‘The Toyota Engagement Equation’ with Ernie and Tracey Richardson

‘The Toyota Engagement Equation’ with Ernie and Tracey Richardson

by Patrick Adams | Nov 8, 2022

 In this episode, I replay a webinar with Ernie and Tracey Richardson as we discuss their book, ‘The Toyota Engagement Equation’ and the many learnings from working with Toyota over 30 years.


Full Episode Transcript:

Patrick Adams  00:01

Welcome to the Lean solutions podcast where we discuss business solutions to help listeners develop and implement action plans for true Lean process improvement. I am your host, Patrick Adams, everybody, I am still on the road. But I wanted to share one more throwback episode with you where I replay a webinar with Ernie and Tracy Richardson when we discuss their book The Toyota engagement equation all the way back from episode four of the lean solutions podcast. Enjoy. Today, I’ll be reviewing a webinar that I had with Tracy and Ernie Richardson, the authors of the Toyota engagement equation how to understand and implement continuous improvement thinking in any organization. Tracy and Ernie are also the founders of teaching lean Inc. And in the book Tracy and Ernie layout and equation that came to them after 30 years of working in the TMM Kay Toyota plant in Kentucky. The the book actually walks through their 30 year gamba journey, and lays out the all the learnings that they had, while working for Toyota. It covers learnings from an hourly position, or team leader and team member position all the way through to leadership positions. As you may know, Toyota has a very unique approach that most are not willing to replicate from a leader to team member development ratio, which was one to five meaning through all levels of the organization from the President. To the team member, there was one leader that was responsible for five people on the team. And oftentimes, this could be four to seven, depending on the complexity of the area or the amount of decision made, as well as critical process areas. But for the most part, there was an average of five. So throughout the book, they developed this, they talk about this equation, it’s GTS six plus e three equals DNA. So the GTS which is can be laid out in six different areas is go to see grasp the situation, get to the solution, get to standardization, get to sustainability, get to stretch, and then the E three stands for everybody engaged every day. These two are an amazing pair. And they obviously love what they do. They’ve been doing this for a long time. And they have some really, really great value add information to give all of us during this webinar. So listen in. And thanks again for joining the lien solutions podcast. All right, so we’re about five minutes in, we’re gonna go ahead and get started. Just like we start out every one of these webinars, Tracy and Ernie, I love to start with a poll question. And I think we have a really great poll question for all the attendees today. The question is, is the current COVID-19 condition going to help or hurt your culture when you return to work? So the answers are healthkart? Or maybe neither, maybe it’s not going to do anything. So I’m gonna go ahead and launch this poll that everybody should have in front of you right now. Go ahead and take a minute and answer that the best you can. Is the current polling condition going to help or hurt your culture when you return to turn to work? So as you’re answering that, let me introduce our guest speakers for today. Tracy and Ernie Richardson are the CO owners of teaching lean Inc, with over 32 years of experience in Toyota methodologies. So Tracy worked in management at the plastics department Toyota Motor Manufacturing Kentucky from 1998 Sorry, from 1988 to 1998, where you accumulated over 460 hours of class time and priceless life lessons from her Japanese trainers and mentors. And then Ernie has 32 years manufacturing and human resource experience with Toyota Motor Manufacturing, which has allowed him to see the cultural dynamics from both functional areas of the company. He’s certified in the Toyota way Toyota business practices, eight step problem solving Standard Work visual management, strategy, deployment, company culture, and then specializes into Toyota production system thinking. Tracy and Ernie are also co authors of the Shingo publication prize winning book, The Toyota engagement equation, which you see here on the screen understanding and implementing a continuous thinking environment for any organization. And I just finished your book and absolutely loved it. So it was amazing. Hey, Tracy, her you guys should see the poll results up on the screen right now. So interesting answers. Looks like 60% say that the current phone situation They’re going to help their culture when they return to work while 29% say that it’s going to hurt and 11% say neither. Pretty interesting. So with that, I want to turn it over to you guys. Welcome.


Tracy Richardson  05:15

Absolutely. Thank you for having us, Patrick, or do you want to comment on our thoughts around the the poll question, and then we’ll we’ll dig in.


Ernie Richardson  05:25

And we kind of started that whole question. That’s kind of a thought starter, actually. When companies talk about culture, and a lot of companies we go to, and they talked about culture. And I said, Man, it takes forever to change a culture. And if you look at what’s happened with the COVID-19, activities that are going on, you can actually see a culture change fairly quickly. Now, I think some key points of that is people understand why it’s important that people understand why the change is important, and what when, what effects is it for them? And so it’s really a good lesson. I think, as we go into our companies, we talked about looking at trying to change a culture, or cultivate a culture, I should say, we should be looking at making sure everyone understands what’s in it for them, what are the ones should they care, and I think I think this has been a good example of you seeing a whole nation change and change the culture in a short period of time. And so I think it’s a really good opportunity for companies to take advantage of, of that learning, in being able to move into their own organizations have been able to, to cultivate continue to develop the culture. So I think it’s a good opportunity right now.


