FEATURE – The real power of Lean lies not in efficiency tools, but in its ability to turn organizations into learning networks where interaction, engagement, and shared problem solving create lasting collective intelligence.

Words: Michael Ballé

Is the Toyota Management System the only way to profitability and sustainability? Of course not, every market ecosystem offers its own possibilities. The TMS is the most useful in a high competition/low margin market where the added cost of mistakes and blunders turns black ink into red.

When tech companies started to say management is unnecessary because we can find all the answers we need in data, about 20 years ago, people forgot what element of “Japanese” management was so interesting the 20 years before that: the power of collectively engaging in quality. The sudden appearance of Japanese industrial companies on the scene, and with them ideas of worker participation, team involvement, and systemic interaction to produce better quality, shorter lead-times and lower overall costs was a thrilling moment in business time.

But this has passed. With the exception of Toyota (so far), Japanese companies have reverted to American-style management (and faded away), and now we're back to individual productivity somehow connected through increasingly digital processes to deliver “something,” and then winner-takes-all economies of scale. A few commentators realize this leads to "enshittification" of both customer experience and work engagement and pleasure, but hey, who cares, right?

The deep system insight these Japanese companies had at the time, built on the hard work of many seminal thinkers—Deming, sure, but also Ishikawa, Juran and others—was that a system as a whole can learn. A business can be seen as the sum of its individual parts (just make each part more cost effective and the rest will follow) or as a value network, a network of connections that produce value when they come together.

To achieve collective intelligence, learning and innovation from a network, we understood that we have three key levers:

1. Interactions: Increase interactions and standardize interfaces for more frequent interaction, such as what you do with a train and frequent deliveries in a JIT system and make sure everyone talks to everyone, every part of your system interacts with every other part.
2. Engagement: Beyond interactions, we can seek engaging interaction, and this is where Toyota has been absolutely brilliant as it has normalized interactions around engaging in collaborative problem solving and kaizen: fix that quality issue together, reduce that lead-time by cooperation, find a different way to bring the cost down, and so on.
3. Learning: It means deliberately seeking better solutions to endemic problems, attacking new problems, and overall raising our knowledge and standards to better respond to situations, explore new ideas, and find innovative ways to solve both old and new problems, collectively so the entire network can level up.

Deliberately increasing interactions improves collective performance because people, teams, and processes become more connected and responsive to one another and information moves faster, so you learn the information you needed to move on. Coordination becomes easier as misunderstandings are reduced. Standardized interfaces and routines, like scheduled deliveries in a just-in-time system or clear communication channels between departments with A3s, rings, etc., help everyone stay aligned without wasting energy on transaction costs.

Engagement takes interactions a step further by making them meaningful and competence-based rather than purely transactional. A system performs better collectively when people are actively involved in solving problems together rather than simply passing information along because people are now deliberately trying to be helpful, which means better understanding what each person is trying to achieve. Toyota’s approach demonstrates this clearly through practices like kaizen and collaborative problem solving, where employees at every level participate in improving quality, reducing waste, lowering lead-times, and refining processes. As we know, engagement increases ownership, motivation, and creativity because people feel their ideas matter and their contributions directly affect outcomes.

We all hope learning just happens, accidentally, that at some point the light bulb goes on in a "aha!" moment and yes, certainly, it can happen. But in everyday work, learning is deliberate, and often a deliberate practice: one has to engage with the situation, with the problem, and be committed to learning as well, which means accepting there will be several cycles of repetition of not getting it right until finally things improve. Deliberate learning is handling the frustration of early failures and adversity until we finally get the hang of it. Individual learning means deepening one's understanding, while collective learning is all about adopting more adaptive norms that make the network work better overall, such as never passing forward defective or incomplete work, or a "sell one, make one" approach to programming jobs.

As you drive your network towards more interactions (which means investing in interaction time and arenas), format situations as clear problems so people can engage in them rather than oppose each other, and deliberately seek learning (okay, we used to do this, now what's the new way we should handle this situation), you will find that both the competence of the individual nodes in the network increases as well as the overall performance the network delivers. It's not magic; it's network mechanics.

Lean, which to me is the Toyota Management System adopted and adapted outside of Toyota, is endlessly fascinating because it is a blueprint of how to activate a value network and how to get sustainably more value for customers (and so increase your customer base), employees (higher engagement and work satisfaction), suppliers (lower transaction costs) and shareholders as this all delivers more profit over time, while being lighter on the planet. I'm sure there are other ways to do this, but Toyota has pioneered and documented (and taught to those who want to learn) one way that has so far proven to work every single time if one tries hard enough to understand how it works and what it does.

As a reflection, look at your activities as part of a network and ask yourself three basic questions:

1. How can I increase interactions in this network (and where are interactions simply not happening at all)?
2. How can I further engage people in these interactions on problem-solving and kaizen in order to look for deeper understanding and more innovative solutions to increase specific competence?
3. How can I make sure learning happens by capturing, standardizing, sharing, adapting innovative solutions coming out of problem solving in order to level up the working norms of the network and support collective intelligence and innovation?

Whatever the answers are, they will make you look at your situations in a different way, and make you think more deeply.

_THE AUTHOR