Rediscovering the kata way

Modified Toyota continuous improvement method can

lead to the next frontier of innovation
BY CONRAD SOLTERO

28 Industrial Engineer
For years, continuous improve-
ment has been the brass ring that many
organizations have reached for but
have failed to grasp. First total quality
control, then total quality management
(TQM) held early promises for the
continuous improvement ideal. TQM,
as robust a set of principles as can be
found, eventually was deemed a failure
by many. Next came lean. With Toyota
as a point of reference, lean has been
pursued as the answer to the continu-
ous improvement enigma for nearly
30 years. Unfortunately, according to a
2007 IndustryWeek survey, as many as
75 percent of U.S. organizations that
have tried lean found it to be a cruel
mirage.
It seems that every generation flushes
out the previous generation’s concept of
continuous improvement only to find
that the newer permutation falls short
of the promise.
Recently, Mike Rother discovered
the continuous improvement method
that Toyota has been hiding in plain
sight. In his groundbreaking book,
The Toyota Kata, Rother described the
first verifiable method for continu-
ous improvement and goes on to
describe how the kata inculcates the
improvement habit of mind through
the choreographed practice of daily
improvement. Rother’s book delves
into the brain science that supports the
concept of kata and how it can provide
dramatic changes in how an organiza-
tion can improve continuously.
Nothing in the literature before Roth-
er’s book details the power of a daily
regimen for improvement. This recent
development is at the forefront of lean
understanding and is recommended
for all lean practitioners. If indeed the
continuous improvement chimera has
been slain, it can be only a matter of
time until world-class performance
becomes a crowded and hyper-compet-
itive arena from which only the fittest
will emerge. The proactive captains of
industry who first discover the way of
kata will outcompete their competitors,
whether down the street or on the other
side of the planet. The way of kata will
become a competitive advantage in due
course. This begs the question that if
everyone of consequence is doing it,
how can you stand out? Clearly, the
answer is innovation.
Innovation Engineering
Management System
The National Institute of Standards and
Technology-Manufacturing Extension
Partnership (NIST-MEP) has teamed
with Doug Hall’s Eureka! Ranch in
Newtown, Ohio, to develop the Innova-
tion Engineering Management System
(IEMS). All MEP affiliates will develop
the capability and capacity to deliver
IEMS services to the U.S. manufactur-
ing base. The IEMS process is attractive
because it provides organizations with
a robust repeatable process for inno-
vation, shown in Figure 1. This system
phases of innovation
Figure 1. This funnel diagram of the Innovation Engineering Management System is
adapted from Zachary Sorrells of Eureka! Ranch International.
should be on every manufacturer’s
radar screen since the ability to inno-
vate continuously has been identified
as the path to growth.
The IEMS process uses “the best of
the best” for the idea phase.
Ideation has been widely identified
as the “fuzzy front end” of innova-
tion. The IEMS uses 40 or so “create
tools," shown in Figure 2, to stimulate
ideation. These tools range from the all
too familiar brainstorming session to
more advanced methods such as TRIZ.
To get the best out of those partici-
pating in the ideation session and to
discern which five to six tools will fit
the four to 16 participants’ inclinations,
cultural surveys are administered. The
survey detects whether the partici-
pants are left brain, right brain or
whole brain thinkers. It seeks to distin-
guish whether the participants believe
they work in a command-and-control
setting or within a collaborative envi-
ronment. It even helps the facilitator
make sense of the proactive or reac-
tive nature of the organization. These
November 2012 29
rediscovering the kata way
the right tools
Figure 2. The IEMS uses dozens of “create tools” to stimulate the generation of ideas.
and many other cultural factors are
considered in determining which create
tools are best-suited for your particular
group.
The probability of successfully
commercializing an idea from any
create session is said to increase by 70
percent when the participants perform
stimulus mining, a form of open inno-
vation that seeks to stimulate new
and different combinations of ideas
for participants to discuss. Stimulus
mining session pre-work is a require-
ment.
An adroit selection of create tools
will produce many unique ideas for new
products, services, markets and even
better processes. The more ideas the
organization has, the more likely that
one or some of those ideas are unique
and desirable.
Beyond the initial ideation phase, the
IEMS also drives detail-oriented regard
for what your customer’s customers
care most about: their problem, the
30 Industrial Engineer
benefit promise made to them, proof
that it will work and the dramatic
difference of the innovation. Discern-
ing these 3P’s (problem, promise and
proof) and understanding the dramatic
difference is the define phase. It’s
important to understand what the
customer cares about, not what the
customer wants. As Henry Ford said,
“If I had asked my customers what
they wanted, they would have asked
for faster horses.” His customers really
cared about convenient transportation.
