only turn out to be out of tune with such system principles as
respect of people and continuous improvement, but much worse than that, it turned
against the principles and corrupted the system to a large extent. “This is not about
the failure of Lean, this is about the corruption of a Lean success story through the
temptation of cutting costs without understanding the risks and growing the busi-
ness too fast in order to please short term goals set by senior executives,” says Mike
Loughrin, president of Transformance Advisors and a recognized Lean expert and
trainer (SCDigest Editorial Staff 2010). I do not share this view. I believe TPS/Lean
is inadequately equipped to reliably transform organisations and cultures.
TPS cannot defend itself against inadequate leadership. Leadership is

still the governing power behind TPS but the DNA of the Toyota culture
as per the Toyota Way is not the DNA of TPS.
It is convenient for the first time on these pages that I separated these two notions
and emphasized Toyota Way as the way to the True North and TPS as mere
practice. This inability of practice to support philosophy (or norm) is indicative
of the systemic problems with TPS and an erosion, in particular, of its cultural
leverage between the stages of processes and the system.
Any higher than the group leader level, that is, manager and above, where
the system mindset should rule and process advances would need to be
synchronized with the abstract principles of the Toyota Way mostly
within the Hoshin loops (policy down, results up, and frequent consolida-
tion) but also outside, leadership fails to dependably represent and pro-
mote continuous improvement due to deference and “unofficial”,
informal cultural incursions resulting from arrogance and the lack of
customer mindset.
While Toyota has been craving for excellence it has not only set standards for
itself but also helped TPS to a global career by setting standards to the whole world,
albeit standards that precisely for their uniqueness to the Toyota story are not
applicable to the world. That the world play by Toyota rules I still find an aspiration
of the company, which only lost some of its bite in 2010 and I personally do not
think Toyota can regain its damaged halo. The automotive industry in particular
does not seem to believe any longer that Toyota is set to overwhelm whatever
70 4 The Toyota Way
happens, and while the TPS-industry is still working hard to make up for the lost
credits, the system failure at Toyota opened eyes to the company’s vulnerability and
undermined the attractiveness of TPS. Lean has been getting increasingly specific
to the businesses for quite some time, mostly out of pure negligence though, but the
conscious choice to build Lean systems that are idiosyncratic to a given company is
a fairly new phenomenon; home-grown solutions are proliferating, True North is
not in the North in all cases, and all this has developed a new impetus since 2010.
The escape, to put it like this, from under the spell of TPS does not come
prematurely. In fact the mesmerizing performance record that Toyota
owns made several industries believe that they needed to copy Toyota as
faithfully as only possible to follow track. This however precluded them
from developing their own paths while necessarily falling short of becom-
ing true copy cats. The Toyota spell is evaporating now due to a system
glitch at Toyota. But the biggest benefit of all this is the recovery from a
dream that derouted the activities elsewhere when awake.
Two further lessons why such an escape is timely come again from Toyota. One
is the so-called hybrid cultures of the North American Toyota companies (there are
many more such companies outside North America of course, cf. Hartmann 1992)
and the recent redesign of Toyota’s internal learning system.
Putting the latter first we hear that in the aftermath of the crisis Toyota
established so-called “Customer first” training centres across its global operation.
“Toyota anticipates that in addition to full-time quality professionals, who will go
through a 3-year training program, more than 300,000 Toyota employees globally
will receive 8–16 h of training in the Toyota culture, TPS, TBP, and quality
procedures and practices.” Also, to “accelerate the [cultural] awareness process,
Akio Toyoda led an effort to create a small paperback guide entitled ‘Our Attitude.’
It is based on 10 attitudes drawns from the Toyota Way that are expected of every
Toyota employees. (. . .) These 10 attitudes are posted broadly in Japan, and they
show up as the first screen on every employee’s computer when she starts work. The
10 attitudes are
1. Customer first
2. Challenge
3. Kaizen
4. Genchi genbutsu (go and see to understand)
5. Shitsujitsu goken (use money and time wisely and avoid waste)
6. Teamwork
7. Ownership and responsibility
8. Humility and gratitude
9. Integrity
10. We love Toyota (joy and pride from working for Toyota).” (Liker and Ogden
2011, 68–69 %).
Interestingly the “attitudes are posted broadly in Japan”, and indeed the recall case
hit native soil mostly, the local kaizen schooling and national culture notwithstand-
ing. What is even more interesting is the newly introduced “8–16 h of training in the
Toyota culture, TPS, TBP, and quality procedures and practices.” That such a general
“training” regimen (a word very much dispreferred at Toyota in normal
circumstances) was introduced to practically the whole company population is hard
to read otherwise than as a criticism of the traditional on-the-job development (OJD)
process and kaizen. Jeffrey Liker was kind enough to publicize the core training
program for each level of the organisation at TMMK (Liker and Hoseus 2008, p. 115;
cf. Art of Lean n/a). Having a look at the classroom training matrix it immediately
pops out that apart from the very important tactical and technical features of kaizen
leadership and a general introduction to operational philosophies (Philosophies of
efficiency) there is no preparation course in Toyota culture, TPS, TMP, quality or
similar notions at more conceptual, abstract, value-related level. Hence the culture
will be very much—though not entirely—dependent on how the individuals teams,
team leaders, and group leaders understand and practice it. Pre-floor “Fundamental
skills training” (GPC) refers only to technical skills at the team member level and
nothing about “philosophy”. Indeed, as Liker and Hoseus see it “the training for team
members, team leaders, and group leaders focuses primarily on workplace
organisation, standardized work, TJI [Toyota Job Instruction], problem solving,
and more problem solving. (. . .) Accordingly, training underscores a perpetual
cycle [known as PDCA]: perform standardized work, encounter variation, conduct
problem solving, set a new standard, train everyone to the new standard, and perform
to the new standard. That sequence is the core of the daily activity for the team
members, team leader, and group leader” (ibid., pp. 138–139).
This sounds all very technical and without philosophical or cultural principles.
In fact, as it looks there is nothing to fall back on for orientation and inspiration in
times of crisis or temporary disengagement from the routine, so an inclusion of an
extra curriculum to fill the void was very timely. Will that do the job and will the
company’s fundamental principles fight arrogance and disengagement with suc-
cess, also with regard to a growing danger of disorientation under the burden of
predatory technological innovations? (Ohmae 2010) I doubt if anyone knows that at
this stage. What the lesson is that systemic kaizen is still further down the road even
for Toyota.
That may refer mostly to home soil but how does Toyota secure engagement and
a principled alignment to the Toyota Way in the more egotistic national cultures,
like the American? That it may pose an extra difficulty is likely even if, with the
Toyota Way far out, alignment should concern TPS only.
Toyota has wisely abandoned an emphasis on the collectivist nature of its culture
in the United States and does not wish to develop “Toyota persons” out if its
American associates. Apart from that the precepts of the Toyota Way have been
invariably applied in the American environment, too, what regards respect,
72 4 The Toyota Way
improvement, process orientation, and team work, thus extending the usual work-
place obligations of anyone anywhere to “being a good family member and
contributing to the broader community.” (Liker and Hoseus 2008, p. 194) But the
question still is how the motivation is secured that all embrace these values and
principles, i.e., in want of a national education system and a national culture to this
effect?
Analysing the rich treasure house of examples to be found in Jeffrey Liker’s
various books it is fair to say that any reasonably successful Lean transformations,
including Toyota’s own green and brown field investments across the world, boil
down to adequate leadership. To Liker’s credit he would agree with this reading. In
fact he would probably accept that his own confrontation of the so-called traditional
Western leadership style with the Toyota leadership style (Liker and Convis 2012,
p. 232) operates rather more with the caricature of the former than with a true
paradigm. That is where his conclusion leads in that Toyota leadership after all “is
not so different from the best leadership books”, meaning that appropriate leader-
ship is conceivable on not strictly Toyota grounds, too, and there are good
approximations of such leadership by authors and practitioners alike. Practically
all of the dozens of examples we have been provided show up some sort of a
configuration of leadership skills and management tools but coercion, strong-fisted
motivation, and a single-minded commitment to success by the CEO and his
immediate entourage are a condition sine qua non of transformations. Renowned
authors such as Jim Collins (2001), Collins and Porras (1994), Collins and Hansen
(2011), Stephen Covey (2013), Ken Blanchard (2010), Peter Senge (1990), and
Senge et al. (1999) all talk about leaders and all come forward with either an
inventory of leadership skills or a roadmap of change designed for and implemented
by the CEO.
In fact, what Liker says is that “Toyota is not so much unique in its leadership
formula as in its execution of that formula”. In his estimation two things stand out.
One is the consistency in the development of leaders and a resulting set of values
common to most leaders within Toyota; and the other is leadership as a system, “the
totality of this learning” ingrained and coherently evolving (Liker and Convis 2012,
p. 234). However, as we have seen earlier, it is precisely this “totality” that has been
put under duress during the crisis to fail not once, not twice, in its fight of arrogance.
Insofar as a recurring phenomenon arrogance takes asunder this neatly crafted
system of practice and culture, or even worse, it has traditionally been a constitutive
element of the structure, flowing from the national culture of self-reliance, defer-
ence, groupthink, and collectivist mindset, combined with the complacency of a
super successful company with a selective hearing both to the inside and to the
outside. (More negative opinions right from the shop floor or falling back on them
are telling the story of poor floor first line management, a regular negligence of
gemba standards etc., which balances the laudatory tone of authors and executives
with regard to NUMMI, already closed,8 to the TMMK, Georgetown facility, the
8
http://www.popularmechanics.com/cars/a5514/4350856/
oldest of still operating hybrid units of Toyota,9 to Toyota’s French operation in

Valenciennes,10 and to Toyota among several more Japanese owned companies
across Latin America.11 These cautionary and yet mostly constructive opinions
should not be surprising however, in view of many other indications of system
erosion. That how long this decline dates back it is hard to judge but various sources
trace it to quite some time ago.12)
What is probably the greatest, unassailable significance for industrial

learning in the Toyota practice is the company’s understanding of its own
DNA as an intertwined value creating structure of the people and the
product flows. More than anything else it is this that makes Toyota what
it is (or what it is supposed to be). The Toyota learning process is
(continued)
9
ibid.
10
“Employees are governed by fear, fear of failure, fear of disappointing their hierarchy, fear of
broken careers, and fear of undeployment.” (Kobayashi 2009, 74 %).
11
Yamazaki et al. (2013).
12
Cf. with a book review of Liker’s Toyota Way published at amazon.com, quoted verbatim. “This
book outlines many fine principles that Toyota Motor Corporation used to build this company.
However, if Dr. Liker had devoted an extensive period of time in the Georgetown, KY facility,
TMMK, where I’ve been a Team Member for 13 years, he would have gained a better perspective
as to how the modern Toyota system operates, quite unlike the blueprint outlined by this
company’s founders. Quality is not the same as it was 10 years ago and cost cutting is the flavor
of the day. Our workforce consists of a large percentage of temporary non-Toyota employees,
many who have been here online for over 4 years. We have not earned a J.D. Power award in a few
years either. Mr. Convis, who authored the forward, is the President of TMMK and has recently
been engaged in thwarting a union movement by nearly 40 % of the regular Team Members. In
short, Dr. Liker’s failure to extensively study Toyota in action in todays environment failed to
appreciate the notion that the 14 principles are ideal, but only if practiced. I welcome anyone at
Toyota to prove me wrong. I will say this: When Mr. Cho opened this plant back in 1988, we were
a much better run organisation and we earned many J.D. Power awards because the environment at
that time was the application of many of these 14 Principles—not so today. I believe the author
should rethink the way he writes his next book—this one isn’t accurate and the reader is being
misled if he or she thinks that Toyota adheres to this philosophy.” http://www.amazon.com/
review/R1709PSRQ6IXKN
For a balanced view the read may consider Jeffrey Liker’s response: “I wrote Toyota Culture
with Mike Hoseus who worked in the plant for years and we have detailed accounts of many fine
team members who appreciate working in one of the best run plants in America that kept them
employed even when they were not needed during the recession. We also point out there have been
ups and downs in the plant, like any other, but the average is very high. They did develop team
members and leaders to a great degree during the down time of the recession and there was plenty
to learn as there always is and always will be. For many accounts by many team members who
appreciate what they have seen: One Team on All Levels: Stories from Toyota Team Members,
Second Edition.” (ibid.) In sum, there is room for improvement in Georgetown, even for its long
past (est. in 1988) among similar hybrid plants. The system itself does does vouchsafe for anything
unless backed up by proper leadership.
74 4 The Toyota Way
certainly peerless “on the management market,” yet it is fair to say it is

