A3 STORIES

These materials are from Jeffrey K. Liker and the book, Developing Lean Leaders at All Levels.

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THE HISTORY OF A3 STORIES

A3 history, in a sense, is disappointing because you would like to think that there is some breakthrough when somebody said, Eureka, I've discovered the A3; this has got to be the Toyota Way, but it didn't really happen like that. What happened was that the A3 report came out of a need. Someone said that we need to document the process as the process goes on--that's part of the Nemawashi process--and then we would have something to show somebody.

When you show something to somebody, it's your responsibility, and you want to show it in a way that is as clear and simple as possible. So short is better.

Signing a big report with tables and tables of data is almost certainly going to be a loser. You should expect that people will read at the meeting or they will glance through the report, but they won't necessarily see the most critical points.

The purpose of the A3 is: how can we get the most critical ideas on one piece of page so that the people we're showing this to and talking to and our coach can understand the key points and follow our thinking process and give us feedback.

Why A3?

A3 is roughly presented on a 11x17 size page. At the time A3 started, the main method for communicating was by using a fax machine, unless recipients were in the building. The biggest paper you could run through a fax machine was 11x17. 

Nobody came up with a model to optimize paper size; it was just the biggest they could fit through the machine.

A3 in Toyota is referred to as a story, and the reason for the story is because a story is something that unfolds. Compare this to the definition of a report; a report is something you do at the end when the story is over. 

 A lot of what you'll hear, formally coming out of Toyota, about A3 reports was that they were actually developed by Americans. For example, at the Toyota Technical Center in Ann Arbor, they realized that American managers had not been formally trained in problem-solving. It was assumed that they were. The original Toyota employees had one-on-one coaches, Japanese coaches, and the coaches would show them things like the following:

• How to make a report on one side of one piece of paper
• How the report should look like when it was finished
• How they would support them and help in creating the story

Ultimately, they learned how to create an A3 story, but they did not call it that.

Later the Americans developed a course on Nemawashi; they also developed a course on the problem-solving process; later they developed an A3 course where both problem-solving and Nemawashi courses were prerequisites.

Americans formally defined the different types of A3 stories that they learned from the Japanese. 

PROBLEM CONSCIOUSNESS to CURRENT SITUATION

This visual shows 4 different types of A3 stories. They range in a certain sequence ranging from your original consciousness that there is a problem, to your current situation.

The proposal story is; when you're conscious there's a problem, and when you're developing your proposal to work on the problem. 

Then the problem-solving story starts when the proposal has been approved. You are now going to work on the problem, and you're going through, for example, Toyota Business Practices, at various stages of the problem-solving process. 

At several points in the problem-solving process, or even in your daily work, you may have to report on the status. For daily work, it may be the status of production, of quality, of safety or some other key performance indicator, and you might want to communicate that based on an A3. You would show key data only and indicate the status of where you are. 

Another type of A3 arises when you want to share information; for example, you may learn something technical in body engineering that you want to share with all the other body engineers, and that might be an information story. Again, this would be on one side of one piece of paper stating the problem that you had and your solution with supporting data. 

These are all different A3s.

We're most familiar with the problem-solving story. I'll talk briefly about the others, and then I'll focus most of my time on the problem-solving story. 

 A3 REPORT: PLANNING VITAL POINTS

There are some general vital points--deep points in any A3 report--regardless of which of the four types you are considering. One point is that you should take time to grasp the entire situation before you start the A3. That means considering a wide range of information sources. 

Considering others is what Gary did: going to key leaders and doing Nemawashi. This step is a way of forming your team that's going to execute and lead the problem-solving process. 

Try to find facts, not just opinions, and when you get an opinion you must become like an investigative reporter to learn the truth.

Also, consider some of the long-term effects of what you're working on and whether this is a short-term fix or whether you are trying to accomplish something that others will build on long term. 

What kind of story do you need to tell? Which of the four?

Who's the audience?

What information would be useful for them?

What are the company's values and philosophies that this particular story can relate to? 

You must tell the story in the context of those values.

I'll give you one quick example. Years ago NUMMI, Toyota's joint venture, was closed, this humongous plant was available. Toyota arranged for Tesla to move into the plant. Tesla was a very small manufacturer of electric cars, a very innovative company. Toyota ended up investing in Tesla.

There was a famous announcement at that time where Akio Toyoda announced that, “We're participating; we're partnering with Tesla because we want to learn from them.”

Toyota wanted to learn; they wanted this excitement, drive, and the dedication towards innovation, to rub off on Toyota engineers who had been around for a long time in a bureaucracy.

