In the Toyota Way by Jeffrey Liker(2004), the author identifies 14 management principles that make Toyota the world’s greatest manufacturer. One of these 14 principles is “Become a Learning Organization.” Many have tried to become learning organizations, but, according to Liker, no one has succeeded like Toyota. Toyota’s learning organization has three key elements according to Liker; I will touch on each of them:

1. Identify Root Causes and Develop Countermeasures. Toyota identifies root causes primarily using a very simple method called the “five why’s.” This simply entails asking the question why as many times as possible to determine the root cause of a problem:

Figure A (Source: Peter R. Scholtes, The Leader’s Handbook, McGraw-Hill, 1998)

2. Use Hansei: Responsibility, Self-Reflection, and Organizational Learning. In a nutshell, this concept is about reflecting on mistakes/weaknesses and devising ways to improve. Hansei is a concept that Toyota uses as a practical improvement tool like Kaizen. Toyota actually conducts Hansei events (like Kaizen events) to improve products and processes. As hansei is utilized, the improvements are fed back into the organization and disseminated.

3. Utilize Policy Deployment (Hoshin Kanri). This is Toyota’s process of cascading objectives from the top of the company down to the work group level. Aggressive goals start at the top level and each level develops objectives to support these goals. Many systems like this are being used at companies across the United States, but often they are failures because the objectives rarely support important company goals: they usually are put in place to ensure that an individual gets his/her incentive! At Toyota, objectives are always measurable and concrete, and they always support executive level/company goals. The process as it permeates the organization follows the simple PDCA (Plan-Do-Check-Act) process. This ensures that the success is being measured and monitored on a regular basis.

The last point that Liker makes regarding Toyota’s learning organization is the number of years it has taken for Toyota to achieve its success. For example, it took Toyota more than a decade to build an organization that even comes close to the learning organization it has in Japan. Toyota succeeds as a learning organization ultimately because it has relentlessly pursued success rather than pursued several flavors of the month over years with little results.