Tracy Richardson  06:46

Absolutely, I think when you think about the downtime, some have had, and I know some of them may have shut down, but I heard especially some local companies and and you know, still being attached to Toyota a little bit, you know, they’re doing some internal things, it’d be a great time to have time to think, you know, Twitter causes space to think so we’ll transition into to thinking, if you will, and we’ve kind of brought some slides up. And we even put some of our own cues, to allow you to have notes, if you’re doing some screenshots and want to, you know, take some pictures of the slides. And so it’ll allow you to kind of follow along, but E if e to the fourth power. So I kind of added from e cubed from the book, I added a fourth one, you know, we’re we say we talked about kind of Zahn and improving. And after I think about it, I’m like, you know, we could have had e to the fourth power. And when we talk about should everybody be problem solvers, we look at every day, everybody engaged, and we’re empowering that in people, you know, a lot of organizations, you know, there’s different variations of labeling, you know, there’s six sigma there, there’s a lot of things around that. And I think, from the perspective of everybody’s a problem solver every day, and how do we engage in that, and when we look at the kind of the footprint of an organization, I like to call it, kind of the, the vertical and the horizontal alignment of the organization. And so it kind of makes a plus sign I draw this up on a flip chart sometimes. And so when we look at it vertically, we can look at from and it could be various things, you know, I say it to make it rhyme, but CEO to PTO, and it means from a cascade approach, everybody has a common lens. Now, I’m going to speak from the example of Toyota and just looking at the Toyota way values, you know, the respect for people, the teamwork, the challenge, the Kaizen continuous improvement, and when we look at problem solving, and they go see those values, how do we make those tangible, right? How do we live that breathe that and show that, you know, we talk about the values, a lot of times, we’ll see them up in a picture in the lobby, and beautifully framed and, you know, but what does that mean for me as an individual, so from a vertical standpoint, if I’m the president or the CEO, or the owner of an organization, I want to have that common lens from a value perspective from an TrueNorth perspective and also a lens of problem solving. And then horizontally when you look at all the different some people call it silos, but all the functional areas. So you know, I’m just going to name a few you know, you look at accounting, you look at r&d, you look at human resources, manufacturing, just all the different you know, depending upon your genre of industry, there’s a lot of different functional areas. And, you know, there’s there’s always what I call competing KPIs. Sometimes with with areas like, we’ll hear, hey, engineering is more important than manufacturing manufacturing say they’re more important engineering. And so if we have a common lens, a common language, kind of, as Mr. Cho said, a guiding beacon up there with the TrueNorth, and our values, then it always grounds us. And in the sense of the directions, and everybody’s probably seen those PowerPoint slides with the arrows going all over the place. And we’d like to kind of harness those, as we’re moving towards that that direction upwards. And when we look at the the next bullet point there, at Toyota, when we, when we started in Ada, you know, there wasn’t a lot of things documented, even the word lean really didn’t exist in the sense of it today, you know, we didn’t know that was going to be the, you know, when Jim and Dan created that in the machine that changed the world. And maybe even a little before that, but it was kind of coined in as a replication of Toyota culture. You know, one of the funny things that our trainer said, and it probably wasn’t funny at the time, but when I reflect on all this, they said, you know, it’s, it’s not a choice, it’s just our job. And last year, I think I wrote an article that said, you know, the job is a umbrella word for a lot of things. And I took that, and I made it an acronym down there. And you can see our job is really just our behavior every day, and how we align to what the company values are, and make those tangible bring that to life from that vertical and horizontal perspective. And then we can start to look at problem solving, you know, our trainer, the very end, bullet point on this slide is is looking at problem solved, equals our job security. And what I mean by that is our ability to see gaps, recognize them and make cost, sorry, cost translations to the KPIs meaning that our trainers down to and some of you that have been I saw some of you that have been in our sessions, we talked about the one second rule. And that was when the trainer actually made a translation to say, you know, one second accumulated if we remove one second of waste in our in our day, no matter where we are in the organization, you know, we just happen to be on the on the line, we’re rebuilding a vehicle, but it can be anywhere it could be typing up through computer screens, I’m going through 10 screens, I don’t need to, it can be things like that, those are your seconds. And when they made that translation to a KPI to say, if you add a second up in an eight hour day and kind of put it in a bank, that second goes in a bank, well, we pulse our line about every minute we make a car, and people will have to make these translations to what how it fits their world. But when you add those seconds up, and they go into a bank, and at the end of the day, you can make eight more cars in the same amount of time. You know, you just sit there and you’re like, wow, they asked me to save a second, my first impulse was to say, this is kind of a waste of time, who cares about a second run, you can make eight more vehicles in the same amount of time, and you think about 1000s of dollars of profit per vehicle. That’s a lot. And that’s just in one eight hour day. And so I think folks ability to make cause translations through problem solving. And as we get through this a little bit, we’ll get a little bit deeper, that gives us that that vertical and horizontal alignment to the values and and our purpose, what what are we doing and this is our j ob just our behavior every day. So anything to add, before I change


Ernie Richardson  14:00

it, just think about when we talked about problem solving. It’s very different than firefighting. And and we have to really, we see a really strong culture and firefighting, but we have to continue to embrace how do we back up and take the time to actually solve the problems? actually get ahead, we’ll always have to do some firefighting. That’s always happened. But it needs to be a small part of the day and problem solving needs to be a bigger part of the day. Sure.