 I saw a project for the Rav4, which involved putting the Tesla power train into a Rav4, and it had to fit the transmission of the Rav4. There were many problems to be solved and one of the challenges was that there was proprietary technology in Toyota's computer modules and also in Tesla’s computer modules, so they could not share the code with each other; they had to view it as a black box and understand the inputs and outputs and what happened when they tried something.

They had a very, very tight deadline, about half the time it would normally take to do something like this, and in the A3, the team said their goal was to learn a new level of innovation and a new level of teamwork by working with Tesla.

So, obviously, they needed to get the Rav4 out into the market; that was the business purpose, but the people purpose involved the value of being among the best innovators in the world; that was the value they really tapping into. They reported how well they learned based on the value of innovation. 

There are a few more vital points.

If you're a novelist, there should be a flow to the story, some sort of logical sequence. A plot.

In this particular case, we’re not going to elaborate like a novelist might; we only want key points; bullet points for example, not paragraphs; and using graphs and visuals is always preferred to using words.

Every word should count; it should be specific; you should avoid jargon that readers of the report won't understand. 

You need to define acronyms.

Consider yourself an artist reporting on a box. The reader, the audience, must be able to visualize that box. The information should leap off the page.

TELLING A PROPOSAL STORY

The starting point is a proposal story. There is no plan or goal, but a company value needs to be addressed. We can also use this proposal story when we have some idea that something can be improved upon. 

It could be an idea about how we're going to improve the customer’s experience at the dealer. We’re going to make it much, much more fun, and pleasant where our focus of customer first is the value to improve upon

The plan or goal may exist, but the company value or policy might have changed, or the environment might have changed, so you need a plan to address that change.

Or maybe a completely new direction is required or a completely new policy. You need a goal or a plan for that. 

As an example, one type of proposal is a budget. One time I visited the Toyota Technical Center, and I was interviewing this vice president and he was huffing and puffing, and he said he just finished this big report he’d been working on for the last four weeks.

What was the report? It was the entire budget for the Toyota Technical Center, thousands of people, and it just occurred to me to ask was this an A3? He said, “Yes, of course.”

He was talking about the entire budget for the Toyota Technical Center, including the rationale for the budget on one side of one sheet of paper.

At that point, that report was a proposal saying, “With all the Nemawashi and all the work I did, here's what I'm proposing as the budget. No decisions will be made until that report is reviewed.” 

PROPOSAL STORY FORMAT

The format can look like this, and I personally am not a stickler for having a standardized reporting method where every box is exactly the same. You may need to make modifications for something like a proposal story or a status report for any number of particular situation.

As with a good book, you have an introduction. There's a flow; there's a plan; there are issues that you haven't been able to resolve, and there is a detailed schedule for how you would put this proposal into practice.

If you considered the budget story I talked about, it would look different. In his particular case he's dealing with the budget for the entire Technical Center. The introduction does not have to be long; it’s routine regarding your annual planning cycle; you're simply stating that this is the proposal for the annual budget. For the Toyota Technical Center this is probably enough of an introduction.

The proposal itself is going to be the budget along with rationale, so that's going to take up most of the paper. The plan might be the process of getting the budget approved. If there are unresolved issues, they should be stated; maybe there are; maybe not, but there may be some items where there was a guestimate because he's not so sure about; and what he wants to point this out. Finally, there will be a schedule and the final end point might be when the budget is approved.

There isn’t much paper for a complex budget; so, in this case, information on the budget will consume most of the real estate provided by the one side of the one piece of paper.

STEPS TO A PROPOSAL STORY

The steps for the proposal story start before you develop the plan, before PDCA.

The proposal story starts with grasping the situation, and that's going to lead to naming this proposal, giving background information, and describing the current situation. 

The plan would then be the recommendations, if it's a proposal that involves buying something. Cost benefits must be provided.

Implementation details are required along with statements about how you're going to follow up to know if you're successful.

You're not actually going to the stage of act because if the proposal is approved, the PDCA cycle will be executed for what has been approved. 

PROPOSAL STORY DETAILED FORMAT

This gives you a little more detail about the format and appearance, and what might be in the boxes. Again, I don't want to claim there's a one size fits all, but it shows you the introduction as the basic concept, strategy, and the big picture. 

The proposal is what we going to do; how are we going to deploy it? Then the plan follows: what/how, why?, what, who. 

There might be some unresolved issues to overcome; some obstacles preventing us from achieving our plan, as we go forward and try to execute this. Finally, there is the detailed deployment schedule. 

The deployment schedule could be for getting approval for the budget, in a budget proposal A3. It could also be getting approval for some initial schedule for a problem-solving process. 

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