also the company’s bottleneck. To be sure, unless this learning process
finds a sustained momentum to pervade and control the whole system,
glitches, flaws, and some more serious dysfunctions will happen. And
they do happen. Toyota as a learning company is a notion that equally
deserves praise and criticism.
The learning process is meant to allow for Toyota to select quite ordinary
leaders-to-be and develop them into adequate leaders, just as I claimed very early
on these pages when trying to dissolve the myth of the hero CEO. However, if the
learning process is underperforming and cannot fight downright arrogance because
arrogance is at least as much constitutive of the culture as respect and kaizen, then
the development of leaders suffers a setback, the learning system falls back to
functional learning at best (within what is a rather broken training universe at
Toyota), and nothing can, paradoxically, tear out the company from its increasing
inertia than a new hero CEO launching the leadership process anew.
To reliably develop even the best characters into upward spiralling leaders you
need a system whose “story” above all is consistent with reality. Such a character
(“morality”) of the system and its leaders are co-dependent. Once torn apart in
quality credibility begins to sink within the organisation and culture finds itself on a
slippery slope. An average leader just cannot imagine how much damage this
process can bring—in numbers as well.
An ordinarily “moral” leader can work well in a “moral” environment only.
Understood as a culture whose reality and propaganda aspects are increasingly
bifurcating at any point of time and/or there is a structural inconsistency somewhere
on its development curve, a corrupt culture is hard to rectify but then it does need a
sort of hero CEO to do that, a sign of demise in itself. Better no one gets there, into
big turnarounds and crisis management situations. Better seek a “boring” learning
culture that we used to think Toyota was.
Successful turnarounds are hard to find because, to loosely put up a sequence,

stabilisation (transparency and big waste out), sustainment (mostly capabil-
ity building), and continuous improvement (the working of the learning
system) are in need of entirely different leadership strategies and
personalities, and it is very rare that the same leader in the same continuum
and sequence of time is fit for all of these. Also based on our previous
examples throughout this book, while top-down centralised stabilisation,
whether by management by objectives, point kaizen, or technological leader-
ship, is a Western virtue par excellence, very few Western leaders can move
their companies into the sustainment phase, and no one whom I am aware of
has created a true learning organisation at least approximating let alone
superseding even the Toyota we know.
Part II
Building a New Framework
5
5.1 Reconstruction and Reproduction
Let me quickly make stock of what we have learnt so far about the positive side of
an alternative management philosophy.
1. All continuous improvement (CI) programs start with executive action and make
claims for effective leadership to pick up.
2. The ultimate carrier of CI is the company culture whose transformation is the
sole guarantee of organisation-wide, sustained improvement.
3. The ultimate test of executive leadership is its ability to disperse and saturate the
organisation.
4. Leadership is purposeful and this purpose in business is the continuous improve-
ment of corporate capabilities.
5. The dispersion of leadership (in the interest of the biggest possible stability of
continuous improvement) cannot happen without systemic kaizen practice tak-
ing roots at the same time.
6. The best known scenario of leadership dispersion and CI is Toyota’s double
helix of people and product improvement. It is rightly assumed that leadership
impinge on people first and that TPS is a human system.
7. The constant pursuit of excellence (or the cultivation of a character) is a moral
choice by persons, individual and corporate. Accordingly, a CI or learning
company represents the morality of excellence in time, the latter boiling down
to maximum value creation in the balanced view of the stakeholders. Waste in
general and the wasteful utilisation of time in particular are indicative of the
lack, the deficiency, or a damage of the character of the company. Also, waste
and its metrics are always reflective of something more fundamentally deficient
at process and/or system and/or the people’s level.
8. Any alternatives to systemic leadership and the constant pursuit of excellence by
joint people and product development driven by a moral code are bound to fail
(underperform). So do personal (hands-on or command) and technology (on- or

78 5 Building a New Framework
offline) control, or acontextual cultural transplants. Companies of the latter types

will always fall short of maximum value creation for their communities, some-
times inadvertently, other times blatantly deceiving them whilst serving their
own short-term interests. Indeed, capitalism without morality can only work
suboptimally, i.e., fall short of maximum value creation and utility.
9. Companies can only be taken to dependably follow an ethical practice if the
character of excellence and the values in definition of excellence drive a culture
of continuous improvement. Mere written codes of ethics are fallible, useless,
indeed amoral.
Please note that beyond this summary the forthcoming section (Sect. 5.1) is
going to be rather abstract but also safely omissible without threatening the
understanding of the book’s intent. My reader is welcome to jump to Sect. 5.2
directly within the present chapter.
The lessons learnt from past and contemporary failures (underperformance) one
the one hand and the actual transformation of any given environment on the other
are at two different levels of understanding. The former does not lead to doing,
while the latter can. The elimination of the disconnect between reconstruction and
reproduction following from the unavoidable uniqueness of every organisational
practice typically falls into pieces already at the mental (reconstruction) stage. That
the (mental) “re-constructs” will never be the same as the constructs after which
they are modelled and the latter therefore cannot even come close to be re-produced
(in practice) is explained by the uniqueness of organisations as living systems
evolving through time in trial and error situations even though they are following
some generic design. While the construct might seem appropriate for a purpose,
much like TPS seemed to be for Lean enthusiasts, the re-construction can never
properly happen. Many of the visible tools and practices can be mastered, yet none
of the underlying learning, values, cultural artefacts etc. could possibly be
appropriated, and as a result re-construction itself would always be faulty and
defective. The capability of an organisation is always much more (or much less)
than what is up to be deciphered, decoded, measured, and checklisted. So have
Western Lean companies never come close to properly understanding the Toyota
Way let alone reproducing it beyond the visible tools.
Let us suppose for a while that mental reconstruction or understanding has been
successful. Even then, however, the practical reproduction of the “re-construct”
will need to follow the exact same evolution (timeline) to be able produce the same
effects, which is an absurd claim in itself.
It is, in short, not a particular organisational practice that needs to be
reconstructed and reproduced but its underlying purpose and/or its philosophy,
i.e., operational excellence through continuous improvement and the respect of
people in the case of the Toyota Way, to find the direction to the True North. The
relentless zeal for improvement can subsequently be expected to select the right set
of tools in the context of the values and attitudes characteristic of the company.
Also, while learning by doing seems to be an appropriate strategy for the small
scale appropriation of practice, it cannot be the framework of wholesale
5.1 Reconstruction and Reproduction 79
transformations equal to reproduction. Learning by doing is certainly a more

powerful practice than mere learning for doing (mental reconstruction) but not
powerful enough for full-blown transformations of practice (organisational repro-
duction). Learning by doing (learning what? doing what?) makes sense only once
the culture has already selected the True North to be its magnet point but prior to
that a transformation framework needs to be found to put CI in place as a system
within which learning by doing and incremental improvement can meaningfully
happen. In fact, what is learning by doing at the micro level is (reconstruction by)
reproduction at the macro level except that the uniqueness of any transformations
will reduce “reconstruction by reproduction” to (transformative) production.
At this stage it must be clear that looking for a framework of (transfor-

mative) production is the same as establishing a framework of systemic
CI (learning by doing), with the generative principles of transformation
finding their place as the general principles of CI, constitutive in both
instances of the respective sustainable practices. Without the generative
competence of general principles the latter can never be reliably
identified as constitutive. Similarly, if a continuous improvement strategy
fails to draw on principles with true transformative power CI (learning
by doing) will never pick up. Transformation (implementation) is foun-
dational to systemic continuous improvement (learning by doing) in the
sense that the former (the “becoming” layer) creates the latter’s sustain-
able, reflective, all-encompassing context (the “is” layer), that is, far
beyond a mere ad hoc inventory of to-do’s; moreover, the relationship
of the two is not only transitive but also complementary. Transformation
will open the grounds for continuous improvement and will, in turn, be
reinforced by it. In fact, without the reinforcement received from CI, i.e.,
without the generative principles of transformation finding their place as
the general principles of CI (learning by doing), transformation will
remain at best a one-shot OCM program without sustainability, like so
many do. Indeed, in any sustainable framework the logic of implementa-
tion (or creation, or production, or transformation) must be inherent in
systemic CI as much as learning by doing (equal to the Toyota DNA of
coterminous people and product development) is an attribute of (trans-
formative) production, or systemic implementation.
The principles of implementation and of continuous improvement need to be the

same in their crucial aspects in order to act as the sustained drivers of production.
Our call for the systemic, coherent, and self-reflective nature of both is in direct
relationship with the findings of cybernetics (the study of artificial automatic
regulatory systems) on the one hand and the evolutionary theory of organisations1
1
http://dimetic.dime-eu.org/dimetic_files/DosiMarengoOrgSc2007.pdf
on the other (Griffin 2002; Linstead and Linstead 2005; Uhl-Bien and Marion 2008;
Bellgran and Säfsten 2010; Grabot et al. 2014).2
Standard leadership and CI theories confuse “becoming” (cause) with “is”

(feature). The principles behind the former amount to answering the
question why organisations will undergo or accept positive change in the
first place in which case the principles will act as sufficient reasons for
change and will be stable if linked to CI (learning by doing). Standard
theories, on the contrary, enumerate principles or features that are pre-
sumed to be characteristic of leadership (or CI) but may not act as sufficient
reasons for CI.
The “is” theories of leadership of Jim Collins (2001), Collins and Porras (1994),
John Adair (2009), John Kotter (1996), Larry Rubrich (2004), Chris Argyris (2010),
and van Gorder (2014) among others are handy examples for serving the command-
and-control type of leadership that might be powerful enough to vindicate them but
even then their cultural transformative logic is gravely missing. At the same time
Jeffrey Liker (2004), Liker and Hoseus (2008), Liker and Convis (2012), Peter
Senge (1990), and Senge et al. (1999), and arguably Mike Rother (2010) and
Jacob Stoller (2015) are notable exceptions to the dominance of “is” theories. What
makes the latter different, in brief, is their attempt, through the reflective unification
of the people and product value chains, to establish and stabilise the continuous
improvement process.
A proper leadership theory to the effect of producing the right sufficient reasons
for change cannot do without a more generic understanding of transformation in
which leadership plays a role but is not coextensive with. [Wherever it is thought to
be coextensive, as we saw in the case of kaizen event based leadership initiatives, it
fails the cause of sustainable systemic transformation. Alternatively, confer Charan
et al. (2011) for a good intentioned but inadequate leadership theory in the “learning
for doing” style whose inadequacy results from its departmentalised HR-focus and
the consequent lack of integration with CI.] Standard leadership theories do not tie
in to anything more generic and as a consequence they not only remain descriptive
and transient about their inventory of leadership features but, more importantly,
they also free float without a compelling explanation why (cultural and
organisational) transformation or (transformative) production should take place
at all.
2
http://citeseerx.ist.psu.edu/viewdoc/download?doi¼10.1.1.405.618&rep¼rep1&type¼pdf
5.2 Productive Individualism 81
5.2 Productive Individualism
As we have seen, in crucial aspects of its company competence Toyota falls back on
the cultural heritage and skills of the Japanese society. It is this backdrop of the
Toyota culture that creates the context of both understanding and motivation for
Toyota employees in Japan (but not so much outside). What we identified above as
the critical advantage of Toyota over its rivals in terms of philosophy, principles,
and practice, has no reflection in the Western societies. Western companies never-
theless either still toy with TPS in one way or another instead of reconstructing,
developing, producing, and promoting their own cultural context, or, alternatively,
the context they create and we briefly explicated above is unable to establish a
continuous improvement practice.
The theorists of the Toyota Way starting with Ohno, Shingo, Imai, and compris-
ing additional less famous but thorough authors by the dozen (Harada 2015;
Monden 2012; [Nakao] Emiliani et al. 2015; Mika 2006 etc.), fail to grasp
let alone explicate the base carrier behind the Toyota story which is neither respect
nor continuous improvement, which are principles, but culture itself. Some of them,
listed and not listed, might eventually fail because they are so much part of this
heritage. The Japanese culture is the context within which the Toyota philosophy
can make sense at all beyond partial reconstruction. The traditional culture of the
agrarian society, of self-reliance, of collectivism, of kaizen etc. is the totalistic
construct which provides the context for both understanding and action and without
which much of the social practice including the corporate practice of Toyota loses
its true meaning.
The practical philosophy of Toyota is nothing short of a condensed,

concentrated, hypertrophic representation of a way of life. It is a moral
code in the broad sense, distilled from society and lived to its utmost, and
as such it is also the necessary component, even if not the sufficient
reason, of positive change and continuous improvement at Toyota. It
becomes a sufficient reason with the extra effort expended on bringing
the DNA out to life.
This moral code represents “the way we live here” but it is also a statement of
excellence about how to live the most valuable life possible (in the service of a
higher end) including the tenacious journey to the right principles and standards to
help everyone live this life, the practice of exposing waste and underlying root
causes smearing this life, and the identification and the construction of the right
tools to effectively expose waste and attack the root causes of waste. This is a
generic social and educational platform which found its way right into Toyota and
gained a new traction there.
The comparable moral code of the Western way of life used to be what we
may call the individual self-actualisation in attaining human excellence.
It goes back to the ancient Greeks, subsequently coloured by Christianity,