Patrick Adams  14:28

What would you say, Ernie? Just a quick question. Oh, and just from a logistics standpoint, too. For those of you that are listening, if you do have a question, you can drop that into the chat box. We’ll do our best to answer those questions, if we can, but otherwise, we try to hit them maybe at the end of the webinar or reach out later on. But just a quick question. Based on what you said early on around firefighting. I had a post out there the other day and some really good conversation around it. But what would you say for an organization that maybe the primary the primary time For a leader is spent firefighting you said it should be a minimal amount of time, what would you tell them would be the first step that they should take in, you know, in trying to minimize the amount of firefighting that they’re doing. You know, if they do have a large portion, I think


Ernie Richardson  15:13

it’s gonna go into the next couple of slides and tall guy talking about we got to have standards, because many, many times the reason we firefight is because we don’t have standards and data. And therefore it forces us to do something and do something really quickly. And so as we start doing the firefighting, it can actually lead in and tell us where do we need standards and data, and should be telling us all the time, instead of hey, we’ll do this and hope and fix it. Right? It’s huge in the end of the standardization piece. So if you go into this slide, we’re talking about just just to kind of feed off of what you just asked Patrick to say, if we don’t have a standard, but let me back up for a second what what what we asked the class and we go to them? Are you managing the process or process managing you? Good question. So when we have that, when we have that question, we’re saying, Are you always reacting? Or can you predict? And many times we’ll hear reacting, of course, because we’re in firefighting. And what we come back and talk about is, okay, let’s go look at a problem. And let’s start with the standard. Well, and many times we hear well, that’s we’ve always done it this way. And I always say, when I hear we’ve always done it this way, that’s the key place to actually pull the Amnon stop and go look and say here for we need to start with a standard. That’s right. We tell people, a bad standard is better than no standard. Because it gives us a foundation to build a better standard. That’s right starts to start to create stability for you. And it starts it starts giving us the opportunity to control the process to understand where do we need to? Where do we need to put our focus? And so the first week first question will always ask is, do we understand or have employees? It? Do we have something to look at? And then and then the second question is, okay, many times we’ll hear we do have a standard. Now, how do you know, let’s go look at? And when we get that, how do you know apart? Well, we had a standard back four or five years ago, and it’s in a book somewhere. And what we’ll say is, well, not sure that’s really a standard, it’s something somebody wrote at some point. And it was probably good at that time. But but it’s not working. Now, obviously. And the second key points of the standardization piece, and this is a part that we struggle with also, is everybody it’s working on the process shouldn’t be involved in developing the scheme. They know the process better than anyone. So we got to the bottom level, the first level employee and say, help us understand what we should be doing. And then we can start working on how does that cascade up through the organization to support the company goals and objectives? And it’s really important to be able to get those those folks involved, because they’re the ones who really control the output of the process. Right? Right. And then the standard really is talked about when we get into standards, they should, and many people think standards limit creativity, but actually standards are the basis for creativity. I have a standard in place, I can now understand when I make a change how big an impact it has, if I don’t have a standard in place, it’s a guess how they get impacted? Has, I have wait for the trailing or the lagging indicators to be able to tell me did we actually make a difference? The next part about standards and every every discussion we have we talked about standards, because it is so important to be able to have something that you have a baseline on. But if we can, anybody can write a standard always, we always talk about it’s it’s easiest part of our standards, right? It’s maintaining it long term, it becomes the critical piece of it, right? So if you don’t have accountability, and I don’t mean we’re going to find somebody in you know, let’s not follow the standard, let’s go fire him. I’m talking about who we have accountability as a company to be able to understand are we performing according to what we should be doing to the standard. And if there’s no accountability to in what we said, it’s really just a suggestion, it’s not a standard. So you got to really separate the difference. If it’s something I need to control that that’s going out of my company, I need to control it in need the standard. And you look at all the critical manufacturing processes around the world, any process is critical. They’ll always have a standard, and they’ll always be audited for that standard. And that’s the same thing we have to do internally with air standards. How do we how do we ensure they’re being followed to be able to control the output of the process? And that’s when we know at that point, we’ve got control the process is not managing us anymore, right? Yeah. And then and then we connect that standard once we’re able to get that standard in place. Now I can measure the process. I can Start putting data points in or KPIs. And to be able to see where do I need to focus my attention? Where do I need to be able to get the right amount of resources at the right place at the right time to be able to have the biggest impact for the company really connects to the company at this point in it. And this is a struggle for some companies is being able to say, how does what we do every day connect to our long term company goals and objectives for our company? How do we have that line of sight from from all the way from the operator level all the way to as Tracy said, the CEO to the PPO? How do we have that line of sight where everybody’s working from the same book, right. And so standards are so hugely important for us to get some stability and stabilize and then improve, not improve, improve, improve, and they were stabilized.


Patrick Adams  20:51

And Ernie, you had you hit on people here and a little bit on culture, there was a question that popped in. And I think you kind of answered it. But the question was, how can we build a support structure for frontline team members?


Ernie Richardson  21:03

Oh, that’s that’s to me. That’s, that’s the easiest part is that’s what we all as leaders, that’s what we all did. Right? We’re developing the systems to be able to allow the team members to be successful. So we build in whatever the standardization piece, the KPI piece, we provide the environment for them to be successful. And we we encourage and engage them to be able to help us solve problems. And once we’re able to do that, man, is the doors wide open at that point. Sure.


Patrick Adams  21:32

Yeah, good point. The other question was just on your last point, around KPIs that someone was asking, they said that they have so many KPIs in their organization, they wanted to know, what are the most impactful KPIs to align cost reduction? With your KPIs?


