S2E8 - Developing People and Partners

Leadership Excellence Podcast

If processes are the delivery mechanism for value…
 then people are the engine that makes them improve.

In Season 2, Episode 8, we explore the third “P” of the Toyota Way: People and Partners — and why development, not training, is the true competitive advantage.

Most organizations say, “People are our greatest asset.”

Toyota proves it.

In this episode, we unpack:

• ✅ Why respect means challenge, not comfort
• ✅ The difference between training hours and real capability
• ✅ Why development happens at the gemba, not in the classroom
• ✅ How partners and suppliers are treated as extensions of the enterprise
• ✅ Why blame destroys learning — and coaching builds it
• ✅ The inseparable link between problem solving and leadership development
• ✅ How PDCA develops thinkers, not just processes

We also challenge a common myth:

You don’t build a learning organization by sending people to certification programs.
 You build it through disciplined coaching, real problems, and structured reflection.

Toyota’s approach is simple but demanding:

• Small amounts of structured learning
• Immediate application at the workplace
• Continuous coaching
• Ongoing reflection
• Repeat

Development is not an event.
 It is a cadence.

In this episode, George and Tom discuss how leaders must shift from:

• Rescuing → Coaching
• Blaming → Diagnosing the system
• Controlling outcomes → Developing capability
• Short-term ROI → Long-term compounding growth

You’ll also receive a practical PDCA-based leadership development exercise you can apply immediately in your organization.

Key Takeaway:

If the learner hasn’t learned, the coach hasn’t taught.

Leadership development is not about transferring information.
 It’s about building scientific thinkers who can solve real problems.

Reflection Questions:

• Are you measuring training hours… or improved capability?
• Do your leaders solve problems themselves — or develop others to solve them?
• Are your partners treated as vendors… or as extensions of your enterprise?
• Where can you replace blame with coaching this week?

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Transcript

SPEAKER_00 0:32

Section 6, Developing People Teaching Objectives. In this section, readers will identify the third P of the Toyota way. Describe the type of investment needed in people and partners. Explain what is meant by problem solving. The third P, People and Partners. Toyota often describes its philosophy as a house. Dr. Jeffrey K. Liker uses a pyramid instead. The foundation of the pyramid is long-term thinking. A company exists to build something great over time. It does this through strong processes that cross departments. These processes focus on delivering what the customer wants. However, processes do not run themselves. Even automated systems must be monitored and improved. They require constant checking and adjustment. This takes creativity and judgment. That is where people come in. Originally, Jeff described four Ps, with people as the third level. A Toyota executive asked him, Where are our partners? Jeff explained that he had included them under People. The executive clarified that Toyota gives special attention to outside partners. These include suppliers, equipment vendors, lawyers, and dealers. They are independent businesses, but they are just as important as employees. As a result, the third P includes both people and partners. Toyota works to instill respect in both groups. Respect does not simply mean being nice. It means challenging people and helping them grow. It means developing their capabilities. When Toyota shows respect, even outside partners improve. For example, a lawyer who once won Phoenix Man of the Year credited Toyota for changing how he saw his profession. He said he truly learned how to be a lawyer only after working with Toyota. This example illustrates how deeply Toyota invests in its partners. Toyota invests in people and partners to a degree that is unusual in most companies. What is unusual about Toyota's approach? Most companies say they value great people. Mission statements often promise commitment to employees. However, what companies say and what they do are often different. Many companies measure investment in people by training hours. If someone receives 40 hours of training, that is considered better than 10 hours. Toyota focuses on what people actually learn. Employees must develop a rigorous way of thinking. They must also develop real skills. People do not learn skills by sitting in a classroom. In fact, the classroom is often the worst place to develop skill. The best place to learn is at the Gemba, the actual workplace. If someone wants to learn golf, they do not sit in a hotel ballroom watching someone swing a club. They go to the driving range and hit balls. The driving range is the Gemba. Toyota believes that most important learning happens on the job. The company calls this on-the-job development, or OJD. Classroom training is brief. It provides structure and direction. Then employees immediately go to the Gemba and apply what they learned. They work on real process improvements. After that, they are monitored and coached. Learning continues step by step. Each lesson builds on the next. Learning becomes continuous. Learning by doing many companies create lean departments. They send employees to universities or associations for certification. Employees earn black belts in Six Sigma. Then companies request more advanced training. However, the most important learning comes from doing real projects. The scope of the project matters. Improving an entire value stream is more challenging than standardizing one workstation. Yet even standardizing one workstation requires deep skill. A person could spend a lifetime mastering it. People must also learn leadership skills. They must learn how to bring teams together. They must lead cooperation across departments. These are complex abilities. The ideal model would involve small amounts of training spread throughout the year, combined with continuous coaching. For example, two hours a week for a year would be more effective than five consecutive days of training. However, companies often claim this approach is not practical. They argue that it costs too much or takes too much time. As a result, they ask for a five-day course instead. This is often the least effective way to learn. Sometimes a compromise is reached, two and a half days of training, followed by project work, and then another session later. However, this still falls short of Toyota's ideal approach. The most effective method is ongoing coaching, practice, reflection, and continuous improvement. The final P, problem solving. The final P of the Toyota way is problem solving. Toyota calls continuous improvement kaizen. Kaizen means solving problems every day. Toyota also emphasizes Genshi Genbutsu. This means going to the actual place to understand the real situation. Facts must be seen directly. This is essential for solving problems. Toyota speaks of true north. True North is the ideal state of a perfect process. It provides direction. The goal is to move closer and closer to perfection. This shared vision guides everyone in the company. Whether designing a fuel-efficient car, developing hydrogen fuel cells, or improving how parts are presented to a worker, progress happens by solving problems. The way to move from the current state to a better state is through problem solving. This is the dynamic force of the Toyota way. The philosophy behind problem solving. Toyota's problem solving method was influenced by Dr. W. Edwards Dimming in the 1960s. It follows a continuous cycle. Plan. Do. Check. Act. Sometimes the final step is called adjust or learn. In Japan, this cycle was known as the Demming wheel. The cycle never stops. First, the organization plans what it intends to do. Then it carries out the plan. Next, it checks the results and compares them to the plan. Finally, it adjusts based on what was learned. Those adjustments often reveal the next problem to solve. That leads back to planning. This continuous cycle of learning and improvement forms the foundation of Toyota's approach to developing people and solving problems.

