Monday, May 26, 2008

Success Secrets: The Toyota Production Method Part 4

I am discussing the Toyota Production System, as articulated in a great article by Clayton Christensen . Earlier posts are here , here, and here. In particular, I am attempting to broaden the scope of the discussion beyond the car business, into various business and life domains.

To review, the four key principles, as defined in Christensen's article are:

1. Highly Specified Activities
2 Clearly define the transfer of material and information
3. Keep the pathway for every product and service simple and direct
4. Detect and solve problems when and where they happen

Principle 4 , as articulated n Christensen’s article is is “Detect and solve problems where and when they happen using the scientific method”. The article elaborates the method later:

Analyze the current state of things
Document it
Formulate a hypothesis that includes an experiment with an expected outcome that could be measured and compared with the actual outcome

In my own experience, particularly with my trading activities, this comparison of expected with actual results led me to the greatest progress. But I was unable to make any progress until I documented my results with enough detail to be able to draw some statistical conclusions. This data opened my eyes and I was indeed able to make certain hypotheses about how to reduce my losing trades, and increase my performance. Often enough, the changes I made seemed to work.

Without adequate documentation, you can’t change your weight, your cholesterol, your finances, or any other measurable commodity in your life. Once documented, it is much easier to generate testable hypotheses for change.

I should mention that the documentation/hypothesis/solution process is not necessarily limited to numerically measurable events. I have mentioned Doug Newburg’s concept of Resonance from time to time. A simple journal of what seems to be working and what seems to be not working often has great results. If you feel lousy after eating a candy bar and great after a brisk walk, making a “Resonance Diary” can reinforce what is working and what is not working in your life. In my monthly reviews of my journal, I have a section I call “What works”. As I look at that section over time, I see patterns in behaviors that seem to work, as well as those I want to change.

Similarly to the other facets of the Toyota Production System, specifying an action is key to understanding it. Specifying a process is the key to consistency. And, in problem solving, specifying and carefully documenting the problem is the key step in the solution. Along these lines I also recommend some of the Kepner-Tregoe methods found in The Rational Manager .

Life comes at us in random order, good and bad, without any chapter headings or identifiable rhyme or reason. But we can take a lesson from Toyota in how we choose to order that experience, and also how we choose to optimize our actions in order to get the greatest rewards.

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