humanism, liberalism, the classical conceptions of capitalism, and fed by many
more streams of thought maybe of lesser calibre. I say it “used to be” a moral code
because egotism and the rise of mass societies have so effectively debased this ideal
that barely anybody could reconstruct it now. Yet, this is precisely where we can lay
our hope. We—or indeed anyone deeply associating themselves with this ideal—do
not need to reconstruct this ideal to be able to live by it. We can still produce it
without reproducing it, it is still ingrained in us, it is still in the cultural artefacts we
are surrounded by, it is still a living heritage—only we left it behind some time ago,
quite ludicrously, as an ideal. We are still, in short, within this tradition. We need to
return to its conscious application if only to save our chances for continuous
improvement in the corporate world. With a wholly rational choice as it is business
could nonetheless help society, too, to find its way back to excellence and morality
in time.
My argument for the moral code of individual excellence is not a call for
moralizing. Once my reader has got through this book to this stage they
will recognize the need for a platform of continuous improvement that
none of the approaches recorded so far quite fully satisfy, pushing the
epitomic companies of diverse leadership and CI platforms into serious
productivity losses. The argument for individual excellence is nothing
less than the corner stone of corporate excellence, irreplaceable by
technology or command leadership, not even by team based kaizen,
and a like moral code is in the interest of any businesses pursuing
excellence.
Kaizen events in as much as they are reduced to Toyota style teamwork or to top
down change initiatives such as discussed in the previous pages are all antithetical
to our basic inculcation, ethos, and way of life in the Western world. Not to consider
this fact is silly and counterproductive. Disciplined individualism fares the best at
some of our tech leaders like Google and Facebook, in a lot of R&D companies, at
start-ups, or in elite investment firms; and we have no reason whatsoever to negate
it in an average or mass production environment as long as a proper organisational
practice is put behind it. As pointed out in the Introduction to this book the
regulation fallacy of organising around assets does not even follow from the
(false) value preference of assets over people. Indeed, the value of assets could
augment with a regulation environment designed to fit the higher needs of the
people, in the service of the latter’s priority in joint people and product
development.
5.2 Productive Individualism 83
The dominant Western egotistic mindset, having conquered the once

individualist drivers (self-actualisation above all) of the spread of this
civilization, is telltale of a DNA in which people do not even feature other
than in a relationship of subjection, while assets and the management
mindset dominate. It is this perspective that separates the Western
management of waste from Toyota’s contempt of it. We manage waste
instead of eliminating it at its very roots as far back preferably as its
cultural and mental backdrop.
Despite the putative rationality of this argument so little is done by so few in the
corporate world to prompt us back to the right track. I strive in the rest of this
argument to present a framework making up for the lack of means we have, indeed,
suffered from, promising to make such a switch transparent, speedy, and
sustainable.
A New Framework
6
6.1 Individuals are the Key
6.1.1 A Summary Chart
The active factors we have considered so far when examining past organisational
failures (underperformance) include leadership, technology, processes/streams,
systems, teams, and culture. Let us observe their relationship in the respective
attempts at developing CI strategies (Fig. 6.1).
This schematic chart summarizes our key observations in the span of a putative
change (implementation) process. What it tells us is that there is obviously quite
some variance in the strategic design, whether implicit or explicit, of how change is
meant to be exercised and sustained. The reader can notice a few points of interest
as follows while observing that the practices are invariably deficient, exemplified
by the empty boxes, and broken, what regards the bifurcation of the carrier and
object functions specifically at the level of culture, and as such they are incapable of
serving as CI strategies.
(i) One is the kinship of command-and-control and OCM strategies, deeply

rooted in top-down, mass and silo mentalities (cf. their Leadership, System,
and Team functions).
(ii) Another is the dead end that “kaizening” represents in the mass conversion of
companies due the inefficiency exemplified in its incapability for joint system
and culture creation.
(iii) Then that there are some key missing links within each platform (indicated by
the empty boxes) that betray a typical failure to connect the omnipresent
leadership to system and/or culture at the carrier level. (Interestingly, kaizen
and XPS’s fare the worst in this regard due to their often blind, acontextual
pursuit of TPS, successfully objectifying culture at best.)
(iv) Teams are objectified almost everywhere instead of acting as drivers of
change, betraying a proclivity for loss in the dominant logic.

86 6 A New Framework
OCM Spot Kaizen C&C (Ford) XPS TPS

Leadership Driver Driver*/ Carrier Driver Driver Driver
Technology
standards
Driver Object Carrier Carrier Object
Process/Streams
standards
Driver / Object Carrier Carrier Object
System
standards
Carrier*** Carrier
Teams Object (oBM) Object Object (oBM) Object Driver
Culture** Object Carrier (CI)
*Together with a structural change into value streams and the appointment of front line leaders (Byrne 2013a, 34%),
** Culture meant as an all-encompassing, pervasive DNA; oBM = of behaviour management, CI = continuous
improvement***The carrier (of a culture) is the final possible achievement of a particular transformation process.
Fig. 6.1 Each one of the six active factors of the alternative CI initiatives may assume either the
role of driver (or initiator), or carrier (the chief renewable source), or object (that is, of improve-
ment) in the process. The characteristic of a true (reflective) CI culture should, by definition, be the
indivisibility of carrier and object
(v) Finally, individual team members feature nowhere.
What we do not have under any of these platforms is the systemic and continu-
ous improvement capability embedded across the organisations. As for these
transformation strategies, in short, we do not have CI built into any one of them
or into their pertinent operational practices.
6.1.2 Why Is the Western Tool-Focus Reductionist?
I would suggest a revised approach to deal with the issues above that massively inflict
incompetiviness and inefficiency to our CI potential, and deal with them instead in a
transparent, speedy, and sustainable manner. All in all, it is both the coherence and the
efficiency of transformation which is at stake; coherence as a strategy and efficiency as
an operarational practice, that is. What we have learnt among other things from the
Toyota Way and from the failures (underperformance) of their their spin-offs is that you
have to build on a prior culture to be able to excel, luckily representing a moral code (also
in the root of the future character of the company) and presenting us with the generative
principles of transformation. May I remind my readers once more that we are not on a
moralistic mission. To identify such a moral code and the concomitant generative
principles is the sine qua non of CI. Toyota has grown to be the undisputably finest
large-scale supply chain for the one and only reason that it has found, for all the hardships
of its actual practice, such a moral code and generative principles, i.e., in the culture of its
homeland and in a very specific understanding of kaizen, of the double helix format.
This then facilitated an experimental journey to its current quality of operations
(Fujimoto 1999; Liker et al. 1999). It was the morality and the principles first and then
the quality of artefacts; not the other way around like Westerners would like to believe.
My critique provided earlier about current practices allows me to safely assume
that the lack of an underlying morality feeding a few key, unshakable principles with
6.1 Individuals are the Key 87
transformative capacity makes no alternative of the “quality first” approaches. Quality,

that is to say, won’t knock on our doors without a formative cultural code to sustain a
proclivity for it. Without a deep-seated moral code “quality first” will end up as a
typical Western shortcut to results, an instrumentalisation of the True North mentality,
a quick fix to the value chaos just like “corporate social responsibility”, codes of ethics,
and value statements are. Total Quality Control (TQM), Ohno’s quality circles (QC),
or Six Sigma are the same tools of abstraction in Western hands, even at Toyota
daughters, from the only real stratum of quality at the cultural level as anything
(Kobayashi 2009). These tools can either focus the attention to culture by pointing
to the source of waste as does fever to infection but then the ultimate source will be at
the cultural fountain head, or they stop short of achieving a breakthrough to the root
cause and sink in finger pointing, dabbling, and cover-up. And, indiscriminately, they
always do the latter. Quality tools in Western hands are not only tools of reduction
(of root causes to their manifestations) but also of abstraction (from culture to artefacts,
under the guise of doing just the opposite by underscoring measurables and hard facts).
6.1.3 Natural Needs in the Root of the Revised Framework
So, you won’t get anywhere in CI unless you focus on culture. Now the question
remains how you get closer to this culture?
The underlying reality of the Western context (meant rather loosely) is moral
egotism with a reliable inventory of leftover skills and values originally born out in
the era of pre-mass society individualism. Individualism makes us capable of both
self-referential and other-regarding behaviour. It is different from collectivism,
with its vantage point firmly placed in the individual; individuals may freely
work in teams and as a team without working only for the team and, similarly,
teams or companies are never understood as corporate entities. Team purposes are
individual purposes combined and consolidated rather than purposes that precede
the individuals. Leaders acting to the contrary quickly learn the power of either
formal or informal resistance and loss of efficiency.
The best performing companies in a like milieu are necessarily those which can
harmonise company and group level goals with individual goals, or this is at least
that one would immediately adduce (Verbos et al. 2007). But this is not so simple.
Harmonisation is never a reliable while always a very sensitive process, and often
turns into a power struggle that damages not only efficiency but also falls short of
reinforcing the precept of individualism as a foundational value to protect. It is
therefore much more functional and more in line with the logic of transformative
generation and “generativity” as explained above to infer core company goals from
individual purposes and only add to them where the additions do not get into a
protracted conflict with the accepted idea of individualism. I believe that an
acceptable idea of complex individuality is found in Maslow’s pyramid of needs.1
1
http://psychology.wikia.com/wiki/Self-actualisation
It is apparent from this classic theory of individuality that group identity, respect
by the others, morality, purpose, and the exposition of inner potential are equally
part of the higher levels of individual needs, that is, the self-regarding and other-
regarding notions are in a complex array capable of establishing working
communities. Individualism as a moral, psychological, or culture theory is reflec-
tive of this theory of individuality or something very similar (Maslow 1968;
cf. Fowler 2014).
It is also apparent from Fig. 6.2 that the levels of belonging (group identity) and
esteem (respect by the others) are primarily the ones invested in the team based
concept of the Toyota Way, while the Japanese kaizen culture would not typically
progress so far as self-actualisation. Critics of Toyota complaining about “group-
think” often also mention fear, deference, peer pressure, and the lack of proper
reflection on group practice as the major drawbacks of team based kaizen. Indeed,
from “a human point of view, TPS should be seen as an institutionalized coercion
system,” with the teams in the very heart of the coercive practice (Kobayashi 2009,
73 %). The crises of Toyota, too, as analysed earlier, recurringly testify to the lack
of a balanced control mechanism over authoritative thinking patterns (arrogance) as
well as to the lack of appropriate means to dependably impugn the overcentra-
lisation of decision making.2 The phase of “check” in Plan-Do-Check-Act (PDCA)
eminently needs deep and free individual reflection on achievements and without
the sufficient freedom of the individuals (free also from the blunting aspects of
home culture) to confront reality, bosses, and peers, checking can hardly happen
systematically—or innovatively, for that matter. Toyota has also suffered, appar-
ently due to its fast growth, from inadequate hiring, training, and management in its
morality, creativity, acceptance,

self-actualisation purpose, meaning, inner potential
confidence, achievement, respect

esteem
of others, uniqueness, rights
intimacy, connection, family,

belonging friends, identity, groups
employment, property, social

safety stability, health, sustainment
breathing, drink & food, sex,

physiological needs
shelter, homeostasis, clothing
Fig. 6.2 The Maslow pyramid of natural needs indicates a scale of emergence from lower level to
higher level needs. Self-actualisation beyond esteem (achievement, respect by others etc.) is not
encouraged in the TPS milieu while singularly important in our own leadership and CI concept
2
http://www.eremedia.com/ere/a-think-piece-how-hr-caused-toyota-to-crash/
6.2 The Production of Improvement 89
hybrid companies, and when you have bugs in the long process right from hiring to
CI (PDCA), that is, along the whole of the people value chain, you will necessarily
end up in grave calamities before long. [A critical approach to the practice of
hybridisation is found in Boyer et al. (1998), a balanced tone is struck in Kawamura
(2010) and in Abo (1994), while largely conciliatory views are expressed in Liker
et al. (1999).]
Toyota’s great spiral, indeed Great Spiral, of national culture, double helix
Kaizen (DNA), Ohno’s two precepts (respect and kaizen), plus the inventory of a
few technical principles like takt, pull, flow, perfection etc. make up a formidable
armoury that has however recently broken down on apparent failures to disperse
leadership and embed systemic, all-pervasive kaizen, the way it was fleshed out
earlier. The Western concept of individuality can help us avoid these pitfalls of
groupthink and agression if properly structured and implemented in the business
environment. This is how I think it is doable.
6.2 The Production of Improvement
6.2.1 How Does Culture Work in the Interest of Operational

