“Targeted innovation requires a "single point of truth". A single source of information to guide people and to make it easy for them to find what's going on."
In this episode, we welcome Andrew Willett, Senior Expert at Toyota Motor Europe.
Together with Andrew, we explore "The Toyota Way" - a set of principles and behaviors that underlie the Toyota Motor Corporation's managerial approach. We also take a digression into Toyota's digital innovation platform, which not only positively impacts the cost and environmental footprint of the innovation activities, but also serves as a valuable interface for the employees involved. Curious for more? Then tune in!
Below you will find the full transcript for the episode.
What is the Toyota Way?
Chris: Hi, and welcome back to Innovation Rockstars. My name is Chris Mühlroth. I am excited to welcome Andrew Willett from Toyota Motor Europe in this episode. Andrew, thanks a lot for joining us. It's a pleasure having you.
Andrew: Hello, Chris. Thanks for having me as well.
Chris: All right. So as always, we start with a short 60 seconds introduction sprint. That is all about you, your career and your role at Toyota. So for the next 60 seconds, Andrew, the stage is all yours. Let's go.
Andrew: Thank you so much. I've been with Toyota since 2008. Before that, I lived in Japan for nine or ten years, not working for Toyota but other companies. And I decided to make a change. I moved to Toyota. We performed a lot for the Japanese side of the corporation, delivering new production technologies and measuring technologies from the European region. And then, from 2018, we started to change things, so we began to work more for the European side to deliver these innovations directly to them. And also because there are a lot more innovators in the region, and that's growing now. We needed to put in place some innovation management systems as well. So that's my role today at Toyota is to come up with product innovations and help to look after and manage these innovations across the region.
Chris: That's how I got to know you, Andrew. Perfect. All right. So let's move on. To get to know you a bit better. I have three sentence starters for you, and I would like you to fill in those sentences. Let’s start with number one. If I could only take three things with me to an isolated island, they would be….
Andrew: Maybe I'm going to take my family, some Wi-Fi device and my guitar. The Wi-Fi, I'm going to call for food, right? And everything else I need, so ...
Chris: Okay, fair enough. All right. Number two: To me, the Toyota Way means …
Andrew: Helping people.
Chris: Helping people, all right. And number three: I am best known for …
Andrew: So this will depend on who you ask. At home, I'm best known by my kids for saying ‘in a moment’. So this is their constant comments to me. Daddy, will you do this in a moment? Why? Because I'm so busy, and they are pretty demanding little guys. We have three of them. So that's what I'm best known for at home. At work maybe Mr. ITONICS or something like this, I don't know.
Chris: Beautiful. All right. So ‘in a moment’ and ‘Mr. ITONICS’, lovely. And now, let's start talking about innovation. Or more innovating the Toyota Way. So, of course, Toyota is famous for the Toyota Way, right, which is a set of principles and behaviors underlying the Toyota Motor corporation's approach and production system. So can you maybe on a high level somewhat and describe and introduce us to the Toyota Way? What does it mean?
Andrew: Toyota Way is something massive, and you know, when I was living in Japan, I was pretty interested in this, and I got some books before joining the company. And there's like two or three volumes of Toyota Way. So I don't think we will get through the Lord of the Rings today. But I think what people often talk about is the Toyota business practice. If I understand the other questions you entrusted to us today, it's more about this, and that's kind of an eight-step method for problem-solving, where we start, we clarify the problem, we break this down; we set some target, which is something that might be achievable from this massive, massive problem. And then, we analyze the root causes of that specific issue. And we make some countermeasures based on that analysis; then, we have to see the selected countermeasures by checking their effect. And if things are working, then we standardize those pieces. So this is what we call the kind of Toyota business practice and Toyota Way, like I say, something much, much more significant. We probably need to hire some people to talk about that.
Chris: That might be a separate episode on its own. Okay, fair enough. And following up on that, on the business practice. What is Toyota’s approach to innovation, just in general, in the context of Toyota’s business practice?
“People are the center of innovation.”
Andrew: So I can talk about my view, mainly because I think each person has an independent idea of what innovation is really about. So, I believe the people are the center of innovation, and we want to help, or I want to help all the people in the company engage in this kind of innovation. And that innovation should help people. So it should help either the person doing the job themselves to improve their processes or improve the organization on a broader basis. It enables the final customer with mobility needs or other needs depending on what future products we might have. Maybe it helps the environment and contributes to people's enjoyment. So, yeah, this is for me; it's about doing innovation that will help people in their daily actions.