Ernie Richardson  21:48

Yes, so So what I, what we, what we coach people to look at is first what we we don’t need so many KPIs that they become unimportant, right? So we need to measure the things that have impact to the output of our process. So if we need to control that process, we need a KPI. And sometimes, here’s the here’s kind of the confusion, this KPI that we’re talking about process KPIs really for the production guy or person on the process, how do they know when to be able to make change, and then that bleeds that kind of goes upward to the company goals and objectives to be able to fit in a bigger, wider range of KPIs. So we all can understand is, is that process under control? The biggest mistake many companies make is they try to track everything, and all of a sudden, it becomes overwhelming and means nothing. Right? So what we’ll go back and pick up what are the things that are what are the things that you need to control out of that process? What’s the one or two in some process? And some processes? Honestly, you probably don’t even need a KPM. But there’s almost all processes will have something critical that you need to be able to measure to be able to see Is it is it performing for what it should be, if not one.


Tracy Richardson  23:03

And also to add to what Ernie said is looking at what is the internal customer need the process to be? And then what’s the external customer so always say what’s the pain to the organization, you know, what’s getting hit and, and all KPIs. If you if you connect, if I have a quality issue, that’s a cost. If I have a safety and injury, something that happened, that’s a cost if I don’t have a good productivity day, that’s a call. So the when I talked earlier about cost translation that’s looking at productivity that’s going to quality that’s looking at safety that’s looking at HR training and development, the people side all of them connect to an ultimate cost for either doing or not doing something from a leading indicator where more predictive and Well, I think it comes up in the slides being predictive, rather than reactive, we’re in the process. Can we interject the point to say I need to track it here, before it gets over here, and I’m reacting to it. And so I look at what’s the pain? First, you know, if you look at a Pareto chart, you’re focused on item and your descending chart, what are those areas for that that pain that I need to look at, from a company perspective, you know, looking at bigger targets, and then how does that cascade down to department level and even team level you know, if we looked at our case, we had assembly, Ernie and I were in plastics and powertrain, which were feeder departments, then within plastics, I was, you know, injection molding or instrument panel, then I had team goals. So you could do that cascade up to say if the company needs a cost reduction, I can look at that at my granular level from an internal customer to the external and make those connections.


Ernie Richardson  24:55

Just want just one more quick thing before we leave this slide is well We all always need to be able to allow standards to be changed. But we need to allow them to be changed at the lowest level possible. So every standard change that shouldn’t have to go to the President did very poorly. And so so many times when we see people that they want to make change, so Well, it takes three months to make a change that they can’t, that won’t work, right, have a process that’s that suitable, and approved at the right levels organization, and everything shouldn’t have to go to the most senior person. In fact, they should see see very few. Yeah,


Tracy Richardson  25:36

yeah, to catch ball is happening. And the bottom down is creating, and we’re just throwing that up for approval to say, Are we meeting expectation, it’s much more fluid when it happens at the bottom. And as I talked about, in the book, we don’t want to sell, tell and convince anybody doing the work to do anything, we need to engage and involve them and creating it. And we’re just the servant leader supporting it, and what resources do you need to be effective at it? So that’s, that’s, I think, crucial for leaders to understand so. So as we talk about, you know, Arne, and I get a lot of questions and have for years, you know, what was it like to be in Toyotas culture, and you know, I’m never gonna say it was a perfect culture, there’s no perfect culture, there’s no perfect company. You know, the things that Toyota did, from a cultural perspective had to do with standardization. And what we talked about, there was always a standard, we always understood what we needed to do, everything was visualized. And for every minute, every hour of the day, we knew where we were in accordance to the standard. And so we came up with this equation, which is the meat and potatoes, as we say, in Kentucky, of the book, we tried to replicate a Tracy and Ernie kind of internalization of how to you share a very dynamic infrastructure of culture, and bring it down to say, Here, you can do this in any organization, it really had nothing to do with cars or building, you know, vehicles, or all the things that we did, it was it was how we think. And so with the equation, it allowed us and I put in a visual and I know a lot of people on LinkedIn, that follow and connect with us have seen the visual, if not, hopefully, it brings to life, where the the outside of the ring is what you see as the the actual GTS equation. And then what we’ve done in the book is actually we then the TPP, the Toyota business practices, eight steps. So you can kind of see and grasping the situation go to see the GTS ones in the middle with a person with the eye that I’ve got to I’ve got to go see everything. And that’s one of the Toyota way values is good chicken butuh, which we couldn’t say it. So we say get your boots on. But it really just meant, you know, let’s go see. And so if you look at this, this process, it was our cultural kind of linear path of thought, you know, first we go see, we grasp the situation, and that’s looking at, from the when you look in the inner ring, where the eight steps go around, it’s all the foundation is planned, do check action there when you get to the third level. So it’s a stack approach to kind of bring in such a dynamic culture that can transfer to healthcare transfer to service industry, in anything that people do. This is a way to think through your value streams, we work probably more outside of manufacturing, than inside, I’ll say pre virus, we haven’t been anywhere. This is day 50. So we haven’t been anywhere for a little bit. But when you look at the grasping the situation, that’s framing the problem getting the gap, how do we measure that gap? And then looking at getting the solution that’s root cause that’s, you know, getting beyond the symptom, thinking deeper, then getting into the GTS for which is really setting the standard going back to what Ernie said. We never operated without a standard and there was accountability to that. And if it wasn’t followed, there could be corrective action. And so there was high accountability. But the beauty of it people, as we’ve said, they think, oh, gosh, you know, you’re stifling my creativity actually, we embrace the fact that we knew the expectation every day. There’s beauty around knowing what’s expected and being able to see gaps when when they’re they’re just really quick. You know, that’s kind of really the foundation of five s is the see abnormality at a glance. And then that sets us up for you know, kind of sustaining and maintaining that standard, which then allows us to in prove it. And getting to that point where we’re gonna raise the bar on ourselves. And it Toyota, we would call it purposely creating a gap, which a lot of folks say, you know, what kind of crazy place did you work for that you’re purposely making a problem when you don’t have one. And that was really going back to our expectation. But we had to set ourselves up through this path of thinking, you just didn’t go in and have a target. And oh, let’s, let’s raise the bar, let’s raise the bar and you miss that stability of that standard, which takes us again, back to, and I’ll add to it now, the E for everybody every day engaged, empowered in this process of thinking, which supports what we learned internally as the TVP. And in the book, we have a whole case study a three around quality circles, actually. And I actually did it at the plant. It’s a real live a three that I made, kind of for the book to fit. And there’s a coach walking through a mentee going through the process of the eight steps. So you kind of see how its way. But that really all that set us up for that equal sign there to be the DNA. And I say that’s the discipline and accountability that a lot of cultures Miss, you know, that’s the part that is so much of the key, you know, Mr. Cho, would always bring our competitors in. And people have heard this story. And a lot of the folks who say, Why are you bringing those guys in here, they’re seeing all of our secrets, right. And he’s like, really, the secret is invisible, they can’t see the cultural aspect of people thinking on a every minute, every hour basis and visualizing gaps. That’s what they can’t see. They see the external of a system, but the internal of a thinker, and a problem solving as problem solver and a person that’s visualizing every day on the boards, the team leaders are out there working, you always knew where you were. And so that DNA, this kind of helps support a linear path of thinking and the visual, hopefully allows you to see it all together there. So any anything to add before going over