Excellence?
Our moral code says that the personal pursuit of excellence is an activity of the
highest order as it both actualises the best in a human being and promotes the well-
being of the community. Indeed the reason why we tend to praise (and not simply
respect) individuality is the concomitant freedom to live a valuable life by the
balanced standards of society. You can use your freedom anyhow (normally as long
as you do not harm others) but excellence has nothing to do with an egotistic way of
life; yet, individuality is more capable of excellence even whilst falling short of it. It
can always ascend or return to it via education, good examples, by good conscience,
benign peer pressure and like. The call for excellence is not only an invitation to
live valuably; it is also valid argument on the way to improving an organisation.
Anyone can say that they are not willing to make the most of themselves; but then
there are no justified, coherent grounds left for them to fight a company culture that
still expects them to do so. Egotism holds no valid argument for excellence.
Excellence reflects social appreciation. This concept of the ambition to excel in
eyes of the others is deeply engraved in the culture of Western individualism. The
pursuit of excellence requires a prior culture where this purpose or at least its
potential is rooted in, all pervasive, and/or consistently vindicated. The corner stone
of such a culture is individualism at its best and in order that this individualism can
leap forward in the interest of the larger community, in our case a business
community, it needs to become generalized across an organisation from being
generic at individual level.
Culture and values are the ultimate platform of improvement and the
strongest bulwark against acontextual behavioural change. While all of
the notable change methods in this text have called for intensive leader-
ship each falls short of directing leadership to the one and only opera-
tional strategy it should serve, i.e., to the transformative production of
the general principles of corporate cultures from the generic principles of
individual excellence. Instead, they attempt to constrain teams
(by behavioural management) into a doctrinal practice dictated by either
goals roll-down, or technology, or kaizen events, or their variable
combinations.
6.2.2 Behaviour Management is Suppressive
Behaviour management always hinges on standards whether financial (goals and

KPI’S), work (norms and procedures), or value (“ought to”) and the standards never
address the people (Turnipseed 2002). On the contrary, they are always asset-
oriented, instrumentalising people, the tension always remaining between
expectations and willingness to comply. The wildest dream of business to develop
a committed workforce from a complying one always ends with a sour awakening
to reality as long as the dream is not about people but about a condition resulting
from suitably manufactured behaviours. Behaviour management can try to be
totalistic within a closed system of top-down management that runs an
all-inclusive, hierarchical PDCA cycle, consisting of all the standards mentioned
above (financial, work, and value), but being a system of instrumentalisation and
alienation it necessarily kills the spirit of autonomous improvement. Very few
companies that realize this would admit to not only managing their people but
also to conditioning them, and what is the ultimate purpose of conditioning,
aspiring to change their attitudes and values on top of changing their behaviours.
Even so this is what they do. Admitting this would at least help companies realize
the futility of conditioning for a CI company.
You cannot condition people by system standards (financial, work, and

value) to continuously improve, you can only condition them to comply
with the standards. Improvement necessarily conflicts with management
by standards and you have ultimately to choose between them.
Improvement is about disrupting standards in the first place and unless your
system is about improvement rather than about standards your system will eschew
improvement. This is why culture needs to be about CI (individual and corporate
excellence), i.e., to be able to support a system of improvement.
6.2.3 A Revised Behaviour Management Framework
I can add by way of a short digression that whoever does not wish to go down the
road and put individual excellence and improvement (the relevant moral code) into
the axis of their management philosophy they can still take distance from pur et dur
management by asset-oriented standards and rather embrace management by peo-
ple standards. I offer a people-KPI system in the Appendix to this book that selects
an inventory of desirable management skills and measures them less in the HR and
more in the operational vein of management, i.e., repetitively and by connecting
them to “hard”, system KPI’s. If you install such a system of behavioural KPI’s and
you calibrate it to your own needs you will have an early warning system in place
that indicates cultural lapses in the organisation and warns of future erosions in
system capabilities, forestalling efficiency losses.
This system, in short, would expect the same questionnaire administered to each
an every manager in an organisation, every one of them evaluated by their bosses,
by themselves, and evaluating their subordinates (who would also evaluate them-
selves, and so forth). This will create a cross-organisational reflection on the same
set of skills and behaviours selected by the company according to its organisational
strategy. Every manager evaluated by their bosses and themselves according to the
questionnaire on a bi-monthly basis will also recurringly move into (separate) one-
on-one assessment sessions with their bosses (upwards) and their subordinates
(downwards) and compare self-assessments with assessments by superiors (that
is, in what is colloquially called a 180 format, to mirror the top-down mentality of
the companies in question). This repeated over some time, with the explanations of
individual scoring provided and the scores reviewed between any two individuals,
boss and subordinate, on a regular basis, the scores as well as the daily behaviours
reflected in the scores will start to converge on the perceptions of the final authority,
the CEO, sitting on the top of this evaluation system. The CEO, so to say, will draw
the organisation with everyone leveling up to the perceptions and expactations
created by their own immediate superiors, this going as high up as the CEO. Not
only behaviours but also attitudes will start to form in accordance with the
expectations of the CEO, and the company will ultimately level up to the CEO’s
behavioural objectives.
By administering the same behavioural KPI-system in the form of the

same questionnaire and method of evaluation to the whole managerial
body of the organisation, lower level managers will start to conform with
the expectations of higher level managers, their evaluation of their own
scores will increasingly reflect the evaluations by their superiors, the
scores will progressively enter into tune across the organisation, and
culture will comply with executive expectations.
With some luck, if the questionnaire was put together in consistence with system
needs, this culture will also be the culture that the attainment of Quality, Cost,
Delivery (QCD) goals needs. It will be part of the standardized goal attainment
mechanism but also reinforcing as such the system capabilities by providing a
cultural leverage to standardized goal attainment as well as an early warning
mechanism of system erosion and efficiency loss, this latter by virtue of the fact
that any prospective deterioration of system standards will show up in the deterio-
ration of behaviours much earlier.
Yet, such a closed and forceful system of conditioning will always be subject to
the perceptions of reality at the peaks of an organisation which is a sure way to
suboptimal organisational behaviour. I offer a different logic as follows to establish
a system of improvement as intimated above that would finally lead us to the
production of improvement as the chief productive capacity of a learning or CI
organisation.
6.2.4 The Production of Improvement as Opposed to Output
“Production of improvement” is a synonym for continuous improvement but it also

accentuates improvement as the chief productive objective of business
organisations. It is the same as “process instead of results” in the heart of the
Toyota practice, i.e., that rather than profit orientation it is improvement orientation
which once locked in the nerve system of for-profit organisations continuous
improvement can become a constitutive habit. When a company considers
improvement as the essence of its mission it will open up its practice for bigger
profitability; once, however, it forgoes improvement as its core activity either for
short-term operational objectives or for profit-making it threatens to undermine the
very profitability it should live on. Profitability rarely comes with profit orientation.
Profit is a by-product of continuous improvement and it is invariably the highest
when such a by-product.
The production of improvement is the core capability that an operations should
build on. What I am talking about is a shift in self-awareness from the emission of
products and services (output) to improvement in the forefront of actvitities. When
a company can say “I live to improve” rather than to make profit and satisfy the
shareholders, whatever it takes, with higher earnings per share; when it is CI,
instead of the mere conversion and money-making process, which is the basic
texture of a company, then a company can pride itself to have developed a
continuous improvement mindset. I know it requires at first sight the love of
paradoxes to draw the proper consequence from all the underperforming practices
we have covered and the many more we have not, yet the proper consequence is
this: you ought not in the first place to manufacture and sell cars or anything
tangible; you ought to “manufacture” and sell improvement. As an operational
practice your end product is not for sale; it is for you to keep: and it is the
continuous improvement capability of your company. A CI company is no longer
an auto, oil, or retail company—it is a CI company, with improvement for its own
sake, pride, and excellence in the first place.
While focusing on itself (hence continuity and reflectivity) CI promotes all the
rest of the objectives of “orthodox” business thinking—purpose, an adequate
operational strategy, customer satisfaction, market share, profit among them—
much more productively than “orthodox” practice does. But to achieve this the
“orthodox” practice of result, asset, and even process orientation needs to give way,
in a concerted, evolutive manner, to people orientation.
6.2.5 The Leadership and CI Principles
As I intimated above the corner stone of such a culture is individualism at its best
and in order that this individualism can leap forward in the interest of the business
community, it needs to become generalized across an organisation from being
generic at individual level. Individualism therefore needs to be not only elicited
but also structured, in the interest of broader objectives. Drawing on the lessons of
ciritical insights made earlier in this book I put forward the following definition of
CI leadership first. CI leadership is systemwide self-actualisation in problem
seeking and solving via teams.
As I have pointed out the missing link between CEO-level leadership and CI is
the systemic dispersion of leadership across the organisation; and we have also seen
how Toyota culture is anchored in Japanese soil and how the same embeddedness is
missing from Western companies or, on the contrary, disperse in OCM and
command-and-control change programs. The endogenous individualistic culture
as the ultimate carrier of CI on the one hand and systemic leadership as the driver of
CI on the other find their yet best expression in systemic self-actualisation in
problem seeking and solving via teams (SAPSST), self-actualisation meant as the
highest level in the pyramid of individual needs.
If we have a team of leaders each of whom finds self-actualisation their

ultimate goal and their self-actualisation finds its highest challenge, quite
naturally, in active problem seeking and solving then a whole group of
such leaders working through their own teams will create a CI environ-
ment in which the generic principles of individualism (natural or psycho-
logical needs on the one hand and the moral code embedded in the
individualistic culture on the other) penetrate the company culture,
transform it, and themselves turn into the general principles of
organisational development (the double helix of people and product
flow and systemic kaizen).
This is the leadership principle of a CI culture. But leadership is not there to act
instead of a CI culture, it is neither the carrier nor the object of it, only one of the
drivers, the other being culture in its alternative capacity.
From the leadership principle there follows the principle of CI. Leadership
(i) brings out the endogenous, underlying culture of a given nation, region,
or people, (ii) identifies the moral code (of excellence) in it, (iii) transforms
the moral code in a structured manner, by means of the natural need to self-
actualise, into the active people principles of an organisation (respect of
people and kaizen or perfection), and (iv) finally develops a practice of
applying these principles to the product flow in order to lock the CI culture
in value creation by means of the double helix of people and product value
chain.
In contrast to the Japanese culture the Western culture selects individualism as a

notion constitutive of group excellence instead of an object of permanent denial and
dissolution within the group. While the Japanese practice tends to run into a
widening gap created by the shift in societal values away from collectivism on
the one hand and a still robust, systemic motivation for groupthink on company
premises on the other, the Western paradigm of individualism, in harmony with
basic cultural experiences, can furnish a more coherent platform of the production
of improvement. While the previous is in a mode of disintegration (into revolting
atomism), the latter, if well conceived, can easily become an ideal mode of practice
integration (into corporate utility).
6.2.6 The Transformation Framework from Afar
The question remains as to how to use leadership as SAPSST in the development

process of (or transformation into) CI cultures.
For this let us have a look at the following graphics.
What we see here (Fig. 6.3) reflects an acceptance of the fact that major change,
especially of cultures and mindsets, cannot but happen gradually. This is a 7-stage
model of “becoming” utilising the generic principles of transformation, i.e., in
individual needs and motivation, and morality in time. It takes for granted that
whatever we need internally also motivate us in a very strong sense, therefore there
is a very high chance that we shall also want and act for it, and whatever, in turn, we
do not need cannot prima facie motivate us from the inside. In the latter case a
strong external trigger is needed instead to effect wanting, willing, and doing.
Maslow’s needs theory portrays a universal scale of (internal or natural) human
needs, presenting a strong case to want, or be psychologically constrained, will, and
act as needed unless prevented by a uniquely strong external countermeasure. This
countermeasure, however, cannot apply for too long without frustrating our human
THE DEVELOPMENT CYCLE OF WORLD CLASS COMPANIES
LEARNING DOING FOR