As with all innovation, it’s pretty obvi-
ous in hindsight.
Skipping the define phase and
moving straight to prototyping is
premature. In fact, many consider the
define phase as the cheapest form of
prototyping available. Since writing
promotes thinking, inventors must
perform a scrupulous investigation
before they can describe their innova-
tions in terms that even a fifth-grader
could understand. This evokes a more
complete understanding of the innova-
tion.
Next is the discovery phase. From
the 3P’s and the dramatic difference
previously defined, we can construct a
concept. A simple math model based
on Fermi estimating is used in this
phase to get a grip on market viability
and cost. Even though Fermi estimat-
ing only can provide an approximation
within one order of magnitude, the
resulting inferences are informative
indicators for understanding a project’s
feasibility.
The discovery phase of the IEMS
requires you to deal with death threats
before entering the expensive and
resource-intensive development
phase. Many organizations unnec-
essarily bear the costs of not vetting
projects properly before starting prod-
uct development. Neglecting this phase
induces risk-averse CEOs to consider
innovation too risky and something to
avoid.
 Next is the development phase. Far
too many organizations work hard to
speed up their development cycles,
which is wasted effort if the innova-
tion/idea has no real consumer appeal.
So even with a highly efficient product
development phase, the old IT adage
of garbage in, garbage out (GIGO) is
relevant. IEMS accounts for this huge
mistake.
For the development phase, use
tools such as lean product develop-
ment, design for Six Sigma, and even
stage/phase gate project management,
all of which can help improve prod-
uct development efforts. For smaller,
less sophisticated organizations, the
fast turnaround scientific method that
Thomas Edison used in developing the
filament for the incandescent light bulb
can be used. Within the IEMS frame-
work, the method is referred to as the
"fail fast, fail cheap” methodology. In
lean parlance, we use the word “kata.”
Regardless, both refer to fast cycling of
W. Edwards Deming’s PDSA (plan, do,
study, act) cycle as a means of discovery
through investigation and experimen-
tation.
The last step in the process is, of
course, the delivery phase.
The next frontier
For all of IEMS’ strengths, the one
gaping deficit is its inability to build an
organizationwide continuous innova-
tion culture. A recent survey conducted
jointly by IndustryWeek and TBM
Consulting made clear the connection
between companies that were able to
innovate and those that had robust
improvement capability. Organizations
that can improve internally are the ones
that have the ability to innovate prod-
ucts and services for their customers.
This should not be a big surprise.
Innovation is just improvement’s
aristocratic cousin. The processes
from improvement
to innovation
Figure 3. The comparison of an adapted version of Mike Rother’s improvement kata to a
proposed innovation kata based on the Innovation Engineering Management System.
The improvement kata
FRAMING QUESTIONS
1. What is the target condition?
(The challenge)
• What do we expect to be happening?
• List the conditions (without adjectives).
2. What is the actual condition now?
(Go and see.)
• Is the description of the current condi-
tion measurable?
– Block diagram, same every cycle?
– Takt, cycle times, cycle times vary?
– Output fluctuation, 1X1 flow, staff-
ing?
– Capacity/shifts, number of opera-
tors?
• List the actual conditions.
3. What obstacles are keeping you from the
target condition?
Which are you addressing now?
• Compare current vs. target conditions.
• Focus on one obstacle at a time. Do
not worry about finding the biggest
obstacle; keep cycling fast and you’ll
find it.
THE NEXT EXPERIMENT
4. What is your next step?
(Start of next PDCA cycle)
• Take only one step at a time but do so
in rapid cycles.
• The next step does not have to be
the most beneficial, biggest or most
important. Most important is that you
take a step.
• Many steps are further analysis, not
countermeasures.
• If next step is more analysis, what do
we expect to learn?
• If next step is a countermeasure, what
do we expect to happen?
PREPARE FOR REFLECTION
5. When can we go and see what we have
learned from taking that step?
• As soon as possible. Today is not too
soon. How about we go and take that
step now? (Strive for rapid cycles!)
for improvement and innovation are
similar. The only actual difference is
where you place the focus. For example,
consider improvement as anything an
organization does to increase produc-
Proposed innovation kata
DEFINE PHASE
1. What is the actual condition now?
(Go and see.)
• Is the description of the current condition
measurable?
– Value stream analysis (customer)
– Customer problem
• List the actual conditions.
2. What is the target condition? (The invention)
• What do we expect to be happening?
• List the conditions.
– Benefit promise
– Proof
– Dramatic Difference
DISCOVERY PHASE
– Concept
– Math model
3. What obstacles (death threats) are keeping
you from the target condition? Which are you
addressing now?
• Compare current vs. target conditions.
