Bringing agility to Toyota
Roberto Priolo: Can you briefly introduce Toyota Connected to our audience?
Nigel Thurlow: Toyota Connected was created as an agile startup to help Toyota respond quickly to changes in connected-car technology. We are not just talking about self-aware cars, but about providing a wide range of connected services to vehicle owners to meet their mobility needs. This is the vision of Toyota's president, Akio Toyoda, which we try to execute by leveraging all the digital tools at our disposal, from artificial intelligence to the internet of things. We are an affiliate of Toyota Connected in Japan, created by Shigeki Tomoyama, president of Toyota Connected, at the request of Akio Toyoda himself, originally to examine the data capabilities of connected vehicles and what we could do with all the information our vehicles send us to make driving safer, more convenient and more fun.
RP: Toyota has been on an agile journey for almost two years. Can you please put this in context and share some of the things the company is doing to increase its agility?
NT: First of all, let me say that what many people call an “agile transformation” is actually an organizational transformation to enable us to be more agile, and scrum is one of the approaches through which we are achieving this. Toyota Motor North America, our sister company, began its agile journey in its 5,000-person IT division because it wanted to deliver value to our internal and external customers faster, at lower cost and with higher quality. Agile is an empirical approach we are using to solve complex problems. Naturally, we are still fully rooted in the Toyota Production System (TPS) and in the values that define the Toyota Way, but we also recognize the need to improve our ability to deliver better, lower-cost solutions faster and to adapt to changes in customer expectations.
Since the early days, we have grown significantly, beginning to provide software solutions for mobility. We have many projects under way, from Google Apps to the Hui car-sharing service in Honolulu, in partnership with Servco Pacific Inc, from integrating Amazon's Alexa into Toyota to studying data science and artificial intelligence. We practice and teach the principles of TPS and the Toyota Way, but we are also an agile company: our small collaborative teams sit together in open-plan offices, with obeya rooms, visual boards and andons all around.
We are defining what agility means for Toyota as a global corporation. We have taken a lot of knowledge from the industry and we are giving back to the community by trying to find synergies between the TPS/lean and agile worlds. We recently launched a public offering called scrum, the Toyota Way, for example. We continue to learn new things and we evolve as our understanding of this world deepens.
RP: Many organizations seem to struggle to embrace the digital world. What does Toyota have that helps it seize the opportunities offered by digital technology?
NT: Its DNA! Everyone at Toyota understands the customer-first promise and the basic principles of TPS and the Toyota Way. When we discuss the value of adopting new technologies and the digital world, we always have our DNA giving us the reasons why we need to do it: our customers. Other companies are often driven by other motives, putting shareholders and profit ahead of the customer, which, of course, creates enormous challenges when it comes to trying to change the situation. Even when they are trying to become lean, they focus more on resource utilization than on generating flow of value. At Toyota, we are very aware that the focus on delivering value to customers through our transformation makes everything fall into place.
Our industry needs to recognize that if they cannot become more agile, they will struggle to remain competitive. Having an agile approach gives us a better and faster way to deliver value to customers, given the technology and methodologies available to us today. We need to be able to make faster decisions, deliver more quickly and remain competitive in a constantly changing market (cost, quality and delivery - it all comes down to that, really). In addition, and this is where lean and agile come together again, when you start working transparently, waste becomes incredibly easy to see and, therefore, to eliminate.
RP: A lot can be said about the relationship between lean and agile, with the two communities often eyeing each other suspiciously. What do you think about that?
NT: This is a small world. Read the Agile Manifesto, written in 2001 to codify a set of values and practices, and you will find a lot of lean thinking in it. Scrum - the predominant framework of agility - was based on Toyota (and what everyone calls “lean”) and on DuPont's principles and is nothing more than codified PDCA. How much time should be spent planning, doing, checking and acting? And what is really happening in each of these phases? Scrum tells you all this, providing discipline around PDCA. Looking back at NUMMI, John Shook once said: “To change a culture, you first need to change behavior.” What we are doing at Toyota is using scrum as a behavioral framework to run faster PDCA cycles. Another example of the great compatibility between these two worlds, which we are currently studying in depth, is the role of the product owner in scrum, which is exactly the same as that of the chief engineer at Toyota!
There is no doubt that lean is deeply rooted in our beliefs as agile thinkers. In fact, lean is the root of all agile approaches and techniques. But what we need to understand first is that agile is not saving lean, and lean is not saving agile: the agile movement is enabling companies that are already lean or that want to be lean to make decisions faster. We are using foundations such as scrum and tools that come out of the Toyota Production System to enable business agility, thereby developing the capability to respond more quickly to market trends. “Agility is not the goal. It is an outcome," we always say. The truth is that you don't do agile (just as you don't do lean); you become agile by following various practices and techniques.
There is a great synergy between agile and lean. The irony is that one is based on the other, but when you start becoming more agile, you will become leaner more easily.