PEOPLE FLOW AD HOC LEARNING FOR DOING BY DOING LEARNING
LEADERSHIP AUTONOMOUS TEAMS

DRIVER MANAGEMENT
LEVELS OF
MATURITY
WITH LAPSES
1 2 3 4 5 6 7
PRODUCT FIRE FIGTHING BIG WASTE OUT ORGANIZE FOR ORGANIZE FOR ORGANIZE FOR REFLECTIVE
TEAM KAIZEN
FLOW STABILIZATION RESTABILIZE TECHNOLOGY PROCESS SYSTEM KAIZEN
(1) LACK OF (2) LACK OF (3) LACK OF NEED FOR CI NEED FOR A
SITUATION CHAOS BIG WASTE LEARNING CO.
STANDARDS STANDARDS STANDARDS PLATFORM
Fig. 6.3 The development of a CI culture follows a strict 7-step logic where progress is full of
lapses to earlier stages but no stages can be omitted. The DNA of a CI culture produced this way
has resemblance to the Toyota Way in its joint, reflective development of the people and product
flows, while it points beyond the Japanese context in its ability to stabilise Kaizen. Reaching the
final stage of reflective Kaizen the “delayed gratification” from individual excellence developed
through the proper learning system acts as a keystone of the CI structure. The proper direction of
learning is always toward its autonomy over, as opposed to its instrumentalisation by, doing
composition. You cannot take away food from any, shelter from most, and the
promise of self-esteem or self-actualisation from a lot of us without putting our
human composition at risk at more or less primordial levels.
6.2.7 Two Generic Principles of Transformation
I, therefore, consider our natural (psychological) human needs (the indicators of

humanness as such) and their corresponding power to motivate as one of the generic
principles of transformation within a social environment, business environments
included, the other being the potential striving for individual excellence that a
company can draw on and develop in each of its associates.
The twofold transformative power of needs satisfaction and potential excellence
presents an exceptionally strong psychological drive to change hitherto
unfavourable environments, unfavourable for needs satisfaction, while also ethi-
cally constitutive of individual, social, and corporate values and behaviours. Our
sense of ethics cannot be much estranged from our psychological texture but I do
not even mean the naturalisation of ethics by that (cf. D’Arms and Jacobson 2014).
In any normative morality how anyone “ought to” behave vis-à-vis the other has a
very strong foundation in the humanness of the other (Plant 1991, p. 207ff). You are
simply not expected to behave in qualitatively the same way to a tree or to an animal
as to a human being. As far then as humanness has anything to do with our
composition of natural needs, as described by Maslow, any other-regarding ethics,
as almost all are, has to take those needs into consideration. Hence morally sound
human beings ought to comply with what are at least strong, even though not
necessarily conclusive, claims imposed on them by the adequately formed needs of
their fellow humans. Adequately founded needs do not create rights but certainly
create very strong, generic moral claims whose ignorance can easily disparage
social relationships.
Needs justified as natural (psychological) needs by Maslow (cf. Fig. 6.2) seem to
be adequately founded in a certain view of humanness, whether Western or
universal. It is hard to imagine a moral choice in an one-to-one situation that does
not take heed of the other’s psychological needs, i.e., their prima facie way of
willing and living their humanness whether by wanting or being constrained by
natural needs. It does not mean that all the finesses of ethics including the
theories of needs, wants, willing, constraints, entitlements, rights, actions
etc. will not colour the specific situations in terms of what ought and ought not to
be done to the other. But neither the basic structure of ethical theories nor human
morality itself can fundamentally defy our psychological composition whether
fleshed out by Maslow and his followers or anyone else, not at least in our Western
cultures.
As I do not have any reason to diverge from Maslow’s teaching I can view
morality in this light, too, and consequently I cannot consider a corporate practice
ethical that does not fall back on the generic principles of individuality, needs in
particular, in the generation of its principles and practice of excellence. (Shallow
corporate policies and codes of ethics will be immediately ruled out by this
stipulation.) A company just cannot be excellent (constituted by improvement)
unless anchored in a putative thrust among its employees for individual excellence
which, in turn, is defined by self-actualisation, comprising morality, creativity,
acceptance, purpose, meaning, the exercise of one’s innermost potential, and so
forth. Again, this has nothing to do with moralizing and not so much with ethics
either. Rather it is the lesson of the frameworks of excellence on the market, and of
how excellence can be coherently conceived and implemented. CEO’s can pretend
that all these do not cling together and you need not make such a big fuss about it
after all, only go down the road, solve problems every now and then, and merrily
improve without the sleazy topics of ethics, especially if it aspires to become
pervasive, or of pscyhology, and indeed of an inadmissibly severe and tiresome
understanding of continuous improvement. (Note, accordingly, that it is quite
characteristic of wasteful company cultures to be equally wasteful of their internal
people flows and fraudulent with their customers, both demonstrative of their
deficient moral constitution. Our earlier examples are pertinent here.)
Well, certainly they can do that and thus dismiss a too demanding operational
strategy. In fact it is for the same reason that most of them bid farewell to the Toyota
Way or Lean very soon, and as I pointed out earlier, given the cultural demands the
Japanese management philosophy makes on them, it is not even irrational for them
to do so. However, the proposition I make is not irrational in the same way as the
alternative may rightly appear. My invitation will not be structurally inhibited and
disproved by the Western frame of mind; if declared irrational it will happen
because of a general dilapidation of the very mind and a loss of ambition to self-
actualise, whether for want of a need in the first place or for alternative wants that
defeat the hierarchy of natural needs. Once the beauty of the unison of psychologi-
cal, ethical, and business needs are understood it is, rationally speaking, only the
way of implementation that should remain to be solved.
6.2.8 The 7-Stage Transformation Formula
With the prime leadership behaviour defined as self-actualisation in prob-

lem seeking and solving via teams and the 7-stage scale above (Fig. 6.3)
we are getting close to the right principles of implementation.
At the product flow level on the figure above the reader may recognise a mostly
commonsensical stepup of an improvement program from complete chaos to the
system level and beyond. (This “beyond” will be explained below.) The more
progress we make on the scale the more expansive product flows we shall discern
and the more mature a company is. Companies adequately fitted with process and
system level standards are still fewer and certainly more accomplished than
companies working on their technology standards or stuck in the stabilisation
mode. What is important to note that none can jump stages, omit one, or proceed
in a reverse order. Lapses, slips, and rowbacks are quite possible and often happen
but not jumps or reverses. You cannot create a system level alignment of process
standards in the lack of firm technology and stream level standards, or without basic
stabilisation very early on.
As for the actual improvement what happens is that progress at one level is
reinforced by standardisation one level higher, and any advances at the former will
call for a re-standardisation at the latter, systemic progress done cyclically, in an
interaction of different, indeed of all levels. This “dance of change”, to use Senge
et al.’s (1999) famous phrase in a slightly different context, is a marked feature of
continuous improvement, yet, it is also for this dynamic nature of the interaction
between levels that standards by themselves, handed down from on high as tools of
command and control, will fall short of doing the job alone. You will also need the
cooperation of local teams and a pervasive, systemic culture of continuous
improvement to drive and act as a carrier of individual and team efforts, with
standards serving as signposts to notify the stakeholders of the as-is level of
stability. Unless work standards, norms, KPI’s etc. are considered no more than
an interim set of indicators of the stability of the system at any point and feature
instead, as in practically all cases do, as goals and deliverables, there is always a
clear danger that the CI process will fall captive to the command-and-control
mentality.
Whatever we would like to believe under the spell of larger-than-life CEO’s, in a
CI environment it is the pervasive CI culture (leadership spread out and
proliferating) that should drive improvement, not individual leaders. The latter
should facilitate the impregnation of culture with leadership by applying it to the
product flows and multiplying it stepwise, by the 7-stage process, infusing gradu-
ally the culture with the DNA of CI. Leaders should have in their focus the creation
of a CI organisation at their own levels, not the solution of stubborn problems and
sell this as CI. In other words, a CI company organises for improvement rather than
for standards, but the organisation for CI cannot happen without putting people in
the focus of the process, that is, facilitating the birth of a CI culture among them, by
them, and for them. This executive attitude is also the surest way to optimal
decisions throughout the organisation with the risks associated with over
concentrated decision making sufficiently contained.
As we move along the scale (Fig. 6.3) and stabilise what is ultimately the
production of improvement less and less waste will be built into the product. The
structure of improvement should be such that culture drives self-actualising
individuals and teams to look beyond the current standards at all points of time,
and whatever they can improve on their standards at a certain level in the
organisational hierarchy will create additional drivers for improvement
(i) downstream, (ii) upstream, and (iii) one stage up according to the figure. It is
not necessary that the identified improvements be realised immediately but it needs
to be done soon to keep up the CI momentum. The realisation of improvements
needs to be a joint decision of fellow leaders based on operational needs and based
specifically on the opportunities for leveling but that does not change the basic
mentality that standards are no more than interim signposts of the actual best
practices. This is the only way that a CI culture can be cashed across the
organisation, the CI momentum sustained, and the flow of improvement from
below secured.
If you look at the stages of the transformation process on the graphics above you
will recognise the process of the generic principles of change, i.e., individual needs
satisfaction along with the moral code of excellence, being built into the
organisation step by step and finally turning into the general principles of CI. As
I have already said the steps follow upon one another, omitting one will destroy the
whole edifice. But is is also logical this way.
6.2.9 Two Qualitative Transition Phases
Apparently, their are two crucial momentums in the process: the takeover of
individual leadership from the management mindset, and—following the dispersion
of leadership through stages 3–5—the transcendence of leadership from individuals
to autonomous teams (Fig. 6.3). As for the latter the interaction of the product value
stream with leadership can in ideal circumstances eventually result in the dispersion
of leadership as well as in the all-encompassing reinforcement of the CI culture to
such an extent that teams become capable not only of self-direction but also of
coordination among themselves. Losing its rationale in supporting the evolution of
culture by being built into self-direction leadership may gradually wither away or at
least yield most of its grip on the organisation. We can start talking about CI when
systemic leadership starts to give way to autonomous teams carried by the CI
culture to ever improving systemic performance, the first moves in this direction
noticeable as early as stage 3 or 4. The function of leadership between stages 3 and
5 is the nourishment of this cultural transformation.
As opposed to the general understanding of kaizen it should not ultimately be
taken as a token of capable leadership. It is the feat of the CI culture. While Toyota
oscillates between stages 5 and 6, and we are yet to see if it can find the means to
dependably link with stage 6 team kaizen, its woes also mean that its current ceiling
is team kaizen. The Toyota Way is marred by a portent proclivity for irreflective
groupthink and failing leadership at mid-levels, in the space between top-down
authority and team-level product value management. Not to be able to stabilise
culture on level 6 due to recurrent bugs in systemic leadership cautions if corporate
Kaizen can be stable at all in the lack of free individual critique of group practice. I
believe not. That is why I think, first, that you have to get to stage 7 (reflective
kaizen) to reach overall stability in any CI system, and, second, that the Toyota Way
can and need to be surpassed.
As for the replacement of management by leadership between stages 1–2 and
3–4 represented by the curves on the graphics it reflects a gradual and hard-won
shift of the corporate mindset from asset to people orientation. Most companies can
never transcend stage 2. They will always remain in a pre-CI stage simply because
they prove unable to produce that shift. Whatever they do under the aegis of Lean,
call it 5S, TPM, Kanban, they will always be drawn back to instability and growing
waste, and won’t even PDCA (maintain and improve) their standards with any signs
of consciousness at the technology and process levels. These fake Lean programs,
of which there are many, unfortunately ruin our consciousness of the need to
improve, cause a lot of frustration, and unduly reinforce the misplaced feeling
that it is irrational to walk the Lean path. To be sure, it is apparently irrational to
walk the Toyota Way. But it is not irrational to choose Lean and boldly look beyond
its current common practice.
The reader will understand by know that the 7-stage process comes with a much
needed, if cruel, awakening to the reality that unless you level up continuously to
the final stage, you will always firefight. You can and need to quench the fire
threatening the whole forest as you do at levels 1 and 2 but unless you move on you
cannot eliminate the fire completely; it will always be rekindled at some places in
your forest whether in the form of bushfires, smouldering ashes, internal combus-
tion, surprise volcanoes, you name it. CI is CI is CI is CI. When you start walking
you will either start nearing the end even if you will never reach it, or you will get
bogged down mid-way in pseudo-activities.
The freedom of structured, formative individual reflection on group activities

and a consequent aligned action to improve the product/service flow is the single
biggest value of knowledge based, ethical, and continuously improving companies
in any “mass production” environment, too. When we are talking about the produc-
tion of improvement this is where we want to go. It is no more difficult than doing it
all wrong.
We have seen, briefly, that the 7-stage improvement process and the core
principle of leadership as self-actualisation in problem seeking and solving via
teams can transparently lead companies to a reflective kaizen capability. It is
implicit in this suggestion that the principle mentioned and rooted in productive
individualism aligns with the target level (stage 7) and pulls organisational perfor-
mance through lower levels to the peak.
If leadership as self-actualisation systemically governs each turn of an

organisation’s development and at each level standards (signposts) are
continually passed to create a new opportunity for re-standardisation
across the system, the two boiling down to the DNA of joint people and
product development, the potential of reflective kaizen is always to
remain in a productive conflict with the as-is actuality of organisational
performance, and organisations will never reverse on the improvement
path. To be sure self-actualisation should be systemwide, leadership the
general principle of the system rather than individual competence, and
individual leaders at all levels should address the culture in order to lock
leadership in the organisation. Leaders should not lead properly
speaking—they should multiply and dissolve into organisation-wide
leadership.
6.2.10 A Learning System
The culture of individualism born on Western soil will consist of the fundamentals
of such a corporate culture, yet much like the relationship of the Japanese milieu to
the Toyota Way, it needs to be explicated and cast into a form of generative power.
The culture, that is, of excellence rooted in productive individualism, self-
actualisation, and critique has to find a framework of interpretation on the company
premises that contributes to its inculcation and helps ultimately the somewhat loose
societal values turn into and act as the generic principles of transformation.
This power of transformation takes shape in the learning process whose first step
is training. Toyota puts “learning by doing” into the heart of its training strategy.
Yet, we have seen, its learning strategy proved inadequate at times of fast growth,
or so they say. I believe that the shop floor practice at Toyota in strengthening the
DNA via team practice but undermining systemic CI culture at the same blow by
reducing learning to the gemba structures and forcing out the benefits arising from
both individual and systemic reflection, needs to be amended and forged into a
systemwide learning model. This has to have its basis in a training system. And that
training system will have to support the core leadership capability of self-
actualisation in problem seeking and solving via teams, to spread and permeate
the whole organisation.
To support such a leadership capability systemically implies that each and every
phase of learning from recuritment to rewarding needs to point to and serve this
understanding of leadership. Contrary to most training that is provided in the
corporate world the training system I am talking about is coherent and unified.
Most companies traditionally either provide, indeed administer, dedicated training
courses in the genre of “training for doing”, i.e., to help their associates to know the
technologies and run the assets (people included) more efficiently, or they furnish
general, non-specific knowledge with little or no practical value in the particular
environment. Either way, learning won’t cohere and the employees are generally
hard-pressed to find a common perspective in its turns. Training is project and asset-
minded, departmentalised, and the initiatives and modules are very rarely in
reinforcement of one another.
6.2.11 The Training and Workplace Coaching System
The training system I propose is of generative nature, serving the generic principles
of transformation.
The three legs of this training—indeed training and workplace coaching
(TWC)—system (self-actualisation, team practice, problem seeking and solving)
are already known to the reader (Fig. 6.4). It is less obvious perhaps that the
THE TRAINING BACKGROUND OF CONTINUOUS IMPROVEMENT
SELF-ACTUALISATION IN PROBLEM SEEKING AND SOLVING VIA TEAMS
SELF-FULFILLMENT A MINDSET FOR INVERTED REALITY DISPERSION OF LEADERSHIP