Combining old and new approaches to innovation
Chris: And now, here's an interesting thing. So as you said before, a significant part of Toyota’s traditional business practices, which of course, has been ingrained in the corporate culture for decades, is defining and then closing some sort of gap. Now, of course, I guess this is highly beneficial for new members entering Toyota because they have a guideline on how to do things. They understand basically how the corporate clock is clicking to a certain extent. But now you also have both new and existing employees that try to bring in new ways, as you said, on innovating stuff, that could be new ways of research, new ways of work and so on. And obviously you do not want to reject those new ways straight away. So how can you blend those new ways of working with the traditional Toyota business practices?
"For me, the Toyota business practice teaches and guides people to think in a very logical way. And it's become like a shared language across the company. But even though we have that kind of guideline, everybody was instructed when we joined the company. We are very open to new ways to do things. It's a very diverse company."
Andrew: Yeah, good question. So, for me, the Toyota business practice teaches and guides people to think in a very logical way. And many of the people that come to the company, including myself, don't necessarily have that logical way naturally gifted to us; some people do. But a lot of people do not. So I think the Toyota Way or the Toyota business practice is precious. And it's become like a shared language across the company. I mean, if you go to Africa or to India, or somewhere else, or if you go to Japan, of course. That is one shared language in which people can talk, and everybody can kind of appreciate and understand this language. So new members that come to the company must understand this language; the reality is to apply it in some business areas is quite challenging; where maybe you don't have a massive history of data transparency, or it is a new area, so you don't have a lot of history to go from. So I think people are very aware of this in the organization, like some very standardized procedures; it's pretty easy to get going and do analysis. In other areas, you might have to set up some new processes or nodes; just like you set up a new factory, you might have to put some new processes there. And then you have to establish everything around that. So even though we have that kind of guideline, everybody was instructed when we joined the company. We are very open to new ways to do things. It's a very diverse company. The members we call members we don't call ourselves employees, and the members can bring these new ideas they have. But maybe the important point is that those ideas will become a business process in the company. And Toyota's business practices can always be used to analyze the efficiency of those processes. So if you've come up with a new idea, I want to do my job this way. And with this workflow, that job itself does not need to conform to Toyota business practices, so it doesn't have to follow those steps. But the actual process chain that's put in place may be office-based; it can be analyzed by Toyota's business practice and continuously improve, just like any other process.
Chris: That's interesting. Yeah, that makes perfect sense; that sounds interesting. And maybe let's take another example which might be a bit broader, for example, when conducting future research. While the Toyota Way as you said starts with identifying the gap. Maybe the gap might not be that evident when conducting future research for example, because there is A, no history, but also B it’s kind of trying to project something into the future, right, which is a lot of unknowns. So, how to do that? Is there still a way to evaluate the process you set in place by the typical regular principles, or is that more of an open approach? Which maybe does not fit the principles in the modern world?
Andrew: We can put it in place so each business group can implement its processes. Yeah. They have to fit the whole organization, and something's already in place, but each business group establishes some process chain for implementing that work. And, of course, those applied process chains can be somehow evaluated in terms of their business performance. But this does not mean you have to start with, you know, what's our problem? It means you could set a workflow in a place where the first step is exploration, you explore, and you might find we have so many new trends that we'd like to look at and that you're accountable from that process step. So we put this much energy into this working method. And this is what we've got as the output. And you might break that down into some words. So you can put in whatever process change you might like to do as a business unit. And I think it can also be complementary to use this in very grounded business practice. We have four years to analyze that later. And also, you put it in place for a reason. And you set some KPIs at the start, and then you follow those KPIs. So this history, I think, does not go away. But I believe we are increasingly open to people using new methods of implementing their work. That one other point in this is, in every organization you have that very kind of global targets or strategies, which the corporation puts out, right, and in Toyota at least, we have a variety of bi-directional communication where we can contribute some stuff it's got some very big targets given out by the corporation. But as they come now, there's also a bi-directional discussion about the things the members see regarding new technologies and opportunities. We can bring them to the roadmap, and we have some discussion and opportunity to say what we think the KPI or processes should be as well. So I would not see it as a tricky thing that cannot be moved out, but it's also an analytical tool.