Ernie Richardson  32:20

just real quick. This is this is this this formulas, we really started out calling it leadership standardized work of how leaders should be able to look at at the process and be able to understand there’s a step at each level, and be able to support and develop and support the organization to be able to have the patience to do it correctly.


Patrick Adams  32:46

Yeah, that’s a that’s a great, great point. There was a question that came in. It might back us up just a tad. But you mentioned Leader Standard Work, you guys talked a lot about standard work. Quick question that came in from Francisco, how do I write a standard


Ernie Richardson  33:02

and avoid being too prescriptive, so we don’t create bureaucracy, and set, the standard should only include parts of the process we need to control. So we have to be really careful to not write non value added stuff into the standard. Some standards can be really short, if it’s a small process. And then if you take a huge process we made divided into three or four standards, sure that we only put in it what we created it. So we would ask every step you write in the standard, you’ve got to say, what’s the value of that step? Otherwise, again, like we talked about our Oh, was will make standard for everybody, everything and don’t let it fall anything. Because it really does make it so restricted that people can perform their job, you know, pick up a screw with your rod and put it in with your right hand, twist it three times those some of those don’t create that. Sure. You only want to be able to put into the standard what value or what part of the process we’re trying to control, not all the all the extra stuff.


Tracy Richardson  34:04

And you’re you’re wanting to look at, I look at a standard as the best known method at this moment, that we have consensus and agreement, you know, these are all the folks doing the work, right? We got to get them have agreement until we change it together. So if the folks that are doing the work, like let’s say there’s 10 People that rotate on this process, and I have all 10 of those together, what’s the most value added step who has the best snacks, you know, it’s like sharing tribal knowledge sharing our best practice, and how can we create the best of the best to set the baseline to go into that, you know, sustainability, maintain, then improve then we’re improving it together. So if I feel like I’ve been a part of creating it, then you you lose some of that. I call it pushing the standard versus pulling. You know, I’m pulling out what I Need from the folks I’m engaging with them, they’re actually creating it, I’m just facilitating to ensure we’re meeting KPIs, we’re meeting the internal customer and what the external needs, and doing it in the most value added way. But when they’re a part of it, and they’re adding their value and their time and what they’ve learned over the years, you will find that, you know, there may be disagreements, but you work through that, and you understand the why. But sometimes there’s reluctance see to folks actually wanting to share their knacks, because oh, I want to hoard my information, because I’m not special if I don’t have that special knack, or I can do this the fastest. And so we got to, again, that goes to purpose and understanding and cars, and that I’m not just an individual, I’m part of a team and the team succeeds, we succeed as an organization, we also fail as one, as the key at Toyota says people are the most important asset of the organization, and can be the determinant of the rise and fall. So we have to put that emphasis on the people that are doing the work, create that best known method, that we have accountability to follow until we change it. I’m gonna move this forward for you already.