(THE SELF) (THE ENVIRONMENT) (THE OTHERS)
SELF-AWARENESS (SA) + REFLECTIVE (TECH-PROCESS-SYSTEM- TRAINING / COACHING

OBJECTIVES + PRACTICE CULTURE CRITIQUE) KAIZEN +
+ MENTORING
SA = KAIZEN TOOLS INC. LEAN +
PSYCH NEEDS + WILL + COMPETENCE (C) + GEMBA PRESENCE
C = IQ + EQ + SKILLS GEMBA PRACTICE
Fig. 6.4 Contrary to what most companies do the learning system should be about the direct
application of a specific training system (knowledge) to practice, sometimes practice reflecting the
need to make changes in the training setup; while, also, such a training system should be unified
across the organisation to be able to impregnate culture with the proper quality of systemic
leadership. This training system is defined, in turn, by the concept of leadership as self-
actualisation in problem seeking and solving via teams. All training modules henceforth support
this complex leadership skill as per this figure
referents of the three, which they point to, are the three parties to the world of
operations, that is, the self, the other(s), and the objective environment. The logic of
the TWC system reflects the continuous interaction of the three throughout the
transformation and CI process.
As the reader may have got used to it I am not going to take the chart into pieces
and explain the items individually. Other books with a more functional approach do
this with similar lists. Granted that I am not providing a step-by-step implementa-
tion method at tool-level it is not these explanations either that are going to justify
my approach. Rather, it is the coherence. Furthermore, I do not wish to define the
inventory of the items because while I believe that the one I present here is a
purposeful and good structure I can also imagine alterations made to it. What is
important is that its main thrust for the leadership principle (SAPSST) is kept and
reinforced by the functional modules of the training and coaching systems and that
the trainees are kept aware of how the modules are linked and serve the ultimate
purpose of CI.
I said earlier that the 7-stage improvement process and the core principle of
leadership as self-actualisation in problem seeking and solving via teams could
transparently lead companies to a reflective kaizen capability where “learning by
doing” is increasinly replaced by “doing for learning,” and the workplace becomes
a concentrated learning spot. The TWC system that has just been described is in the
trunk of the learning (CI) process and auxiliary to the theoretical (or generic)
principles of transformation, i.e., identified in the psychology of (natural) needs
and in the morality of individual excellence, turn into systemic CI.
That is, this TWC system is the backbone of the learning process without which
the spread of leadership and the consequent development of the CI culture cannot
be launched and the transformation from the generic principles of individuality into
the practical principles of CI cannot happen. Indeed I would advise that the
classroom training part begin weeks before the actual journey, to underscore the
significance of the TWC system in directing and bridging the development on the
one hand, and promoting the understanding of the full force of what people
orientation means on the other. Leadership has a constitutive function in bringing
out the production of improvement from the underlying cultural facts of coopera-
tive individualism but to permeate culture it needs the full force of organisational
learning, rooted in the TWC system. If properly applied to the product flow across
the organisation to create the learning environment TWC will elicit the final
principles of CI practice (Ohno’s respect and kaizen/perfection, or more technically
oriented ones like takt, pull, flow etc.) further in control of the so-called Lean tools
(5S, TPM, Kanban, and many more).
Likewise if we remember the earlier figure that compares the various attempts at
CI exposed in this book, we are aware by this time that it is precisely the individu-
ality component that is missing from all of them, and it is this component that can
only stabilise culture in its double function as the driver and carrier of CI. It is the
factor of stabilisation by virtue of securing the free alignment of the individual and
the collective purposes following from the latter’s dependance on the dominant
logic of individual self-actualisation.
6.2.12 A Complement to PDCA: The IARS Cycle
While the rise on the 7-stage process (Fig. 6.3) is happening with constant interaction
between the levels, the drive of improvement accessing from below to the top along a
signpost system of standards via identification, alignment, realisation, and
signposting (IARS), systematically backed and reinforced by the TWC system
(Fig. 6.4), with its ultimate focus on the people flow, is evidenced at the final two
stages. The evolution of people and product value capabilities through various stages
won’t end with the system stage. Indeed to stabilise systemic product value
maximisation the accession of stage 6 and the concomitant people value attained in
team kaizen is unavoidable, otherwise stage 5 system capability will break down and
the company will lapse back to the process level. It is only systemic kaizen that is able
to sustain CI at the system level, hence the assumption of the former’s pull effect on
the latter as well as its higher position in the hierarchy of change.
It is perhaps worthwhile to remember at this point that stabilisation at any stages
will only happen by the accession always of the level higher. Otherwise firefighting
persists. Nevertheless, it is not strictly speaking the levels higher that pull, as having
not been reached, they cannot pull. It is their perspective at any stages
communicated by the TWC system together with the urge generated by SAPSST
to look beyond any current standards that do.
IARS is as if a protrusion or a sub-cycle within the Do phase of the Standardise/
Plan-Do-Check-Act (S/PDCA) cycle. It is the latter’s missing link to a perpetual
systemic push for improvement by way of “looking beyond” goals and standards,
aligning the identified opportunities systemically, and signposting the newly devel-
oped level of performance. Formally speaking this is where “revision” in the title of
this book kicks in. But, obviously, a lot had to be covered before we have reached
this point (Fig. 6.5). IARS at the same time cannot substitute for PDCA, not at least
until stage 7, as the leadership drive is crucial along the built-up. It might happen, if
rarely, that teams need new goals and standards set for them higher up, mainly in
times of major organisation wide change, kaikaku motions, systemwide
reconciliations, or sporadic deflations of the kaizen impetus. These are, however,
not only infrequent but should stay so for the sake of the CI culture.
Fig. 6.5 The PDCA-IARS

twin cycle secures the flow of Plan/Standardise
bottom up improvement
within CI systems
Idenfy
Act Do
Signpost Align
Check
Realise
6.2.13 The Rise to Stage 7 is Preferable
What is still additional to this picture, is that teams cannot guarantee CI either.
Getting bogged down at team level will from time to time invoke the danger of
authoritarianism, groupthink, and peer pressure. The logic of TWC will reach its
final accord with practice once we can rise from stage 6 to 7 and individual
reflection on team kaizen will support the effective functioning of teams. That is,
without accessing reflective kaizen there is a danger that team kaizen breaks down
and an organisation slides back to system level just like Toyota has been
exepriencing ever since its journey began. But this is precisely why Western
individualism, properly structured for business pruposes, can finally turn out to be
more productive than any initiatives based on more collectivist kaizen grounds.
Remember, however, that individualism cannot attain productivity unless attained
through the previous stages of learning. There is no productive individualism, only
egotism, without education and learning in teams. Contrary to the general belief
individualism is the result of hard work and discipline rather than something given
in personhood (Brafman and Beckstrom 2006). TWC along SAPSST brings it out
from the depth of our culture, now covered with thick dust, but the process leads
through all the stages along the scale with no skips and reverses.
The TWC system should apply to the CI process already at the recruitment stage
of the people flow. Recruiters should fall back on tools that dependably select future
employees with equally high self-actualising, problem solving, and cooperative
attitude. These should be the most important traits they look for and all the rest of
the, so to say, traditional interests in communication skills, work ethics etc., should
be moulded to this viewpoint. Once our compass securely points to the True North
it should not be very difficult for our HR department to develop the pertinent
methods of appraisal, evaluation, and testing.
6.3 How to Go About It
The way to a CI culture leads from the psychological and ethical precepts through
leadership as SAPSST to TWC and its application to systemic practice along the
7-stage learning process, the latter in turn selecting the right principles and tools of
the gemba practice. These principles and tools may not necessarily be exactly those
that TPS and Lean have developed in the world, so in this sense, too, it is not a bad
idea to look beyond Lean.
I suggest the following order of practical to-do’s in building the CI impetus.
1. Design of a recruitment, training and evaluation plan according to SAPSST,

continually monitor and improve them.
2. Establish and develop a guiding coalition around the CEO with an eye on the
members’ SAPSST capability. Define values in conformity with SAPSST and
operational strategy.
6.3 How to Go About It 105
3. Assess/measure organisation wide as-is performance and rough waste per

technologies, processes, and at system level. Deploy value definers and new
(semi-stretch) goals.
4. Drive big waste out prior to introducing the new regime, reorganise if needed.
5. Start and continue training according to SAPSST as a joint exercise of HR and
operations.
6. Create technology standards where missing (stage 2 stabilisation and
transparency).
7. Start and continue workplace coaching.
8. Identify the key operations principles (like takt, pull, flow, or alternatives) and
pertinent tools (QC, 5S, TPM, VSM, cells, visual controls, A3, 5 Whys, or
alternatives).
9. Disrupt and improve standards, IARS them (work standards, tools, and metrics
alike).
10. CEO is to continually monitor the spread of leadership capabilities via TWC
practice, metrics, and interviews; evaluate, praise and reward across the
organisation.
11. Continually step up systemic alignment on the 7-stage scale via PDCA-IARS
(kaikaku and kaizen).
12. Reinforce individual reflection on organisational and team practice. Develop
new tools if needed.
For the technicalities of shop floor tool implementation the combined use of
Liker and Meier’s Toyota Way Field Book (2006), Goldberg and Weiss’s Lean
Anthology (2014), Ortiz’s Lessons (2008), Bicheno and Holweg’s Lean Toolbox
(2009), Rampersad and El-Homsi’s Lean Six Sigma approach (2007), and Nicholas
and Soni (2006) seems to be the best selection, probably with the parallel use of
two. Note however that my own framework still falls out with their logic of
implementation in key respects even if we discount their indifference to a founda-
tional philosophy of management. To stay coherent, I would therefore advise the
practitioners to restrict themselves to tool usage as far as these resources go. The
disregard of philosphy and coherent principles in a haste to early wins backfires and
CI will collapse before it could have taken off.
For all intents and purposes, if there is one success story of the old TSP/Lean
genre that comes close enough to my understanding how to build an excellent
company it is partly in the description of the (now defunct) NUMMI experience by
Adler (1993), with the upshot as follows: “Interviews with NUMMI team members
suggest, in fact, that this whole historical accumulation of assumptions obscures
three sources of adult motivation that the NUMMI production system successfully
taps into: First, the desire for excellence. Second, a mature sense of realism. Third,
the positive response to respect and trust.”
Well said, I believe. And certainly a production system of this nature could not
be denied a role in the spectacular cultural transformation of the old, run-down
Fremont plant of GM into one of the most efficient car makers in the industrial
history of the United States of America, interestingly enough, under the aegis of
Toyota but on the land of individualism (Knights and Wilmott 2007, pp. 127–128).
As a transformation process, moreover, considering its speed, transparency, and
potential sustainability, it arguably outdid its parents on Japanese soil, too (Adler
1995; Brafman and Beckstrom 2006, esp. 159–178). However, as I intimated
earlier, while the description seems to be in line, the practice at NUMMI was still
controversial that bids caution (Rinehart et al. 1997, p. 125ff; cf. Shook 2010).
Conclusion and Practical Benefits
7
1. The leadership principle: CI leadership is systemwide self-actualisation through

problem seeking and solving via teams. If we have a team of leaders each of
whom finds self-actualisation their ultimate goal and their self-actualisation
finds its highest challenge, quite naturally, in active problem seeking and solving
then a whole group of such leaders working through their own teams will create
a CI environment in which the generic principles of individualism (natural or
psychological needs on the one hand and the moral code embedded in the
individualistic culture on the other) penetrate the company culture, transform
it, and themselves turn into the general principles of organisational development
(the double helix of people and product flow and systemic kaizen).
2. From the leadership principle there follows the principle of CI. Leadership
(i) brings out the endogenous, underlying culture of a given nation, region, or
people, (ii) identifies the moral code (of excellence) in it, (iii) transforms the
moral code in a structured manner, by means of the natural need to self-actualise,
into the active people principles of an organisation (respect of people and kaizen
or perfection), and (iv) finally develops a practice of learning (CI) by applying
the above people principles to the product flow (the DNA of people and product
value chain), as per the 7-stage process. The way to a CI culture leads from the
psychological and ethical precepts through leadership as SAPSST to TWC and
its application to systemic practice along the 7-stage learning process.
3. Some notable lessons of the 7-stage process include:
a. Unless work standards, norms, KPI’s etc. are considered no more than
signposts (an interim set of indicators of the actual stability of the system)
and feature instead, as in practically all cases do, as goals and deliverables,
there is always a clear danger that the CI process will fall captive to the
command-and-control mentality.
b. Most companies can never transcend stage 2.
c. Unless you level up continuously to the final stage, you will always firefight.