Chris: Yeah, it is of most importance to preserve that core, to make sure that's what made it successful at least a large part of the success and still will be in the future. But it's great to hear that you have this bi-directional option and that everybody in the organization understands they can change things if it makes sense; they can do new stuff. And it's not that you're relying on the old stuff, that it's maybe not working for that sort of time anymore. That's interesting. And I want to maybe dive deeper into that in a minute with you, Andrew, but before we move on, I would like to play a very quick round of the game called ‘Either-Or’, and it's a very simple game, Andrew. It works like this. I give you two options, option one or two, and then you choose one of those options and spend one sentence each to briefly explain why you chose option number one or two. So let's start. The first one goes like this. If you would restart your career like really from scratch from the start, would you instead opt to work in a large organization or in a small one and why?
Andrew: My preference today would be for a large organization. So I have been in both. I've worked in an office not much larger than the room I'm in now. We've got quite a lot of people. That experience is also perfect. And I can understand the strong points and the weak points of that. But what I see in an ineffective large organization where the members are empowered to do things is that you can readily find people with shared interests or synergy and work together. I mean, I can do so much more with my ideas if there are people readily there to take these up and with a passion for taking them forward with a shared mission than if it's just me by myself and I have only a few people around and we're all in full load already now. So, I think the dynamic shift of resources is fascinating in large organizations.
Chris: Understood that's a great perspective. Okay, number two, would you either owe somebody money or owe somebody a favor?
Andrew: I prefer to owe people a favor, I guess. I don't recall owing anybody money in my life. It's not something I usually do. And, honestly, to offer someone a favor, I will give them a favor anyway. I don't need to owe them something.
Chris: Okay, exciting. And number three, Andrew, there is that saying that goes like: Culture eats strategy for breakfast, right? And now this is an Either-Or question. And of course, reality is not black or white. But if you had investment limitations and could only choose one to invest in, either in a culture or strategy, which one would you choose and why?
Andrew: If you consider my role in the organization properly, I will invest in a strategy to make a good culture in my team. So this may sound like a cop-out, but I can only directly control what my members do. And I can put in strategies I can invest my time to improve the working culture in my team and make that as an example for the organization. So that's my approach to business; at least, I looked at what I can influence, and there's no point in me trying to change something huge, which I cannot. So I'll put my energy where I can change, and this is my garden to look after and to contribute to the whole company's large field. If there's a dirty garden next to me, I can say hey, at least you know, I'm not going to criticize you, but I have my responsibility to try to keep my place clean - this is my philosophy.
Implementing a global innovation system
Chris: Okay, that's a fascinating perspective. All right. Well, then, thank you for that. And let's move to innovation at Toyota, as mentioned before. We talked a few minutes about a form of organizational ambidexterity, right? So, valuing and leaving the Toyota principles, exploiting what is there, but at the same time, then building the capabilities to bring in new ways of working, fresh ways of working, exploring what's next. So Andrew, when we first met, I guess you had an opportunity at hand to put in a new innovation system that brings together all the manufacturing centers. So maybe let's talk about that opportunity for a moment or two. Let's start at the beginning. How did that opportunity actually emerge? What was the starting point?
Andrew: I think the starting point was that we made this transition in our team, so we before worked a lot for the Japanese side of the company. We decided to reduce this and bring these innovations directly to European production. And I guess that changed our workload. Today it's around 80% we do for the European region, and let's just say inside of that for ourselves; we want to be sure that we bring innovation to the table that is exciting for people. We know there are people like many in Toyota's research and development. I'm not in research and development, I’m a production engineer. That may be another 400 - 500 people. They're all great minds, all great networks, and competent people. And we want to ensure that each person is bringing their novelty, and when they get their originality, they know that that's unique in the company. Or if there is an existing activity, that activity is also a sensible competitor. So we have existed together in the same space. So it doesn't mean you can't do the same thing, especially if you can do something similar, but let's at least manage those risks. And what was increasingly happening in that ecosystem is that each of these European manufacturing centers, because innovation is getting faster and faster, they also want to be engaged in this; they want to skill up their members, and then there are offers going directly to them from their local regions as other people scale up in these networks. And you need something that brings all of that together to ensure at least some single source where people can check. Are we doing this already, or what's happening in this area? So that there was that business change? I think that was critical.