SPEAKER_02 8:28

Today we're continuing our journey through developing lean leaders at all levels, and we're focused on Module 1, Section 6, Developing People. One thing that immediately comes to mind when we talk about developing people is accountability and leadership. Poor leaders tend to look for someone to blame when things go wrong. Strong leaders look at the system and ask, what allowed the problem to happen? Now that doesn't mean that people aren't accountable. They absolutely are. But Toyota thinking teaches us that blame rarely improves a process. Blame creates fear, hides problems, and shuts down learning. Development-focused leaders do the opposite. They create environments where people can surface their problems, discuss them openly, their problems openly, and solve collaboratively. If people are afraid to speak up because they think they'll get blamed or get in trouble, continuous improvement stops almost immediately. In our last discussion, we talked about long-term thinking and strong processes as foundational elements of the Toyota Way. But here's the reality: processes don't run themselves. Systems don't improve themselves, and culture certainly doesn't sustain itself without intentional leadership. That brings us to the third P: people and partners. Toyota doesn't just invest in employees, they invest deeply in suppliers, vendors, and external partners as well. They see them as extensions of the enterprise. And when Toyota talks about respect, they don't mean simply being nice. They mean challenging people, coaching them, stretching their thinking, developing capability over time. Another key point from this section is the contrast between training and development. A lot of companies measure training in hours. Toyota measures development in capability. Real learning happens at the gimba, the actual workplace, through structured practice, coaching, reflection, and repetition. What a concept. And finally, the section can uh culminates in problem solving. Kaizen, Genshi Ginzu, Genbutsu. I have a tough time with that one, George. Get your boots on. True north. Yeah. Yeah. True north and PDCA. Development and problem solving are inseparable. You don't develop people in a classroom alone. You develop them through discipline problem solving. George, when you look at this section, what stands out the most to you?

SPEAKER_01 11:39

So what stands out to me the most, Tom, is uh what a gap between this beacon called uh you should treat your people well, number one, but more importantly, people and partners are separate. I don't know too many companies that treat their partners well, that go out, visit their partners, visit the suppliers, and uh are really considering them as part of their business. Not too many companies will do that, but they have to. They gotta make this this switch. So it's a leadership responsibility and it's systemic. So let's unpack a little bit about this idea of respect means challenge. I always loved this when Jeff first said it to me, and I thought, you know, respect for people, we gotta challenge our people, we gotta push them out of their comfort zone, make them grow. So most organizations interpret respect as comfort. They don't push too hard, they don't question too much. Toyota sees it very differently. If I respect you, I believe you are capable of more. I will hold you to a higher standard, I will coach you through discomfort. So I loved what you said a couple podcasts ago, Tom, which is if if somebody makes a mistake, I'll own it. Right? And that's the way Toyota feels about it. When they go through the learning, everybody's got a coach there, and it's a 50-50 responsibility. If the learner hasn't learned, the coach hasn't taught. It's pretty amazing. So that changes everything, changes it for me, anyways. So then there's the the Gemba principle. What a what a strong principle this is, and a belief system that when you want to learn, you can only learn at the Gemba. So if you want somebody to develop problem-solving skills, you can't give them slides and say, here's your slide deck, go present, and uh you're now the problem-solving trainer. You have to give them a real problem. Uh, for companies that are really early on in the problem solving stage, I would say give all of your leaders this one card that has on it, what problem are you trying to solve? Can you imagine somebody's coming to you and they can't even identify the problem they're trying to solve at a leadership level? It has to be done. But later on, when you develop problem solvers, you have leaders. That's where many organizations still fall short. And they send people to certificate programs, they earn some credentials, but they're never really coached deeply and deliberately on real process improvement. So development is not an event, it's a cadence. You meet daily, same time every day. Kind of what what did you do? What did you expect to happen? What really happened? And what are you going to do next? What did you learn from this process? So, Tom, how do you see the relationship between problem solving and leadership development?