108 7 Conclusion and Practical Benefits
4. If leadership as self-actualisation systemically governs each turn of an

organisation’s development and at each level standards (signposts) are continu-
ally passed to create a new opportunity for re-standardisation across the system,
the two boiling down to the DNA of joint people and product development, the
potential of reflective Kaizen is always to remain in a productive conflict with
the as-is actuality of organisational performance, and organisations will never
reverse on the improvement path.
5. A training system will have to support the core leadership capability of self-
actualisation in problem seeking and solving via teams, to help it spread and
permeate the whole organisation. TWC added to SAPSST enacts productive
individualism across the culture. Contrary to most training that is provided in the
corporate world the training system I am talking about is coherent and unified.
The three legs of the training—indeed training and workplace coaching
(TWC)—system (self-actualisation, team practice, problem seeking and solv-
ing) are reflective of the leadership principle. The TWC system that has just been
described is in the trunk of the learning (CI) process and auxiliary to the
theoretical (or generic) principles of transformation, i.e., identified in the psy-
chology of (natural) needs and in the morality of individual excellence, turn into
systemic CI.
6. (i) TWC properly applied to the (ii) product flow across the organisation (iii) to
create the learning environment will elicit (iv) the final principles of CI practice
(Ohno’s respect and kaizen/perfection, or more technically oriented ones like
takt, pull, flow etc.) further in control of (v) the so-called Lean tools (5S, TPM,
Kanban, and many more). The reader may consider Fig. 7.1 on the stratification
of Lean tools across the 7-stage process.
REFLECTIVE KAIZEN
HUMAN DEVELOPMENT
DOING FOR
LEARNING
LEARNING CO.
AUTONOMOUS TEAMS
NEED FOR A
REFLECTIVE
KAIZEN
7
HUMAN SELF-ACTUALIZATION IN TEAMS

NEED FOR CI
LEARNING
BY DOING
TEAM KAIZEN
PLATFORM
6
PROBLEM SEEKING AND PROBLEM SOLVING CULTURE

ORGANIZE FOR
STANDARDS
(3) LACK OF
SYSTEM
5
INCREASING AUTONOMY
LEARNING FOR DOING
SYSTEM LEVEL STANDARDISATION AND KAIZEN –QCDSH CAPABILITY

SYSTEM
ORGANIZE FOR
STANDARDS
(2) LACK OF
PROCESS
4
PROCESS ALIGNMENT AND RE-ALIGNMENT MANAGEMENT SYSTEM

LEADERSHIP
ORGANIZE FOR
STANDARDS
(1) LACK OF
TECHNOLOGY
VALUE STREAMS, FLOWS, PROCESS LEVEL STABILIZATION, STANDARDIZATION AND RE-

3
PROCESSES
PROCESSES STANDARDIZATION BY SPOT KAIZEN

BIG WASTE OUT
BIG WASTE
RESTABILIZE
2
LEAD TIME, YIELD, STOCKS & PRODUCTIVITY IMPROVEMENT

MANAGEMENT
AD HOC
TPM / PHYSICAL TRANSPARENCY INFO TRANSPARENCY EXEC VISION,

STABILIZATION
FIRE FIGTHING
TECH
CHAOS
MAINTENANCE VALUE & POLICY

1
SYSTEM 6S LAYOUT VISUALIZATION ERP METRICS DEPLOYMENT
Fig. 7.1 The implementation framework of Lean from basic tools to systemic Quality, Cost,
Delivery, Safety and Human capability is reflective of the 7-stage process. The crux of the process
is the knowledge of the end state right from the beginning and a systematic self-reflective process
to attain it via leveling up
7 Conclusion and Practical Benefits 109
7. The identification, alignment, realisation, and stabilisation of opportunities

(IARS) is as if a protrusion or a sub-cycle within the Do phase of the Standard-
ise/Plan-Do-Check-Act (S/PDCA) cycle. It is the latter’s missing link to a
perpetual systemic push for improvement by way of “looking beyond” goals
and standards, aligning the identified opportunities systemically, and signposting
the newly developed level of performance. IARS at the same time cannot
substitute for PDCA, not at least until stage 7, as the leadership drive is crucial
along the built-up. Nevertheless, it might happen, if rarely, that teams need new
goals set for them above, mainly in times of major kaikaku motions, systemwide
reconciliations, or sporadic deflations of the kaizen impetus.
8. What is still additional to this picture, is that teams cannot guarantee CI either.
Getting bogged down at team level will from time to time invoke the danger of
authoritarianism, groupthink, and peer pressure. The logic of TWC will reach its
final accord with practice once we can rise from stage 6 to 7 and individual
reflection on team kaizen will support the effective functioning of teams. That is,
without accessing reflective kaizen there is a danger that team kaizen breaks
down and an organisation slides back to system level just like Toyota has been
experiencing ever since its journey began. But this is precisely why Western
individualism, properly structured for business purposes, can finally turn out to
be more productive than any initiatives based on more collectivist kaizen
grounds. Remember, however, that individualism cannot attain productivity
unless attained through the previous stages of learning. There is no productive
individualism, only egotism, without education and learning in teams.
9. The TWC system should apply to the CI process already at the recruitment stage
of the people flow. Recruiters should fall back on tools that dependably select
future employees with equally high self-actualising, problem solving, and coop-
erative attitude. These should be the most important traits they look for and all
the rest of the, so to say, traditional interests in communication skills, work
ethics etc., should be moulded to this viewpoint.
I choose my concluding remark to be a compression of the lessons of this book in

this that the way to a CI culture leads from the psychological and ethical precepts
through leadership as SAPSST to TWC and its application to systemic practice
along the 7-stage learning process, the latter in turn selecting the right principles
and tools of the gemba practice. These principles and tools may not necessarily be
exactly those that TPS and the Lean movement have developed, so in this sense,
too, it is not a bad idea to look beyond Lean and keep an open mind. Indeed, what I
find perhaps the most important in my own research, reflected in this conclusion, is
that people and their readiness to always reconsider their patterns of thinking is
incomparably more important than the actual results of their thinking, and the same
obviously relates to business and operations management, too. The ability and
readiness to continuously improve are incomparably more important than the
particular standards resulting from improvement—it is the former stance, conse-
quently, that an excellent business needs to preserve and nourish. In fact, as we have
seen, this is the precisely what excellence consists in.
110 7 Conclusion and Practical Benefits
What may seem to be condensed as a farewell message above at the first sight
has been hopefully vindicated to my readers in the previous pages. I hope I have
been able to keep their attention throughout the book, they have acquired a solid
base for further thoughts, and last but not least I could present an argument of
practical value.
Appendix
Behaviour Checklist
Foreword
This compact checklist of managerial behaviours serves the purposes of operations

management irrespective of industry and is complementary to HR tools on the one
hand and operational KPI’S on the other. To best serve a company and to reach its
maximum impact it is ideally to be administered to all layers of a management body
and administered once every 2 months (six times a year). Its evaluation should take
place on bi-monthly appraisal meetings (“GAP SESSIONS”) between a manager
and her supervisor. Its terminology may draw on lean and other accepted business
paradigms but it is equally open to lean practitioners and non-committed
organizations trodding their own ways of improvement. One of the results of
using this checklist is the gradual alignment of the managerial body to executive
expectations and a consecutive formation of a sufficiently unified high performing
company culture. This checklist is configured to each case and company.

P. Béndek, Beyond Lean, DOI 10.1007/978-3-319-27745-5
112 Appendix
Summary Chart of Categories

SUMMARY CHART OF CATEGORIES
PROCESS DESIGN CONTEXT MAPPING LEAN SIX SIGMA 3i X

SYSTEM DEPLOYMENT ALIGNMENT PDCA KAIZEN QCDH X
PEOPLE ENGAGE CONFRONT EDUCATE COMMUNICATE ASSESS TEAM
SELF INDUSTRIOUS EFFECTIVE ETHICAL COMMITTED REFLECTIVE SOCIAL
Scores per Statement
10 I ENTIRELY AGREE. I HAVE NUMEROUS FRESH EVIDENCE TO SUPPORT MY

CLAIM
7 I MOSTLY AGREE AND CAN SUPPORT MY CLAIM WITH FRESH EVIDENCE
6 I MOSTLY AGREE BUT CANNOT SUPPORT MY CLAIM WITH FRESH
EVIDENCE (*)
3 I MOSTLY DISAGREE AND CAN SUPPORT MY CLAIM WITH FRESH
EVIDENCE (*)
2 I MOSTLY DISAGREE BUT CANNOT SUPPORT MY CLAIM WITH FRESH
EVIDENCE
0 I FIND THE STATEMENT NON-APPLICABLE (**)
5 I HAVE NO OPINION (**)
Within (*) and (**) scores are interchangeable with differing effect on evaluation
Checklist
(22 Categories, 110 Statements)
Process
Pr. Design and Configure

The manager in question (MANAGER) has an adequate understanding of the
sequence of technology applied in her area of responsibility (individual pieces of
equipment, conversion know-how, IT, process design and engineering, constraints,
her customer/supplier pool and downstream/upstream capabilities etc.).
She has an accurate understanding of the individual flows making up the processes
in her area (work flow, material flow, information flow, financial flow, human
skills and development flow, positions and cycle times, standards, work in
process, demand and supply windows, downstream takt time, bottlenecks etc.).
She is regularly involved in or acts upon process re-engineering initiatives.
She can differentiate between process design and process management issues.
She has a solid awareness of both the CAPEX and the OPEX features of her area.
Appendix 113
Pr. Context and Interfaces

The MANAGER has an accurate understanding of her area’s position between
downstream (customer) and upstream (supplier) capabilities and constraints.
(Downstream and upstream from her own area’s point of view.)
She listens to and sometimes brokers between downstream demands/needs and
upstream capabilities/constraints.
She is active in process alignment initiatives.
She represents her area’s interests always with an eye on the higher interest.
She liaises effectively with financial, HR and other departments.
Pr. Mapping and Standardization

The MANAGER maintains a detailed process map and keeps it available to her
people.
She strives to standardize to the maximum and inculcate the preference for standards
in her staff. (A standard is considered to be the actual implemented practice of
doing something in a defined and measured way whether good or bad way.)
She keeps track of her staff’s views and opinions about the current standards.
She provides adequate training and fosters kaizen to keep standards meaningful and
stretching.
She aligns standards as much as possible and contributes to the consolidation of
improvements on them at higher levels of the operation.
Pr. Lean Six Sigma (LS)

The MANAGER has a “lean mindset”: she is aware of the added value expected
from her area in accordance with higher level value propositions, always pushes
to identify waste, standardizes the actual best practice, improves the actual
standards, and thrives on an environment of continuous improvement.
She has not only technically mastered the LS tools implemented in her area but also
knows their function, their mechanism, their actual utilisation level, their impact
on the processes, their acceptance among the operators, and the opportunities for
improvement on their configuration.
Lean maturity in her area spans from (1) no thought or need of proper LS at all,
(2) anything to the first efforts with intangible results, (3) basic stability and
transparence, (4) efficiency and standard work at individual work stations,
(5) interconnectedness and standardized flow between work stations, (6) high
capability leveled flow, pull from downstream, (7) continuous improvement on a
standardized pull process. (Please indicate accordingly on the answer sheet.)
She regularly participates in or leads kaizen workshops and effectively trains her
people in LS.
She is often consulted by other departments on Lean.
114 Appendix
Pr. Intuition, Improvement, Innovation (3i)

The MANAGER “smells” likely or actual problems, intuits their importance
correctly, and followed by a proper analysis she acts upon them with spirit and
confidence.
Continuous improvement (CI) is a standardized, live, and measured process in
the area. Individual kaizen initiatives are properly prepared, supported, owned,
empowered, timed, executed, measured and standardized. The goals are regu-
larly achieved.
CI is based on root cause analyses (Five Whys, Fishbone Diagrams, DMAIC etc.)
and turned into maximum achievable (process level) consolidation of the results.
The CI culture is often reinforced by bigger or lesser innovations coming from the
members of her team that cast new light on standard or paradigmatic work
procedures.
CI and innovation are fostered and honored with public praise and/or in other
ways, kaizen champions and innovative employees enjoying high prestige in
the area.
System
Sys. Policy Deployment and KPI Management