Chris: Okay, that also tells us a lot about the goals you set or were in place. But from your perspective, why do you think having a single source of truth is essential? A single point, a digital platform, for example, why is it crucial to the business actually?
Andrew: Finding things can take time if we have disparate information. So you can search one, or another internal website and the other side, and maybe you don't find what you need first. But there can be many sources that need to be updated. You don't know which one is the most recent version of this information. And so it seems to us to be valuable to have at least one single source record, which can be incrementally enriched with new information as it becomes available. And this does not mean people cannot also collect their data and link it to this; it's okay. But we want that single source to guide people or make it easy to find what's happening.
Chris: Can you briefly discuss some of the most critical selection criteria for that platform?
“We decided that in this context we needed some database system, radar system and roadmapping capabilities. [...] There are many different systems, and we mapped them out in terms of capabilities to meet what we wanted."
Andrew: Yeah, so there was a research workflow that we drew up, which we would say is something close to the ideal we would like to achieve. We don't want to go into each department's specialty area, like a guy working to develop powertrain all the detailed pieces of this; that's their business, but there's a certain level of information which is helpful to share across an organization. And so, we looked at a particular workflow to achieve this with the necessary flexibility. What we decided we needed inside of that were some database systems and radar system road mapping capabilities. Those are the things we thought would be suitable everyday items in such a system. We don't want to drill down into finding cost analysis or, you know, model-based system design. It's more of a top-level system we were looking for.
Chris: Of course, I can imagine that deploying an innovation platform for basically any new system in general inside such an environment - or you described earlier - is a tremendous task, right? So how did you then facilitate and manage what I consider a change process? You have to start somewhere, including people, and engage people. So how did you manage that?
Andrew: So you're right. It was very challenging. We spent maybe 12 months or more on this process. That's the starting point for us to make some study by ourselves to say, this is the kind of thing we would like to achieve. These are the kinds of problems we see. We took that image to some key stakeholders quite early on, and not just the standard sort of business stakeholders, but also to places like human resources, you know, where they are also very interested and took a very leading role now in Toyota about how to engage the company in innovation. So it's very important to have all these different departments aware of what we'd like to do, early on. Then the necessary time is also to engage the stakeholders of other parts of the business. And to go further than that. We did a study on maybe 40 software tools. So there are many different systems, and we mapped them out in terms of capabilities to meet what we wanted. And finally, perhaps we just had a few that met our requirements, and then we put those through brutal testing and tested the best ones with our stakeholders. So with a simple demonstration system, you have to be very open to all of the criticism, cost analysis, and all of these things. But the early steps are about having the people on board.
Chris: Yeah, yeah. And I was just about to ask you on one of those aspects you just mentioned. So, of course, part of Toyota's culture and business principles is avoiding any kind of waste, right, which includes money, resources, time and so on. Time is a resource, of course, and money as well. So you have to get value from, for example, testing the platform, and as I said, brutally testing the platform, basically, from day one on, at least show that it can be valuable to your stakeholders, and how can you make it plausible that a digital platform can deliver real improvements and profitability? Is it only through showing the demonstration system and then hey, guys, this is how it would look like in production. Or do you also have to calculate some use cases, benefits, or even business cases, to go one step further and then theoretically prove on paper that there are substantial benefits?
Andrew: So well, what was necessary for us to do this? I don't know if every other organization or large organization is the same. But we analyzed some typical research or innovation workflows that we already have. That means we would go through the lateral work done, the labor cost, any expenses, and travel expenses. And we listed that up in terms of costs and CO2 impact and all this stuff, you know, like not just the cost factor, and I think there were 1,000 or more sub-actions. So we have a very long list of all these different sub-actions contributing to significant actions. And from that, we started to create different kinds of recipes. So, imagine a person implementing a project in this pattern; what is the cost and imagine we do this kind of steps? What's the price? What's the legal impact? And we even included in this analysis on our side, at least the acts like a person going on a business trip. What's their daily experience? They get ready in their house. They got in the car; they got all those things we calculated. But in honesty, we had to show maybe not all of this, so we took pieces of that to make the main business case because there are certain things the corporation is ready to listen to and act on and other items which are for us our reference. We can show us KPIs later, but it's mainly the ones that are the organization's focus that we decided to offer to sell the system.