• Verify and validate your numbers.
• Focus on one obstacle at a time.
• Keep cycling fast.
4. What is your next step?
(Start of next PDSA cycle)
• Take only one step at a time but do so in
rapid cycles.
• Many steps are further analysis, not coun-
termeasures.
• If the next step is more analysis, what do
we expect to learn?
• If the next step is an action, what do we
expect to happen?
PREPARE FOR DEVELOPMENT
5. What did we learn from what we expected?
• If another cycle is affordable, take that step
now.
• If the death threat is insurmountable, learn
to let go.
• Verify and validate your numbers before
moving into the development phase.
tivity and/or efficiencies. Improvement
is something that benefits the organi-
zation. In contrast, define innovation
as anything that a customer cares about
and can benefit from.
November 2012 31
rediscovering the kata way
Arguments can be made that an
improvement that lowers the cost to
a customer is an innovation. Such
an assessment is fair. What we want
to avoid are games of semantics that
can devolve into petty differentiators.
Regardless, we will assume these defi-
nitions correct for the remainder of the
article.
The idea is to produce a cultural
regime conducive to constant inno-
vation. The theory is that if lean
continuous improvement can be
attained through the daily practice of
improvement that Rother describes, the
daily practice of innovation should be
able to provide similar results.
For example, Google has a policy for
innovation that they call 20 percent
work. Company engineers are allowed
to develop their own innovative ideas
during 20 percent of their workweek.
That translates to an entire day for inno-
vation in a 40-hour week. Interestingly,
50 percent of Google’s products are a
result of the 20 percent work. What’s
important to consider is how frequently
innovation is practiced in the employ-
ees’ mind. Google’s 20 percent work is
an exercise that helps build the innova-
tion “habit of mind.”
In days gone by 3M had a similar 15
percent rule that reportedly resulted in
both masking tape and Post-it notes.
This type of latitude for innovation
should not be constrained, but it must
be focused. This is where some of lean’s
concepts can help model company prac-
tices.
The innovation kata
So what will a kata for innovation look
like? The innovation kata can be a
cultural modifier, and since innovation
is so closely related to improvement, a
logical starting point might be with the
improvement kata. The improvement
kata has evolved through trial and error
32 Industrial Engineer
in actual operations. If per chance you
decide to start using the innovation
kata as depicted in Figure 3, know that
using continuous improvement tools
on the kata itself is encouraged. Don’t
take the suggested innovation pattern
as a recipe, but rather as a general
guideline.
In the improvement kata, the first
question leads us to understand the
target condition and the challenge
contrary to process improvement.
For innovation, the practitioner must
discern the challenges of the customer
first. For this reason, questions 1 and
2 of the two kata are reversed. The
second question of the improvement
kata states, “What is the actual condi-
tion now? (Go and see.)" This also is
an important measure for the proper
execution of the innovation kata.
It is best if the practitioner can go out
and be subjected to the customer expe-
rience. So, along with the development
of the value stream map, the practi-
tioner should go out and spend some
“carpet time” with the customer. Focus
groups, surveys and other methods for
collecting the customer’s perspective
also should be performed. In IEMS
vernacular, this step is called insight
mining. The idea is to gain insight into
what the customer cares about.
The innovation kata requires the
development of a current state value
stream map. Analyzing the current
state coupled with insight mining will
provide the innovator an appreciation
for the customer’s problems. As the last
bullet states, the innovator should list
all of the actual conditions.
In defining the target condition,
the two bullets used for the improve-
ment kata apply: What do we expect
to be happening, and list the condi-
tions that would make it happen. This
is achieved by developing a future state
value stream map. The first bullet under
question 2 of the improvement kata
states, “Is the description of the current
condition measurable?” For the inno-
vation kata, fully understanding the
current condition requires development
of a customer value stream map. This
activity is analogous to the measure-
ment requirement of the improvement
kata. In fact, the first dashed item in the
improvement kata suggests the use of
a block diagram, precisely what a value
stream map is.
As an addition to the listing of condi-
tions associated with the future state
map, make sure to describe the benefit
promise made to the customer. Also
mount a convincing argument that
the invention will work. It is said that
the cheapest kind of prototyping is
achieved through the articulation of the
written word.
Question 2 also transitions into the
discovery phase of IEMS. The customer
problem chosen in question 1 and the
benefit promise and proof defined for
question 2 all provide a condition-
based product or service concept. And
from the concept, a math model should
be developed.
The math model should answer two
questions: Does a viable market exist,
and what will the innovation cost. As
previously mentioned, the math model
should be based on a Fermi estimation
and is meant only as a rough approxi-
mation of the situation.
The third question of the improve-
ment kata asks, “What obstacles are
keeping you from the target condition?