Ernie Richardson  36:13

Yeah, and, and just the last point on on that subject is, really be careful how many standards you try to develop at once. What we would encourage is, is do do whatever, whatever the size you can, we can work on. But don’t try to do everything at once do the things that are critical. Because think about if I don’t have a standard that I’m going to standard, that’s a culture change. And so do do one or two, right? Before you do a bunch wrong, right. And so really want really want to reinforce that we do the right amount at a time and continue on developing people to be able to do so is we shift to the slide and GTs one that we talked about go to C and grassless situation. And this is absolutely one of the biggest struggles that most companies have with us is is they can tell us what the problem is. But when we push them out, they can’t show us what the problem is. And so we really do talk about going to the gemba going to see means that we’ve got to have a plan when we’re going out. We’re not just out walking around, we’ve got a plan of what are we going to look for. And then we got to look at some things when we’re there not just the fact of we’re going to the floor, we got to be looking to start with Do we have a standard? And if we have a standard, is it documented? How do we know? How do we train to it? What are all aspects, what is happening? And then the next point is what is what is as happening versus what should be happening. And so be as a leader, I’ve got to understand the differences of those two. And I can’t just walk up and say, Hey, Patrick, why are you not doing your job, you know, that people are not coming in and performing the way they are, because they think that’s this young way to do it, or they want to or disrupt the company, they’re actually trying to survive. So we’re giving them a broken process and expecting them to perform miracles when we don’t we blame them. Right? And so what we go back and as leaders, when we go, we go look and see what should be happening versus what isn’t, we always tell the people that we coach is I want you to see the problem. But I also want you to see where does the problem come from? And where does the problem go? It’s more crucial than just that one aspect that right there. It has an aspect for the different ones. The next part is then we’re going to ask you how do you know it’s a problem? It Do you have the KPIs? Do you have measures on it? Me? Show me how it’s a problem. And many times we’ll hear well it comes up all the time. Well, that that’s that’s a true reflection of professional firefighting. If it keeps coming up all the time, right? Then we’re going to really push them to say, the process is controlling you at this point we’re asking you get control the process. So please, get whatever KPI you need to be able to understand why is this process not stable after we develop the standard? And then we use that as the leading indicator for the lagging indicators. And Tracy is going to talk about in the next slide, but I need to first understand how can that process perform before I can worry about what’s our total output or or what’s our profit margin for the for the quarter, I need to understand why is this process non stable? Many times we talk that and this is one of the things that probably was really complex for me to learn at Toyota is says if we control all the leading indicators, we don’t have to worry about the lagging indicators. It’s that simple. You control the process indicators. We will meet our company goals and objectives and many times over achieve that can we go objective because of of our leading indicators that we’re we’re tracking and controlling



That makes sense.


Tracy Richardson  40:06

So I believe this is yeah, the last one before the the end slide. So when we look at everything that we talked about, so how to how to leaders try to support any culture, evolving culture and improving culture, one that’s starting, you know, from everybody’s in a different spot. And one of the things from worksite communication classes I learned from Toyota, is that just a simple change of words and that servant leadership model, instead of saying, Hey, I’ve got 25 people working for me, I need to reverse that to say, Hey, I work for you, and how can I help? And that was one of the things that Mr. Cho, our president, in a little prior in the early 90s, he would always be down at the process. I mean, one day, he just I looked up and Mr. Cho is literally standing right in front of me as I was taking some glovebox doors out of a press, and I turned around, and he’s right there. And he’s like, how’s it going today, Tracy sign and, you know, about my voice is shaking, because, you know, I’m like, Oh, what have I done? You know, why is he here? And he’s like, how’s this machine running? It’s a newer machine. I am I want to understand, is there anything that you need to make this process better? You know, and I’m still reeling from the the president standing right in front of me, but you found out later, this was a very common practice, we, you know, he would always come down and get a finger on the pulse of what can I do? He would never direct us or tell us to do anything. It was always through questions. How can I help? What resources do you need right now to be more successful? And always thought that was such a, a model for a president, who, you know, was learning English at the same time, but just to come down? And not? Sometimes you’ll, you’ll see companies say, well, when my leadership’s on the floor, it’s because we’re doing something wrong. Or there’s the five who’s in the root blame. And it’s not about how can I help? Or, you know, what’s the situation happening? So, always thought very highly of Mr. Chau and always tried to be like him as a leader, as I grew to say, let’s just ask those simple questions. How can I help? And what resources do I need? And what are those those barriers and constraints that I can remove? And another aspect of, you know, if he didn’t know the answer, it was like, and it’s the third bullet on there, you know, it’s okay, I learned very quickly, it’s okay, as a leader to not have all the answers. I think a person respects you more and gains trust, if you can look at them and say, you know, I don’t know, but how about we go see and learn it together. And I would rather be told that somebody didn’t know then to give me some off the cuff answer, and then I’ll get back with you later. And then I never hear anything, but to, to have the, you know, just the being humble to say, you know, I don’t know, let’s go see together and Mr. Chou was that way as well, he was very much about sharing wisdom, and let’s learn together. And you know, if we can empower people, through you know, for us, it was quality circles, it was suggestion systems, it was quality tasks for safety task force, it was, however, we can get people to have that space to think, and also space to listen, you know, our leaders had to listen, but just to listen, get the finger on the pulse, as I say, to allow that, that empowering engagement at the team member level and to embrace that, that there, they are our most important assets, because our trainers in the early days and we were we were developed after they left to be leaders that ask questions instead of, you know, I can go to a person or if I’m talking to Ernie, I can say already. Why did you do that? You know, that infers that and Ernie may take that as that’s inferring he did something wrong versus Ernie, do you mind taking a moment and helping me understand this process? I know your time is valuable. Can you walk me through this process? That’s a much different question. Then why did you do and just say, hey, Ken, do you mind taking the time to walk me through the process? I’m going to learn the process either way, but I’m gonna have him much more engaged with me. If I ask him a verse that I knew question and that was something that we learned in our team leader curriculum that was our hourly leader just to reverse that you and I question and, you know, the the last part there about discovery learning. I don’t know how many times our trainers would set us up sometimes the Fail. And sometimes it was just because we were arguing with them. And they just said, Okay, please go please document please come back, we will have discussion. But there was this this, go back to space to think they gave us space to think space to fail. And in a way that we could internalize it and have that self discovery, I thought that was, you know, to give us time to learn and time to reflect the Hon SE. Part to reflect on that was, I think, just priceless. And going into the end point. You know, I think we’ve talked a little bit about it, but in the in the context of just as a culture, if I’m 8020, or 9010, on leading versus lagging, just think about how if I just shift that from 5050, you know, and then start to even move that we want to try to really shift that you’ll always have a lagging, how am I doing at the end of the quarter Type Indicator. But if I can be more predictive upfront, it gives me the ability to affect the lagging before I get that report at the end of the quarter, I’m having influence before I get it, because if I react on on April 30, on something that happened in January, I have no idea what happened in that process. I’m guessing, I’m assuming tribal knowledge is telling me or my favorite, here’s my favorite. I’ve seen this before, Patrick, here’s what we need to do. And my first response is, how many times have we seen this before. And so I think from a leadership perspective, to be able to step out and see some of these things. And you know, we’re going through this really fast, you know, this is a lot of information. But we cover a lot of it in the book, and just how we learn this and the trials and tribulations around it. Already, I don’t know if you have any last things to add on this part of it.