Chris: Okay, and what were your metrics of success? Like when were you in a position to say go or no go? What criteria have to be met?
Andrew: So the first point may be coming from last week when we did those kinds of analyses for a minimum-case scenario and a maximum-case scenario. So we didn't just have one; we had all those different scenarios. And we made some metrics of success which were like these priority ones, maybe around reducing traveling, reducing attendance, so events, conferences, because of some meetings we had a lot of people going to see a considerable cost and impact for the corporation. And we were also calculating what this guy's like not doing this job today, but he's doing something else you can get some other benefit from. So those kinds of additional benefits. And the problem is we did those calculations, but then COVID struck. And if you imagine, all of that was eliminated almost overnight, so there is no business travel. Event attendance became almost entirely digital, and together with that, the cost of event attendance also dropped. And so many things were naturally eliminated by COVID . But then we noticed all these people working at home, who don't see each other in the office. There's a different metric that we started to look at: people are struggling to share information or know what's happening in the organization with this new digital environment. So this is somehow what we look at today. And as we emerge from lockdown, we think we should not go back to some of those old business methods. So this is where we try to. Even though we're coming out of that situation. There are still the opportunities we first set out to get; we've got these new opportunities with a much more digitalized environment, especially going forward with the issues in Ukraine. They know this financial situation in Europe; I think it will persist for a long time. And so I think those initial metrics only become stronger. That's my perspective, at least. So we will follow those metrics as we go forward, of course.
How to manage the change process
Chris: Yeah, I tend to agree. Okay, that's super interesting, and maybe picking up another aspect you mentioned before is, as you said, the ambition is kind of to engage, or at least reach everyone in the organization. So you want to be inclusive, right? And here's the hard one, a tricky question. So we talked about this before. But the reality is that you want to be inclusive, but the truth is, at the same time, you are obliged to manage confidentiality, a lot like confidential data, data governance, who was able to see what, who was allowed to see it and so on. So to me, this is a double-edged sword, right? So how can you be inclusive but, at the same time, ensure a proper level of confidentiality of data and information? How does that go?
Andrew: So what we did was we started with a small user group in the system; we looked at all people who can access this information when putting it in the system. And we looked at what system settings we could use and how to use a system with our existing systems. Today, we, of course, progress with more than 450 people in the system. And we're bringing into this system interim people, so we made an account we call ‘interim’, which is for people who work for Toyota temporarily, whether they're contractors or interns. And legally speaking, we are not allowed to share irrelevant information with those people most of the time. And so, we made the setup using all of the settings in the ITONICS platform so that the necessary information could be shared with those people. And then they are included. They can participate in some ideation challenges that they are invited to, just like in some events I'm not invited to either. And, you know, it's working pretty well. I think that we're shielding the information as it should be done responsibly. And those people can also participate in such an environment. They get quite an extraordinary situation that the system of bears may be very dedicated to them. With only relevant information, they don't see the broader benefit but the scope of their work. It's enough, I think, and we must use a blend of the special permissions we have in the ITONICS system and our SharePoint system, where users hold their data and complete control access rights. And we use those together. And then I think everybody can see the short they know what they're sharing with.
Chris: And, okay, so we have that, and then now, can you maybe just briefly also share some of your crucial steps in the engagement plan. You need to make people aware, right, but how could you possibly do that in an organization that is as large as yours? So how to engage people? Is there any step-by-step approach or more of a continuous approach that you follow? How do you do that?
Andrew: So there was a step-by-step approach, and when we first started, we had this core group of users who really learned about the system. Putting some examples in. And actually, significant content was input by our team, but it penetrated other parts of the organization. They also need to feel some ownership of this and be able to construct it. So a lot of the data models we have in the system today. They were developed together with other teams, some critical people appointed by the management to be able to take this forward in their departments so that they have to buy in. That, of course, is still a pilot system, and we are still getting used to this business mode. So we retain a lot of ownership in terms of admin rights. But in the next step, we would make this a little bit different. I think that for those people who've been engaged in the system and helping us carry it forwards, we will start to bring them more into this admin area and the data definition area. So it's quite an effort, to be honest. So we've trained more than 150 people directly ourselves. Because these are our data models, we say this is what we expect you to put here. And then those colleagues take it forward in the organization.
