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Principle 12: Align Your Organization Through Simple, Visual Communication

“In business, excess information must be suppressed. Toyota supresess it by letting the products being produced carry the information.”
Taiichi Ohno

After all, product development is information flow among many specialists. Stop communication, stop information flow, and you stop product development. Now, instead of “throwing the design over the wall”, engineers are taught to communicate concurrently with a team of upstream and downstream specialists – across functions.

Given that everyone agrees that communication is crucial to good product development, what is left o say on this subject? Actually, quite a bit, including the fact that more communication is not necessarily better. And that sometimes face-to-face communication is not as good as written documents. And that large-scale collocation may not necessarily be all it’s cracked up to be.

Chief Engineer’s Concept Paper: An Aligning Document

The concept paper is highly confidential, typically runs 15 to 25 pages in length, and text is supplemented by tables, graphs, and sketches intended to provide the team with a single unifying direction and decision-making guideline. With this document, the CE aligns many functional specialists efficiently toward a common vision.

The way the concept paper is conceived and delivered illustrates the importance of having a clear delineation of roles and responsibilities. It lays the groundwork for knowing what to communicate and what not to communicate. The lean view of communication is:

  • If everyone is responsible, no one is responsible.
  • If everyone must understand everything, no one will understand anything very deeply.
  • If all communication is going to everyone, no one will focus on the most critical communication for their role and responsibility.
  • If you inundate your people with reams of data, no one will read it.

At Toyota, while there is a great deal of information shared across functions, it is targeted information. When a prototype of a vehicle is being reviewed, each engineer represents a function.

The Cross-Functional Obeya

When cross-functional communication became a standard at Toyota, it was originally handled through targeted meetings or reports and the CE’s integrating role. But the practice took a major leap forward with the development of the obeya or “big room”. There are some unique features of the obeya:

  • Engineers are not collocated. It is the engineering staff leaders (leaders of each functional group) who meet with the chief engineer regularly. These engineers managers have desks in their functional organizations and come to the obeya regularly (often daily) for long, collaborative work sessions (not traditional meetings).
  • Visual management is key to effective communication. Engineers plaster the room’s walls and “mobile walls” with information organized by vehicle part. The functional head responsible for that part of the vehicle is responsible for posting and maintaining the information, and this information allows anyone “walking the walls” to assess program status (quality, timing, function, weight) up to the day.
  • The obeya has evolved through careful PDCA. One of the innovations the PDCA process has produced is that, as a program progresses, moving from engineering to prototyping engineering facilitates to preparation of production in the plant, the obeya is also moved. To accommodate this, the “traveling obeya” was developed to move downstream to the plant as the program moves downstream. An additional modification was to incorporate the module development teams into the obeya process. Each modification in the obeya has been deliberate, studied, adjusted, and then standardized across programs.

Through regularly scheduled (but selective) cross-functional meetings of key leaders, Toyota has improved the functional organization by facilitating quick decision making.

Alignment Tools

Any company that employs 500 to 1000 technical professionals working on pieces of a complex system and several hundred suppliers developing and testing components must have a system for aligning these individuals and their work. Alignment means you harmoniously bring together all the individual inputs from various people at the right time to achieve the desired objective. There are limited number of ways to make this happen:

  1. Individual level. Each person can operate independently. If the technical requirements are crystal clear and if all these individuals have the skill and knowledge to do exactly what is required, they can join their separate inputs and it will all fit together. This would require very detailed and unchanging technical requirements.
  2. Team level. One big team can hash out each and every detail in meetings or virtual meetings to come to agreement each step of the way. This is obviously time consuming.
  3. System and subsystem level. This means dividing an overall system into relatively autonomous subsystems. The subsystem teams, following clear standards, can work separately to ensure integration within each subsystem and to meet the overall requirements necessary for the subsystem to work together.
  4. Horizontal integration. Different individuals and subsystems work separately while an “integrating force” ensures the work is well coordinated across parts of the system. This type of integration is best facilitated by a super integrator who directs a number of people in liaison roles or by cross-functional task groups.

Toyota uses all of these methods in varying degrees.

Nemawashi at Toyota

Nemawashi is not a tool in the traditional sense, but it is a key to integration and underlies the use of many other tools, such as A3 reporting. Nemawashi is about achieving consensus among stakeholders prior to the actual formal decision-making event. Nemawashi in product development usually involved communicating relevant data or information to the appropriate PD team members and holding small, informal, usually technical, discussions about potential solutions to design or manufacturing challenges.

The Ringi System at Toyota

The ringi system is a more formal decision-making process used for handling significant decisions. In the ringi process, a small team of people with the necessary expertise is assigned to analyze some specific issues or challenge and recommend a solution. At the conclusion of the analysis process, the team creates a decision document called a Ringi-sho, which outlines the challenges, the countermeasure, and the potential implications, both positive and negative, of adopting the proposal. The team then meets with all managers who will be affected by the proposal and requests their approval. Sign off on the proposal is traditionally done with a manager’s hanko, a personal stamp used only by managers at a certain level.

Hoshin Management at Toyota

Hoshin management (a.k.a. policy deployment) is an effective tool for aligning an organization toward the achievement of broader goals or objectives and allowing that organization to react quickly to a changing environment. In a lean organization, hoshin kanri is generally an annual planning tool that aligns the organization’s long-term vision with its shorter-term activities while also aligning the efforts of people in the organization with the goals of the organization.

Toyota’s A3 Problem-Solving Tool

A3 refers to standardized communication format, a disciplined process of expressing complex thoughts accurately on a single sheet of paper. A3 is a standardized technical writing methodology to create a report on one side of a standard size piece of paper to guide problem solving and achieve clear communication across functional specialties.

Communication and Alignment at Toyota

Many companies have tried to implement similar communication methods and alignment strategies. But whether they use management by objectives, project management, stage-gate models, consensus decisions making, collocation, resident engineers, cross-functional teams, or even A3 reporting, few seem to do this as effectively as Toyota.

The probable cause for this distinction is the way a company assigns roles and responsibilities, follows through on managing these, and whether it provides a minimum degree of organizational stability needed to make these tools work. Toyota, which has a very strong functional organization with across-functional integration, through the chief engineer system excels at cross-functional communication because it provides a working environment that is stable, standardized, and continuously improving.

Ultimately, alignment and effective communication give a company the ability to develop standards throughout the organization. People critically evaluate and improve on these standards, creating revised standards as needed. This is, in fact, the backbone of learning as an organization.


In Summary:

Align your organization through simple, visual communication

It is fairly obvious that communication is a good thing in product development. You cannot develop new products without good communication. But LPDS recognizes that you can get too much of a good thing. Communication should be targeted, sufficient, accurate, and focus on the essential facts. Toyota has developed a number of mechanisms to aid effective communication. The CE paper provides important program direction and creates alignment. The pbeya system is a mechanism for on-going cross-functional communication and status tracking. Nemawashi, the ringi system and hoshin provide tools for organizational alignment. The A3 process helps to bring discipline and standardization to improve the effectiveness of all types of communication – especially communication about problem solving.

Source: Liker, J.K and Morgan, J.M, The Toyota Product Development System: Integrating People, Process and Technology, Productivity Press, 2006


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