Value based goals are broken down from above and represented in sound area KPI’s
via Balanced Scorecard, Hoshin Kanri, “catch ball”, or like.
Metrics are indicative and often actionable, and are always in hierarchical coher-
ence with one another.
KPI’s are SMART (Specific, Measurable, Accepted, Relevant, Timed), understood
and accepted by the stakeholders of the MANAGER’s area.
The owners of KPI’s analyze and develop the metrics continuously and discuss new
ideas of measurement with the stakeholders.
KPI’s and transparency play a decisive role in the assessment of individual perfor-
mance, bonus plans, and like.
Sys. Process Alignment
Process alignment has taken place system-wide with reference to the company
value proposition and QCD goals.
Process tasks, functions, responsibilities and accountabilities are seemlessly allocated
among the people via RACI or an alternative, the area in question taking its
appropriate role.
Value streams, flows and processes are governed by consolidated system goals
ensuring maximum added value to customers.
Endemic overproduction of information is balanced by a right business intelligence
template or a right practice of information retrieval, control and management in
the interest of zero waste process management.
Management behaviours are evaluated, measured, and improved in a systematic
manner to prevent system erosion.
Appendix 115
Sys. PDCA
PDCA (or an equivalent management cycle) is an institutionalized tool in the area
and has all the three following functions: it transfers goals from a level higher
and ultimately from the executive branch of the organization, structures process
management, and rolls the results back high.
She understands and properly utilises the planning/scheduling tools placed at her
disposal. Within the cadre of the actual plans she schedules resources in the
assumption of optimum tradeoffs.
She keeps all the information relevant to plans, schedules and plan attainment
visible and accurate at all times to all of the stakeholders in her area.
The checking function is practiced at fairly even, short intervals to be able to
straighten out execution in time and nourish a problem solving attitude among
the stakeholders.
Productivity gains, plan attainment or eventual non-attainment is reported back
downstream and/or one level higher.
Sys. System Kaizen

The results of point and process Kaizens are always consolidated at system level to
create the best possible tradeoff from the system’s point of view.
The MANAGER knows the ultimate QCD vantage points and is invited to partici-
pate in all C.I. initiatives with links to her area.
The actual consolidation plateau of system kaizen is properly defined for all lower
level KPI’s including those of the area in question.
Adequate communication, personnel and expertise are provided from the system
level to leverage the area in question.
System kaizen is an on-going exercise rather than a sequence of separate ad hoc
events.
Sys. QCDH Goal Attainment

QCDH goals are always SMART and reflect the Voice of Customer.
Their attainment is measured and made known to all the stakeholders at both
process and system level.
QCDH goal attainment is rewarded (with prestige, money etc.) in a transparent,
fair way.
QCDH goals are (almost) always contributed to as planned by the area in question.
The MANAGER is conscious of the goals of her area and the way they fit within the
framework of higher level QCDH goals.
People
Ppl. Engage
The MANAGER puts the actual to-do into an attractive context for her team.
She is an influence broker and a positive role model for her people.
She has the heart, the mind and the willpower of her people: she motivates like few.
116 Appendix
She is highly versatile, innovative and inspired in her approach to individuals and
situations.
She engages her group AND achieves objectives at the same time. (She does not
engage for self-aggrandizement.)
Ppl. Confront and Cooperate

The MANAGER can take distance from personal biases when acting as a manager.
She mixes confrontation and cooperation techniques naturally and to the benefit of
all parties and of the higher good.
She does not bathe in confrontation but is not afraid to use it (with tact, psychological
caution, and effectiveness) in the interest of a higher good or accepted objectives.
She cooperates well with the team members but she also speaks out if there is a danger
of growing avoidance and submissiveness taking the place of mindful cooperation.
She never compromises her role as a leader.
Ppl. Educate for Problem Solving

The MANAGER’s mentality encompasses that of the explorer’s as well of the coach’s.
She considers the need for problem solving as an opportunity and not a threat or
sign of failure.
In the MANAGER’s area there exists a disciplined culture of competent problem
solving via PDCA, DMAIC or 8D, with occasional recourse to Fishbone
Diagrams, TRIZ, A3, and 3-D simulations. Skills and competences are
registered by individuals, continuous improvement is tracked in metrics, and
an effective and fair reward system has been in put in place.
By encouraging lateral and “out-of-the-box” thinking she also wants to transcend
the disciplined application of LS tools, striving to implant in her team a desire
for excellence.
The MANAGER is the one primarily, though not exclusively, responsible for the
training, education and skill level of her staff, she is involved by the HR
department in planning a training curriculum, and is provided the right frame-
work and support by her supervisor to deliver the right training.
Ppl. Communicate
The MANAGER communicates effectively in all circumstances and at all levels of
the management.
The MANAGER is an excellent listener. Information is actively sought by her,
open questions being a usual way of talking for her.
Communication is highly multilateral in her area, with barriers broken down,
purposeful and standardized channels created for different contents, and no
more loose talk happening in the meanwhile than absolutely necessary for
keeping the environment friendly and reassuring.
Her power of getting through to people’s minds and hearts is outstanding.
She can quickly identify and show up the common strands in different arguments,
explain the right from wrong (the acceptable and the unacceptable), and moti-
vate the team members to take the mutually acceptable or, preferably, the
optimum position.
Appendix 117
Ppl. Assess and Evaluate

There is a transparent system of evaluation in place and it is cast in meaningful
categories to help first of all of individual and team development. Evaluation is
regular and can imply sanctions and rewards with a bent to the latter. The MAN-
AGER keeps a track record of evaluations that form a substantial part of future
decisions concerning renumeration, promotion, demotion and deselection of staff.
Evaluation practices at both individual and team level are found fair and inspiring
by the employees in her area.
The MANAGER is invited to participate and speak out on occasions when her area
is to be judged.
Evaluation is considered a valuable and value creating task by the MANAGER
whether taking place informally after the completion of an assignment or in
formal assessment sessions.
In the MANAGER’s team there is a two-direction evaluation practice in place. The
employees expect to be provided feedback while encouraged to make their
opinions on the MANAGER’s work and accomplishments in a constructive
and balanced manner.
Ppl. Team Builder

The MANAGER considers herself as part of a team and working through a team,
and her team members in turn have an ownership of the team’s goals.
While building a team she also builds the underlying force of change on the
assumption that both individuals and the team ought to feel and breathe the
atmosphere of change to be able to act as a successful team.
She creates a high spirit and connectedness among the team members by e.g.,
emphasizing their common values and interests, respect and care for one
another, while also underscoring the strive for excellence and a reasonable
competition for status as both individuals and a group.
The MANAGER has authority and is trusted by her fellow team members.
The MANAGER occasionally organizes off-site events to foster personal ties but
never allows anybody to take advantage of good relations and harm the team’s
professional objectives.
Self
Self. Industrious
The MANAGER is a hard working person by all standards.
She is something like the first to arrive and the last to leave from work.
She is helpful and sharing.
She is competitive.
She is persistent.
Self. Effective
The MANAGER is just as smart and skillful as industrious in her work.
She finds the right priorities and the best possible tradeoffs to achieve her goals.
118 Appendix
She works dependably under pressure whether by time, from her superiors or the
piling up of problems.
Her time management is excellent.
If it were for her she would always reach her goals.
Self. Ethical
The MANAGER always walks the talk, her actions are consistent with her words.
She is honest and she appears to be honest.
She strives to find the right solution to the moral conflicts of management and
would normally argue from a relevant moral platform.
She is considered just and trustworthy by her team members and the stakeholders
around her.
In conflicting situations she tends to look for the higher good.
She would never knowingly let anyone down.
Self. Committed
The MANAGER’a commitment and loyalty to the company purpose is examplary.
She is committed to the disciplined improvement of herself and her team.
She invests passion, energy and time in conducting her team to goal attainment.
The MANAGER’s commitment to the company bears no visible negative impact
on her health or human conditions.
Her commitment to the company does not prevent her from occasionally voicing her
criticism but her criticism never amounts to destruction, cynicism or bad faith.
Self. Self-Reflective
The MANAGER knows herself properly in relation to her work, knows what has
been achieved, what needs to be improved, how she would normally behave in
one or another situation involving this or that team member, what the likely
consequences of her actions are in a given environment etc.
She strives not to look for the others’ faults and failures before scrutinizing herself
from all aspects and allowing for critique.
She considers it primarily a duty of management to provide adequate conditions for
meaningful and value-added work, and the operators cannot be blamed for
anything coming before that.
The results of her self-reflection are sometimes shared with other managers for the
benefit of all.
Her ability for self-reflection does not mean she would get too harsh on herself
(implying as well a loss of stability and occasional fits).
Self. Social
The MANAGER is an open and positive personality with giving at least the benefit
of the doubt to fellow humans.
Her behaviours toward her colleagues and team members are dependable, largely
consistent, and considerate of others’ opinions, sensitivities and needs.
She intuits people well and has a good immediate grasp of them. She “knows” them
without falling captive to her prejudices.
Appendix 119
She does not expect more from others that she would be willing to give in similar
situations.
She is working hard on developing her social and emotional competence, mostly
through staying interested in other people’s opinions and trying to build new
learning into her own world.
100%
90%
HARD SKILLS SOFT SKILLS
80%
SELF-ASSESSMENT SCORES
70%
PR: SYS: PPL: SELF: Σ:
60%
ASSESSMENT SCORES
50% (BY SUPERVISOR)

40%
30%
GAPS f(x)

20%
10%
0%
ASSESSMENTS TO BE REPEATED
EVERY TEN WEEKS, GAPS TO
BE ANALYZED, ALIGNMENT TO
EXECUTIVE LEVEL IS EXPECTED TO
TAKE PLACE WITHIN A FEW
MONTHS. CORRUPTION SAFE.
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Peter Béndek

ISBN 978-3-319-27743-1 ISBN 978-3-319-27745-5 (eBook)

Library of Congress Control Number: 2015960846

Springer Cham Heidelberg New York Dordrecht London

Printed on acid-free paper

Springer International Publishing AG Switzerland is part of Springer Science+Business Media

London, UK Peter Béndek

I purport to equally provide a scientific explanation for the failure of Western

Contrary to the accepted spirit of management literature, I will be critical of

I am indebted especially to three people who helped me on my way to this book. To

6.2.4 The Production of Improvement as Opposed to Output . . . 92

1.1 The Dominant Practice of Change Management

Despite their common interest in change continuous improvement (CI)

# Springer International Publishing Switzerland 2016 3

Now, already at this early stage of my argument, a clear reason

While to work with the machines is understandably always inferior (less

In such environments company development programs of operational nature will

At its roots, however, if the regulation fallacy above starts to dominate

If we want to develop and improve value creation then almost self-evidently we

The culture of asset development is demonstrated most straightforwardly in the

It is little wonder then that in such highly objectified environments development

1.2 The Impact of OCM on Lean

Asset-based development qua OCM implies that we envisage develop-

Indeed, more accurately perhaps, it is poor customer orientation in the

Similarly, autonomous norms improvement is out of the question at

In the Procrustean bed of OCM every attempt at better downstream

It is indeed an all too common phenomenon marring the change process

Even more fundamentally, at primary or technology level (technology meant as

systems applied to productive environments. When therefore we talk about CI we

2.1 Continuous Improvement at Toyota

To reliably possess the continuous improvement capability is the same as having CI

# Springer International Publishing Switzerland 2016 11

Toyota is fairly unique even is Japan, which is actually a warning to the

2.2 The Toyota DNA

If continuous improvement is not in the DNA of an organisation in a way

• Kaizen and management

• Not used as an overall business philosophy

can easily be considered fundamental. To challenge and change them in a

Any decision, as a result, against TPS, entailing the behaviours listed by

It is curious then how to proceed with TPS/Lean implementation in these

3.1 Lean as a Platform of Kaizen Events

Leadership and management reflect two different attitudes to governance. The

Without a functioning culture to support CI, or rather, of CI, continuous

# Springer International Publishing Switzerland 2016 21

Any managed culture, management understood as an instrumental

I shall distinguish between several TPS/Lean strategies of this, largely, failed

1. Installation of select tools

In the end everything boiled down to behaviour management. Training

This behaviour management system was heavily underperforming, it was losing

What happened with the consequent transition from mass production to

In Tom Faust’s account the Freudenberg-NOK recipe, first addressed to a small

1. Analysis of the baseline batch production system.

What is worse, the transformative idea would still be missing as to what

Now, it only remains to be seen if he can properly connect to cultural develop-

Whether they care for a Byrne-like posture or appreciate the importance of

2013b). Of course, the outcome of calculation depends on who calculates. But as

Kaizen events in the world, all things considered, produce calculated

As the analysis above showed the transitory stabilisation of kaizen capabi-

spread of leadership, however, respect and continuous improvement will

1. Get a fully committed, capable CEO.