Getting on the Same Page Through Nemawashi

April 26, 2009 - Tags:

Toyota Way Principle 13 includes the important process of nemawashi: Make decisions slowly by consensus, thoroughly considering all options; implement rapidly. The process of nemawashi is often used to describe how junior people build consensus by developing a proposal and circulating it broadly for management approval. In the nemawashi process, many people are giving their input and this generates consensus. By the time the formal proposal comes up for a high-level approval, the decision is already made. Agreements have been reached and the final meeting is a formality. Though this is a typical process at Toyota, there are many different ways to achieve consensus. If suppliers or other parties could be affected by a decision, their input is required as well.

For example, in 2002 Toyota became aware that a planned mega-development near its Arizona Proving Ground threatened the long-term water supply of the entire surrounding area. Toyota took legal action to stop the developers and worked to get a citizens committee organized to protest the plan. But instead of taking an adversarial approach, Toyota tried to get consensus from all the parties involved—the developer, the surrounding towns, and their local governments. And they searched for a solution all could benefit from. Ultimately, the developers agreed to set aside 200 acres and pay several million dollars in infrastructure costs to create a groundwater replenishment site. Basically, for every gallon of water they used they would purchase a gallon to replace it in the aquifer. As Mallery, who led the consensus-building process, explained:

The Mayor, the developers, and the citizens’ committee—all of the contending parties agreed that Toyota had served each of them well and had satisfied all of the parties from each of their perspectives. The town ended up with a more responsible, long-term solution to groundwater subsidence concerns, the problem was solved for the developers, who would have had to address it eventually—maybe 30 years from now. And it helped the surrounding communities that are concerned about irresponsible growth. Everyone came away with greater respect for Toyota—not only what Toyota did but how Toyota did it. It is the what and the how that makes the difference—protecting the land for the next 50-100 years, not just for the short term.

In simple terms, Toyota turned conflict into consensus and created a win-win environment for all parties. From the perspective of a lawyer, this is very unusual. Once you go to court, get involved with local politicians, and take sides politically, the usual assumption is that you are fighting against somebody to win. You win; they lose. Toyota was not satisfied with this, as Mallery explained:

Achieving consensus—it’s a belief in reason. Let’s work it out. It’s a combination of reason and pragmatism with this overlay of integrity and excellence. We were in a political campaign, but Toyota had no thoughts of smearing anybody. There was no negative campaigning.

Now let’s translate this consensus-building behavior into a company’s day-to-day business. Inside the company, everyone is supposedly on the same team. There is no reason to act in an adversarial way. Yet, the most common problem I hear in large corporations is the “chimney” phenomenon. Many different groups are in their own chimneys and seem to care more about their own objectives than about the company’s success. These groups could be functional departments like purchasing, accounting, engineering, and manufacturing or they could be project teams that are implementing new software or even implementing lean manufacturing. These groups often seem to act as though they want their particular department or project to get all the resources and their perspective to dominate in decisions—they want to win at all costs, even if other groups lose in the process.

Not so in Toyota. The same process used to gain consensus with these outside community groups in Arizona is used every day to get input, involvement, and agreement from a broad cross-section of the organization. This does not mean all parties get what they personally want, but they will get a fair hearing.

There are a variety of decision-making methods all used at Toyota in different situations. These range from a manager or expert making a decision unilaterally and announcing it to group consensus with full authority to implement the decision they agree to.The preferred approach at Toyota is group consensus, but with management approval. But management reserves the right to seek group input and then make a decision and announce it. This is done only if the group is struggling to get consensus and management must step in or if there is an urgent need for a quick decision. The philosophy is to seek the maximum involvement appropriate for each situation.

One example of the nemawashi process is the way the broad circulation of ideas works in the early stages of product development. Before the styling of a vehicle is even determined, Toyota puts an enormous amount of effort into evaluating the early designs and thinking through all possible engineering and manufacturing issues. Each design is meticulously analyzed and countermeasures are developed through “study drawings.” These are sketches that include possible problems and alternative solutions. When the study-drawing phase is completed, the collective drawings across all engineering departments are put together into a binder called the K4 (shorthand for kozokeikaku—a Japanese word referring to a structure plan—the study drawings that collectively address the structure and integration of the vehicle). One day I met with Jim Griffith, who at the time was VP of Technical Administration. He looked frazzled. I asked him why and he said he just had gotten a K4 on a new vehicle to review. Griffith is not an engineer, so I asked why an administrator would get this document. He seemed surprised I would ask and said that Toyota is always looking for broad input and he, too, will have opinions about the vehicle.

He was frazzled because this was clearly a challenging task for a non-engineer and he felt obliged to take it seriously and come up with some useful input. As it was, there were well over one hundred signatures required on the K4. Jim was a vice president and very well established in a company with lifetime employment, so he could have just blown off the assignment. But he knew that if the chief engineer was asking for a non-engineering opinion and he had to sign off on the document, there was a reason. The process matters and every member must take the process seriously. Perhaps he might see things that others missed. In any event, he knew his opinions would count.

One way new engineers learn about nemawashi is through the freshman project. They are given a very challenging project, something they are unprepared for and could not possibly do on their own. For example, one American stamping engineer responsible for setting up the process of stamping body panels was given the assignment in his first year of designing what is called a “checking fixture.” This is a complex device that clamps a body panel (like the outer part of a door) down on specific points and checks that the measurements are accurate. Stamping engineers generally have to learn how to use these, but not design one. It requires understanding the design of the part, understanding the critical quality points, and designing something complex from scratch. The young American stamping engineer did not have a clue how to start. He was not given any rulebook. So he struggled and thought about it and finally started asking questions. In the process of asking questions, he had to talk to many engineers from different departments—body engineering, quality, vendors. In the process he learned a lot about quality and design and met people whom he would continue to draw on as resources throughout his career. The assignment forced him to learn nemawashi by doing it.