Chris: Super exciting and, you know, going step by step and ultimately make sure you can kind of control the impact and the inclusiveness at the same time, but make sure it's within the guardrails of what you have built. Okay, so super interesting instead of just opening up to everybody in the room without training and saying, "Well, do whatever you want," which would then be chaos. Then you connected well with how Toyota innovates on the way out to other things. Okay. Super interesting. All right. So, I think maybe Andrew, let's summarize a few things. What would be your three key takeaways that struck from our discussion today? What do you want listeners to take away from this episode?
“Don’t assume that just putting software in place will change behavior.”
Andrew: So I think having a single source of truth in an organization is a massive benefit, but you need to have some sensible boundaries, so that you don't invade other people's work area or try to impose something on them. The second one is getting to the end of putting such a system in is not an easy mission in a big organization. So it's best to get those supporters on board early; even if they are not the most accessible people for you in your daily job, it is best to get them on board because they will help you later in these missions. And the last point is, don't assume that just putting some software there will change behavior. So, you know, we've put some additional effort into making an engagement with people. And we have people, as I mentioned, for these key people in other parts of the organization, who are putting this asset in for us, and it's something where they need to be involved and engaged to have part of the when it's not something you can just do by yourself. Those are my pieces of advice.
Chris: Yeah. The last point is that it is imperative to correct. You just cannot throw software at the organization saying, good luck with that now have fun, but it requires a dedicated and directed asset. Now, if you look ahead into the future, Andrew, what's next? What are the next steps in your journey?
Andrew: So, as I mentioned, these are pilots, and we're going to make our evaluation. How does this mode of business work? For us? That means assessing the actuals. So how are the user experience and feedback? How much were our administration efforts and our recommendations for our next steps? You know, as it can be because how many people or how much time did we apply to the administration process? Are the users satisfied? Do they want more? We'll probably hear that, and then we must implement this software in the organization. It should look like this with this much internal and external support to make that work. So that is kind of the following mature step, let's say. And I think the more exciting side is testing some of the new capabilities that you've developed. The Gateway function looks very exciting for us regarding the potential benefit of finding companies and gaining the use of reducing some of our efforts to go out and find them ourselves.
Chris: All right. Yeah, well, that's super interesting. And thanks for those kind words. And finally, Andrew, looking back now, I need to ask you this, looking back on your professional career. So far, what would you say was your most incredible Innovation Rockstar moment?
Andrew: It's pretty easy for me to choose this one because it happened recently, and I feel excellent about it. During COVID, we made the development in Europe. It was for the Japanese side of the organization. And this was something we proposed. We had a perfect partner in Japan. And we found ideal partners in Europe to help us achieve this. They were so good at what they did. And there are some technical hurdles and business hurdles. And we overcame these, and we made an excellent product. And this was actually on the racetrack recently in Germany. So, in the business sense, it's beautiful. I think it's good for the environment. And it also contributes to vehicle performance. It was a fun and inspirational project to see this in place on the actual car, and it's not something that happens with every project. You know, many things don't go as you expect. You can get caught up in things and be another competitor, but this was quite an exciting case for us.
Chris: Yeah. And it's utterly rewarding to see some real-world outcomes and outputs, right? So that's beautiful. That's a beautiful rockstar moment. And, yeah, congratulations on this. I'd say we wrap up this episode. It was a pleasure to listen to you. So thanks again for the fascinating insights.
Andrew: Thank you for having me.
Chris: Of course, all right, anytime again, and yeah, to everybody listening or watching. If you liked the show, leave us a rating or review and share the podcast with whomever you think this might be interesting for; if you want to get in touch, simply shoot us a message at firstname.lastname@example.org. That’s it. Thank you for your time. See you in the next episode. Take care and bye-bye.
About the authors
Dr. Christian Mühlroth is the host of the Innovation Rockstars podcast and CEO of ITONICS. Andrew Willett is Senior Expert at Toyota Motor Europe.
The Innovation Rockstars podcast is a production of ITONICS, provider of the world’s leading Operating System for Innovation. Do you also have an inspiring story to tell about innovation, foresight, strategy or growth? Then shoot us a note!
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