There are many posts about the importance of leadership for Lean implementation.
If so, let’s look at what happened at Toyota under Taizo Ishida’s leadership from 1950 to 1961.
The so-called “Ohno method” became Toyota Production System.
Eiji Toyota started the “Chief Engineer (1952?) system” and “Quality Control (1961)(Which became Total Quality Management.).”
Group leader (1953) and Team Leader (1954).
Target costing (the 1950s).
Motomachi plant (1959).
Turnaround from Toyota's most significant financial crisis.
What were Ishida’s business philosophies?
[Protect your own castle.]
This is the famous quote of Ishida. What he meant by this quote is that no one else will protect you in a crisis. You have to defend yourself. So prepare yourself for the time of crisis. He specifically meant to be financially independent. During the financial crisis of Toyota in 1950, many bankers walked away from Toyota. As the leader who navigated this crisis, he learned that the best defense is to stay financially less leveraged. Ishida was very aware of cash flow and financial stability. This philosophy is prevalent among businesses in the region.
Taiichi Ohno and Toyota brought this philosophy to another level. “Castle” could be a plant, a line, or a team. Each leader of a “Unit” should act as the castle's lord. That doesn’t mean they should resist change. They should expect that the change is on the way, so be ready for it. That does not mean hiring more people. Develop the people who will be on the front line of change. Today, many plant managers cry because of a new product or machine that did not perform as it was supposed to. Ohno’s thinking was to do Kaizen so that it releases the people who understand the process. Those talents who understand the process should join the new product or process development so that they reduce the risks of problems.
Ishida was famous for being “Kechi” which means being stingy or cheap. He was famous for using the pencil until the last bit. He used every side and corner of the paper. This mentality came even before the financial crisis. Some say that “Muda” was his typical phrase.
Another phrase he used was “Peke” = “X” = defect. He hated defects. And this was before “Quality control” or any significant awareness of quality. He just hated it because of the cost.
I hypothesize that Ishida hated the gap between standard cost and actual cost. Ohno mentioned that Ishida’s questioning made him think about what is “standard.” Also, during Ishida’s leadership, “Target costing” foundations were developed. When Ishida was working in a trade house of cotton, he implemented an accounting system that closed bi-weekly (without computers) because he didn't want to run the business based on speculations. A constant philosophy I see is that he wants costs controlled so he doesn’t “gamble” on business.
Ishida was a salesman. That was his specialty. The market was in recession during his time at Boshoku (Textile). Yet, Ishida’s group remained profitable. Ishida laughed and said, “People wear clothes even during a recession. Not profitable means we are not doing our job.”
The same thing happened after the war. Toyota group was suffering, but Ishida’s company recovered first. His business started producing pots and pans to survive. Ishida was a very flexible thinker.
All the above episodes happened because of his focus on the shop floor.
He traveled to Asia to sell when the Japanese textile industry was in recession. He walked around to find new customers.
When searching for a supplier, Ishida found Honda on his visits to a repair shop. There were some recommendations, but the final decision was made by Ishida visiting Honda.
When he became the company auditor, he started “auditing” the entire company.
“My understanding of an “auditor” is someone who audits every business process. Nobody did that, so I did it with no mercy. From familiar sales division to production, in which I am a complete “amateur,” I walked around thoroughly to find faults.”
“I questioned every irrationality since I am an auditor.”
It is believed that Ishida’s episode with Ohno regarding the “standard work” happened during such a walk. Interestingly, what Ohno received from Ishida is precisely what he did to his students. Ohno walked around the shop floor and challenged his students. Also, the word “rational [合理]” is uniquely used by both gentlemen. Both include the actual shop floor matching the science/logic. Rationality was not something just on paper.
Also, this Ishida’s “amateurism” impacted the standardized work that Ohno developed. It needed something to be simple and easy to understand. It needed to be accessible whenever Ishida did his audits, which happened at random timing. But such a challenge later became an advantage since it was simple for newcomers to train. It was easy to update whenever they improved.
“I don’t know technology.”
A phrase Ishida used a lot. But that doesn’t mean he didn’t care. He cared a lot. That’s probably why so many engineers are found near him. Ishida says that he learned from Sakichi Toyoda that inventors like him are not good at business, and that is why Sakichi wants Ishida to help. This seems to be Ishida’s mission. (Ohno tells a similar story about why they need to reduce costs.)
This doesn’t mean Ishida supported everything that the engineers said. He hated “muda” machines. He hated “peke (defect)” and constantly challenged that. Ishida questioned the cost of daily operations. Yet, when it was time for investment in technology, he did spend significant capital.
When it comes to his challenge, I don’t think he answered. Ishida had no idea what exactly “standard work” was. He did not know why the defects were produced. Ishida gave freedom on how to solve the issue. He just hated the gap between the theory and the reality. He kept his “amateur” status on technology. But he kept asking questions on the shop floor between what’s been said and what is happening. His "amateurism" opened the eyes of many experts.
These are some of the topics I understood from Ishida. These are not everything. But Ishida was the leader when many ideas, which provided competitiveness to Toyota, were developed. I will summarize as Ishida changed from a company of entrepreneurship into a management.
“In a long life, we face many failures. Some of those we can laugh about them. Some of those have critical damages. But the most important thing is what to do after the failure.”
- Taizo Ishida