Ernie Richardson  46:55

A couple of things. That one thing when we talked about going to the gamba, and I forgot to bring it up on my slide was up. But if leaders go to the gemba, and they think they see what’s happening, when they’re not there, that’s that’s unbelievable. Reality, people are trying to perform what they think the leader wants to see. Right. And so is a what we call see him through the process, you’ve got to be able to see what’s happening when you’re not there. And that takes really, time and skill to be able to have the patience to be able to see that. Right. And so we have to do that. And the last point I’ll make is talking about developing leaders, when I was in promoted in powertrain, the manager, my trainer would sit around when I’d make a decision, he would ask me, Ernie some Why don’t you do that? And I would give him the response. And then he would just walk off. And so for a long time, they really buffaloed me once he doing that. And so after some period of time, I asked him, I said, so why do you keep asking me these questions. And he says, I’m always gauging your capability level. Your response, give me tells me where you’re at as far as your capability level. The Pretty, pretty insightful way to be able to he was never never was he responsive and saying, Well, you shouldn’t do that. He was always engaging that at that level. So


Patrick Adams  48:23

I thought that was pretty cool. That is cool, powerful. Well, we had that we had a couple more questions come in, and we have a few more minutes. You guys want to hit a couple of these questions? Sure. All right. So we had one question come in that said, what you were talking a little bit about problem solving. Towards the beginning, Someone wanted to know, how do you explain the difference between problem solving and preventative actions? So being preventative to keep problems from happening or responding to problems? And what’s the


Ernie Richardson  48:55

difference between sets. So preventative actions would typically say we’ve got a standard, and we’re measuring something that tells us we need to make change. Problems usually come from we either don’t have the right standard or not following the standard, or it’s not been updated and so long, that we’ve created another environment, that creates a problem. Sure. And so the big difference to me is I can do preventive, I can see I can already see I need to make change. That’s the beauty about having a standard and having a KPI to be able to tell me when change is necessary, instead of waiting for some breaks down and I’ve got a problem. So that’s a very good question. Oh, very, very good question.


Tracy Richardson  49:38

Yeah, the change point management part around that is we try to equipped team members to understand what not just in the I’ll just say the high level written standardized work, but when you look at equipment, capability of equipment, or how many of x do we need in our landside? A stock, you know, being able to look at all the decision factors and what it takes for me to be successful, the change point management aspect. So the team member understands the last questions, they have to ask a team leader, you know, there’s a, there’s a one to five pitch, that one team leader takes care of people down the line, so when they’re equipped with being able to self answer, and know, when I get to this level x needs to happen, I can, I can control that, I can do that. And to know, you know, I’m on a minimum Kanban on on x, and I’m gonna need you know, three more drill bits that come in to maximize my cotton, it’s things like that to be able to know and have all the factors in and creating that standard, and, you know, containing an issue because the standard should tell you right away when not meeting an expectation, and then we have that that’s initial problem, awareness, then we go into, okay, where’s our gap? Then we go into what how are we measuring, you know, it from a measurability standpoint, and then you go into breaking down to the contributing factors of it, when you get into the problem solving staff?


Ernie Richardson  51:13

Yeah, just add really quick, you know, really, the culture should be the problems are great, we love problems. And the more problems we can find gives us more ways to control before our customers, these are products, that it’s really a culture of, we looked problems, we want to bring problems. And if we don’t have problems, that’s the biggest problem of all. Right? You’re


Tracy Richardson  51:38

so no todos.


Patrick Adams  51:40

Absolutely. Another question that came in, we’re talking about KPIs was around intangible targets. And, you know, how do you how do you set KPIs for stuff like measuring morale or character honesty, and things like that?


