WHAT IS TRUE NORTH?

The article below is from the Shingo Research Award winning book, Developing Lean Leaders at All Levels authored by Jeff Liker with George Trachilis. 

WHAT IS TRUE NORTH?

I'd like to talk about one of the more important concepts in the Toyota Way to Lean Leadership- True North. The idea of True North seems self-evident. Anybody who reads a compass anywhere can be assured that one direction, north, will be indicated, and then based on that, you can determine whether you are on path or off path. If you are in the woods you will not know exactly what's between you and your desired destination, but at least you have a sense of direction and that's the meaning of True North within Toyota. True North gives you a sense of direction. It doesn't mean you'll ever get there; it just means that True North is the ideal state. True North could be thought of as the North Star. For example; some companies use the term the ideal state. Another example would be the Toyota Way 2001 house which has pillars of Respect for People and Continuous Improvement.

When I was being interviewed during the recall crisis, a lot of bad things were being said about Toyota, it was common for journalists to ask me What's wrong with the Toyota Way that allows this to happen? From Toyota's point of view that doesn't make any sense. The Toyota Way had nothing to do with anything that happened, regardless of what you think happened. Toyota is the company; they are not True North. Toyota is a company that defines True North and strives for it. You can define True North at multiple levels. For example, the Toyota Way 2001 (or even deeper they have what they call the Toyoda Precepts) and those are long lasting maybe forever as a vision of where you want to go but they're very general. Toyota also defines a global vision every ten years. Now they're up to Global Vision 2020. Global Vision 2020 gives you the True North for the next ten years. Their focus is on being the best in mobility and putting a smile on the customer's face. That focus provides an image, and you could judge what you're doing based on whether it's consistent with that image. But the image doesn't tell you exactly what to do. Toyota will back off and have a five-year plan and have an annual plan through Hoshin Kanri, which was also talked about in the last part of the course.

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You can look at the ideal state again as True North, and you can have that ideal state for something as simple as your laptop. What would your laptop look like if it were in the ideal state? What would your mailbox, inbox, all your folders look like if they were in the ideal state? For example, the ideal state for your computer might be that everything is located within the defined space and is simple to access with no more than two clicks. Another interesting thing is discussed by Mike Rother in his book Toyota Kata. He talks about a target condition as being a lot of the things that we think about, but in reality should be viewed as ideal state.

 Let’s take takt as an example. We view takt as something to be accomplished where we are on takt or off takt. The gap might indicate that we have a big problem, but we could also look at takt as the ideal state. Takt is the rate a customer demands. If we're building in every part of our enterprise including the supply base to the rate of customer demand or if in a service organization we're exactly satisfying customers as they came through the door and needed help then we would be achieving takt. In reality we almost never do that, like we never do that.

There may be a certain part of the operations who are building to some sort of takt; for example, final assembly might build to takt, but the reality is likely to be building to some average customer orders, not exactly the orders as they come in one by one. Then what you build may go to a warehouse and not directly to the customer. In the case of Toyota, their assembly line moves up to takt, which again is an average; it's not exactly the customers’ demand. There are upstream operations like stamping and paint, and they don't build to takt.

Stamping doesn't build to takt because they build in batches. Now would Toyota like Stamping to build in takt exactly in sequence one part at a time like the assembly line? The answer is yes. That would be the ideal state, but at this point, because of changeovers in Stamping, they cannot achieve that. It is uneconomical. So again, the idea of True North or the Ideal State is to give you a picture of perfection, and you're striving for perfection. So you know that there is always a gap between where you are even when you achieve some great step toward perfection. One important benefit of thinking in terms of True North or an ideal state is that no matter how good you get, no matter how good you are compared to your competition, you could always see a huge gap. Therefore, you could also see huge opportunities which create the spirit of challenge, one of the underlying values of the Toyota Way.

 I was talking to a leading TPS expert in Toyota, and he wasn't thrilled with the terminology of True North. He said, “Yes in Toyota we talk about True North, and that's okay, but that's theoretical.” I think a simpler term is ideal state, because when I work with an actual company (he is working with outside companies of Toyota), he says they can easily understand the ideal state, and we can define the ideal state for whatever process we are working on, but True North is a little bit too theoretical. So whatever terminology you use, you're trying to put a stake in the ground out there that's so far away that it is literally impossible to achieve. It would require absolute perfection to achieve. The point is to have a guide and to know if we're going in the right direction. And if we see a big gap, we will be motivated to improve. Hopefully that helps clarify this concept.

Dr. Liker and George Trachilis Challenge

1.     What key points did you hear from us about Lean Leadership?

2.     Where did you see key gaps between where either you or your organization whatever you're evaluated on the last slide, what are the key gaps that you need to start to work on in order to encourage leadership and self-development?

3.     Finally develop a personal plan. 

What can you as a leader to work on to begin your self-development? Part of that requires a coach.

Now you may not be able to run to your boss right now and say go hire me a professional Lean Coach. So you have to find somebody, and there's lots of different way to find somebody. I have a friend who actually went on the internet found somebody and through one of the social network programs ask that person if they would do coaching online virtually and that person was honoured and said yes and that person really changed the life of my friend. So there's a lot of creative ways to find coaches. George has a website – https://leanleadership.guru and there is coaching provided as part of the course. Take advantage of any opportunity you have to find and use a coach.

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Do you want to develop mastery in Lean Leadership?  

Contact me any time to discuss your needs at https://georgetrachilis.com/contact-us/.

 George Trachilis, P.Eng., Co-founder, Lean Leadership Institute.

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