SPEAKER_02 14:50

George, I see them as I see them as inseparable. The final P, problem solving, it's not just about fixing problems, it's about building thinkers. When Toyota talks about Kaizen, they mean solving problems every day. When they talk about Genshi Ginbu Ginbutsu, they mean go see for yourself. Don't manage from reports alone. When they talk about true north, they mean define the idea, the ideal and move towards it incrementally. The engine underneath all of it is PDCA. Plan do check act. That cycle is not just for processes, it's for people. Leaders plan, they plan how how they're going to develop someone. They check their results, they adjust, and then they repeat. This is sort of uh the short, this is why short bursts of training rarely work. And and I agree with you, George, on sending people to certificate to get a certificate when they come back and they don't know what they're they don't know what they're doing. Five consecutive days of classroom instruction might feel productive, but without spaced repetition, coaching, and application, uh the capability doesn't stick. Toyota's ideal model, small amounts of learning combined with uh continuous application and coach and coaching, that builds depth. George, how can leaders listening today apply this methodology?

SPEAKER_01 16:41

Yeah, wow. Uh good good question. I remember way back the ratio that Jeff told me, which was for every hour of learning, there should be 20 hours of doing. So that's pretty interesting. If I do a one-hour meeting, I expect somebody to, through, through what they've learned in our meeting, go out and do 20 hours of doing. So stop asking how many hours of training, forget that, uh, that the team did and completed. Start asking what capability was improved this month, or what do we want to improve? So, from a practical lens, you know, identify one real operational problem. You got to define it as a problem, too, not the solution. So, not a theoretical exercise in this case, something that affects safety, quality, delivery costs, some of the metrics that you're trying to improve. And instead of solving it yourself, assign it to a developing leader. Now that's going to be what's called the deployment leader. They should deploy problem-solving skills. And you, as the executive, need to coach them through PDCA. This is one of the reasons that we fail. And rather than spending the time developing our leaders, what we're doing is spending the time sending them off to a certificate course to be developed by somebody else. And you, as a leader, as an executive, don't even know what's going on as far as that goes. Because the number one thing that I used to get with all of my students is my boss should be here to hear this. That's the number one comment. I'm sure you get the same thing too. Yeah. Yeah. So it's hilarious. But it's look, instead of solving the problem yourself, assign it to a developing leader, then coach them through PDCA. At the center of the Toyota way is scientific thinking. All right, with a coach. And I'm going to add that with a coach. So help them define the problem, go to the Gemba, ask what they observed. You really need to observe well. Go and watch, not go and see. Guide them to test countermeasures, then identify which ones worked, which ones didn't, reflect together on what was learned. So, in other words, you as an executive are learning as you go. So don't rescue them because that's one of the biggest problems. You want to give them the answer. You want to show them how smart you are. Well, no, the struggle builds skill. So that's what you got to do. Let them struggle, be patient. And this is where leadership maturity grows. Not in presentations, but in disciplined experimentation. Any final thoughts before we give our audience something to work on?

SPEAKER_02 19:39

Wow, that was good, George. Just this development requires patience. Something a lot of companies anymore don't have. Toyota plays the long game. They invest in people, knowing the capability compounds over time. Many organizations want immediate ROI from training, but leadership is built through cycles of practice, feedback, and adjustment. If you want a lean culture, you must build lean thinkers. George, why don't you close out with an exercise for this week?

SPEAKER_01 20:19

Absolutely. Okay, so here's our skill building exercise for this week. Uh, and I'm going to title it Development Through PDCA Exercise. All right. So number one, identify one real problem in your area as a leader. So if you're an engineering executive, what's the number one problem you want to solve? Maybe you got three problems. Just find one problem in your area. Select one of your emerging leaders to own it. And when I say own it, I really mean they're the deployment leader. You need to be the owner, right? You own it. You're the one assigning somebody. Walk them through the full PDCA cycle. Share with them the training, what they need to do. And then after you've done that, um you're gonna go through and you're gonna do the work. You're gonna break that training down into here's the real problem. So, how do we make a connection between this slide deck and what's really happening? Right? And you need to coach them through the eight-step problem solving system, if you, you know, or 8D. It doesn't matter whether it's uh Dimaic, it doesn't matter what problem solving process you have. But in this case, for the Toyota way, we call it the Toyota Business Practices. The first five steps are planning, and then you got your do, your check, and adjust. And you might want to spread this learning throughout. Okay, this is not easy, but you have to learn the stuff. And if you want to learn the stuff, connect with Tom or myself, and we'll take you through and we'll give you the slide deck if you need. But that's what you have to do after you complete your project. Uh, conduct a 30-minute reflection section, right? You always want to reflect all the way throughout. What did you observe? What surprised you? What would you do differently next time? What skill have you are you trying to improve? So write down specific capabilities that you're trying to develop. Not the result of the project, but the growth and thinking. All right. That about does it. Till next time, keep going to the Gamba, keep developing people, and keep solutions close to the chest. Don't give your developing leader the solutions that you think are there. Get them out of their comfort zone. Let them struggle.