Which are you addressing now?” These
questions are reminiscent of the “death
threats” confronted in the discovery
phase of the IEMS. The improvement
kata is pointing the practitioner to some
level of realization that the obstacles are
nothing more than the conditions that
need changing. This is somewhat differ-
ent for innovation. The resulting action
for both, however, is that both obstacles
and death threats are dispensed with by
using fast cycles of PDSA.
Some reminders bulleted beneath
question 3 are: Compare the current and
target conditions, verify and validate
your numbers, focus on one obstacle
at a time and keep cycling fast. These
four directives are meant to remind the
innovator that staying on track (current
and future states, validate numbers),
staying focused (only one obstacle at a
time), and carrying on further experi-
mentation (PDSA cycles) are the vital
activities that must proceed.
Question 4 of the improvement
kata asks, “What is your next experi-
ment? (Start of the next PDCA cycle).”
The five bullets under this question
remind the practitioner to choose any
obstacle and cycle fast, but that one
should predict outcomes before the
experiment is performed. This require-
ment for prediction helps you reflect.
Without predicting the experiment’s
outcomes, it becomes difficult to
identify and understand what is being
learned during the period of reflection.
Since the current conditions change
constantly due to improvements, make
an assessment after every obstacle is
overcome. Within an innovation frame-
work, reflection should be conducted
after every experiment. Recall that
Deming was adamant that the sequence
was PDSA (study), not PDCA (check).
In staying true to Deming’s intentions
and lean’s insistence on reflection,
the experimental outcome should be
reflected on by comparing the predicted
outcome to the actual outcomes.
A nuance differentiating the
improvement from the innovation kata
is that any relevant obstacle, not neces-
sarily the largest, can be chosen for
the improvement kata. In contrast, it’s
advisable to first pick the larger or more
dangerous death threats during the
innovation kata. The 3P’s and the prod-
uct/service concept must be solid. Also,
the math model must be completed.
As is true of question 4 of the
improvement kata, a similar innovation
kata should be about experimenting
and fast cycling of PDSA. There is some
evidence that fast cycling reduces the
fear of failure and makes one adaptable
to change. In the tech world, numerous
companies like Yahoo! conduct hacker
days. Even though these events are
episodic, by allowing only enough time
for the development of simpler appli-
cations, more learning gets done. Fast
cycling is imperative for invention.
Question 4 of the innovation kata
reminds the innovator that gaining new
knowledge is an important and ongo-
ing part of the process. The last two
bullets in this section require the inno-
vator to predict the outcome of their
experiments to prepare for reflection
(“S” of the PDSA). The comparison of
expectations to actual results leads the
innovator to the deeper understanding
of why something occurred, which is an
invaluable part of the learning process.
As a tool to determine if the concept
is ready to enter the expensive and
resource-intensive development phase,
the last (fifth) question of the improve-
ment kata asks, “What did we learn
from what we expected?” What was
learned should be documented.
The bullets that follow question 5
remind the innovator to keep cycling
if appropriate or kill the project if what
has been learned reveals an insur-
mountable death threat. Finally, one
last check of the numbers should be
made before moving on into the devel-
opment phase.
A faster future
As explained above, the IndustryWeek
and TBM Consulting survey revealed
that companies that know how to
improve have an easier go of innovation
and the resulting growth that comes
from it. This should not be surprising
since improvement and innovation are
so closely related.
What’s new is the realization that
the fast and frequent practice of
improvement within an organization
truly differentiates those that require
a short daily improvement routine by
their leads, supervisors, managers and
officers from other groups that prac-
tice episodic improvement like kaizen
events.
The step-by-step description of the
improvement kata emphasizes the need
for speed throughout all aspects of the
PDSA cycles. Speed is important to
keep from analysis paralysis. What was
not mentioned was the importance of
frequency, which cannot be overstated.
Frequency is the cultural modifier.
Frequency is even more important than
duration. In the supporting reference
materials from The Toyota Kata, research
indicates that the repeated (read daily)
practice of an improvement routine
changes the habits of the mind indi-
vidual by individual. PDSA cycle speed
and high frequency are the names of the
game. The leaders and managers of the
organization should practice the inno-
vation kata for 15 minutes daily in order
to build an innovation culture.
Is it any wonder that a high-velocity,
high-frequency practice will deliver
high-impact results in innovation?
Conrad Soltero is a field engineer with the
Research Institute for Manufacturing and
Engineering Systems at the University of
Texas at El Paso and a lean practitioner
with the Texas Manufacturing Assistance
Center. He co-authored The 7 Kata: Toyota
Kata, TWI and Lean Training, which was
published in June.
November 2012 33
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