Ernie Richardson  51:57

And so so so you have to be able to look at, okay, if we look at morale for an example, what are the factors that go into morale. And so those are the KPIs, we start measuring, I give you a really quick example, that if you look at absenteeism, you look at the suggestions coming out of that group, you look at voluntary activity, you look at corrective actions, and I can almost take some formula, those four or five, and I can look at any place in the organization. And I can tell you, where we’re where we have issues with morale. Matter of fact, we had that. And we’ve had what we call our finger on the pulse to be able to always be looking at the data. And we can tell you, before we have a team member come up and complain, or before we have a team member call the hotline or whatever, whatever avenue it was, which we highly encouraged, by the way, because it helps us see gaps. But we can always look at those things to be able to kill it before it happens. And morale is a kind of a funny thing, because a lot of things can change it really quickly, right? And so but so if we kind of look at what are the contributing factors to that morale, good or bad, and we measure both of those, we can be able to predict that, right. And we’ll be able to advance that actually in the way and many times it tells you, it tells you when we’ve got a bad work environment. But it also tells you sometimes when we got a bad leader,


Tracy Richardson  53:22

right, and attrition, I know a lot of companies deal with attrition. And so, you know, your absenteeism leads to the attrition. So you can see all the things that if I’m not happy, and, you know, earning, a lot of people have seen us do this either on video or at conferences, we talk about the wrinkled sheet of paper versus a clean sheet of paper, I don’t have one right here with me, it wasn’t prepared to do it. But people have seen they have a clean sheet of paper. And that’s a person coming in ready to go in the organization. They’ve gone through the hiring process. They’re eager, they’re ready. And through time, you know, as we go through the the culture may be different than what they thought or their leader may not engage with them. And we slowly bring that person, you know, down to a different enthusiasm. And I’ll always ask two questions, you know, do you believe your company has the best interest at heart for you? And then do you have the best interests of the company at heart? And when you have differing aspects of that we’ve wrinkled that sheet of paper and when you always try to take a reco sheet of paper and undo it, those wrinkles are always going to be there. And people say Oh, well, they were just a bad seed and they weren’t a good fit. And from a HR perspective, I’m going to ask deeper questions. I don’t think we brought him in that way. What did we do from a cultural perspective from a leadership perspective to not allow this person to excel and were we not live in our values? They They see them on the wall when they came in, but they’re seeing something else. So there’s, you know, there can be aspects of morale when we as a company are creating some of these things around attrition, attendance, corrective action, not engaging, not volunteering for the things that we want them to sink with. But if we don’t give them the space to think they’re not going to try too many more times, right, they’re going to shut down.


Patrick Adams  55:27

Yeah, that’s exactly right. Great, great way to close our presentation today. So for anybody that’s and I know, we weren’t able to get to all the answers, or all the questions, I apologize. But for anybody that’s looking to learn more, obviously, we only had an hour. And that’s not nearly enough time for all the amazing experiences and learnings that we could gain from the two of you. How can people access your book? Or how do they contact you if they want to reach out?


Tracy Richardson  55:53

Yeah, so a lot of folks I saw on air we’ve met on LinkedIn. So LinkedIn is a great way I try to engage on their daily and post something, I’m a share of wisdom, I share a lot of things. I made a hashtag, if you want to go back to see everything and it goes back pretty far. The hashtags sketched wisdom on LinkedIn, if you just want to follow that you can see everything. I think I’m the only one that uses that. You can see everything I’ve posted and a lot of stuff we’ve talked about here. We’ve actually posted things under that hashtag. But both of us are on on LinkedIn. I’m on Twitter a little bit. So Tracy, underscore sawn for Twitter, we’ve got the the Toyota e website, and then the what I would say for the book, Amazon, you know, is the easiest thing Barnes and Nobles has has a site. But Amazon is I think, a little more global, you can order it directly. I think right now it changes daily, but I think it’s about 30 31% off at 32. And then of course our email, so things that maybe that we didn’t get the answer. I wouldn’t suggest LinkedIn email, because that scrolls really fast with other things. So I sometimes miss folks, I know some of you probably email me on the LinkedIn email. And it’s not that I don’t answer it’s I just lose it because that scrolls so fast. And so if there’s something that we can try to answer for you, and a way that we can write it or you know, a post or something on one of the old threads that might you want to answer to feel free to do that. But this gives you from a social perspective, how to how to get a hold of us, and we hope to do more of these. And you know, just especially during this time, as we’re all kind of reopening our businesses and our worlds out there, I think the elearning parts still going to be a big part of that. So we look forward to bringing more resources to that platform.


Patrick Adams  58:02

Thanks so much for tuning in to this episode of the lien solutions podcast. If you haven’t done so already, please be sure to subscribe. This way you’ll get updates as new episodes become available. If you feel so inclined. Please give us a review. Thank you so much.

Meet Patrick

Patrick is an internationally recognized leadership coach, consultant, and professional speaker, best known for his unique human approach to sound team-building practices; creating consensus and enabling empowerment. He founded his consulting practice in 2018 to work with leaders at all levels and organizations of all sizes to achieve higher levels of performance. He motivates, inspires, and drives the right results at all points in business processes.

Patrick has been delivering bottom-line results through specialized process improvement solutions for over 20 years. He’s worked with all types of businesses from private, non-profit, government, and manufacturing ranging from small business to billion-dollar corporations.