Toyota Motor

WHILE MUCH HAS been written about Toyota Motor

Corp.’s production system, little has captured the way the company

manages people to achieve operational learning. At

Toyota, there exists a way to solve problems that generates

knowledge and helps people doing the work learn how to learn.

Company managers use a tool called the A3 (named after the

international paper size on which it fits) as a key tactic in sharing

a deeper method of thinking that lies at the heart of Toyota’s

sustained success.

A3s are deceptively simple. An A3 is composed of a sequence

of boxes (seven in the example) arrayed in a

template. Inside the boxes the A3’s “author” attempts,

in the following order, to: (1) establish

the business context and importance of a specific

problem or issue; (2) describe the current

conditions of the problem; (3) identify the desired

outcome; (4) analyze the situation to

establish causality; (5) propose countermeasures;

(6) prescribe an action plan for getting it

done; and (7) map out the follow-up process.

However, A3 reports — and more importantly

the underlying thinking — play more

than a purely practical role; they also embody

a more critical core strength of a lean company.

A3s serve as mechanisms for managers

to mentor others in root-cause analysis and

scientific thinking, while also aligning the interests

of individuals and departments

throughout the organization by encouraging

productive dialogue and helping people learn

from one another. A3 management is a system

based on building structured

opportunities for people to learn in the manner

that comes most naturally to them:

through experience, by learning from mistakes

and through plan-based trial and error.

The A3s reproduced in this article represent just some of the

stages in a typical development sequence — a process that may

involve numerous iterations of the A3 before it is final. To illustrate

how the A3 process works, we’ve imagined a young

manager — call him Porter — who’s trying to solve a problem.

The problem is that his Japan-based company is building a manufacturing

plant in the United States, requiring many technical

documents to be translated into English, and the translation

project has been going badly. Porter uses the A3 process to attack

the problem, which means that he gets coached through it by his

boss and mentor — call him Sanderson. The

A3s shown on these pages will give an idea of

how one learning cycle might go, as Porter

works on the problem under Sanderson’s tutelage.

Porter’s first attempt at the A3 reveals,

as early-stage A3s often do, his eagerness to

get to a solution as quickly as possible.

(Editor’s note: The example is drawn from

Managing to Learn, by John Shook, The Lean

Enterprise Institute, 2008.)

Seeing this first version, Sanderson uses

the A3 process as a mechanism to mentor

Porter in root-cause analysis and scientific

thinking. Through coaching Porter and others

in this manner, Sanderson seeks to embed

organizational habits and mind-sets that enable,

encourage and teach people to think

and take initiative.

The iterative process of producing progressive

A3s generates practical problem-solving

skills for the learner, while providing the manager

with a practical mechanism to mentor

others while achieving desired business results.

The last pages of this article show the final

A3 in this iterative sequence. Author Porter

uses the A3 process not only to figure out the

THE LEADING

QUESTION

Toyota has

designed a

two-page

mechanism

for attacking

problems.

What can we

learn from it?

FINDINGS

The A3’s constraints

(just 2

pages) and its

structure (specific

categories, ordered

in steps, adding up

to a “story”) are

the keys to the

A3’s power.

Though the A3

process can be

used effectively

both to solve

problems and to

plan initiatives, its

greatest payoff

may be how it

fosters learning.

It presents ideal

opportunities

for mentoring.

It becomes a basis

for collaboration.

SLOANREVIEW.MIT.EDU SUMMER 2009 MIT SLOAN MANAGEMENT REVIEW 31

The A3 Report

developing an organization of thinking problem-solvers. BY JOHN SHOOK

best solutions to his problem, but to manufacture the authority

he needs to proceed with his plan. Sanderson uses it to mentor

his protégé, while getting the required results for the company

(in this instance, the solution to a problem). Organizations use

A3s to get decisions made, distribute authority to the level

needed for good decisions, align people and teams on common

goals and learn for constant improvement. The ultimate goal of

A3s is not just to solve the problem at hand, but to make the

process of problem solving transparent and teachable in a manner

that creates an organization full of thinking, learning

problem solvers. In this way, the A3 management process powerfully

embodies the essence of operational learning.

John Shook is an industrial anthropologist and senior advisor

to the Lean Enterprise Institute, where he works with companies

and individuals to help them understand and implement lean

production. He is author of Managing to Learn: Using the A3

Management Process to Solve Problems, Gain Agreement, Mentor,

and Lead (Lean Enterprise Institute), and coauthor of

Learning to See (Lean Enterprise Institute). He worked with Toyota

for 10 years, helping it transfer its production, engineering

and management systems from Japan to its overseas affiliates

and suppliers. Comment on this article or contact the author at

smrfeedback@mit.edu.

Reprint 50408.

Copyright © Massachusetts Institute of Technology, 2009.

All rights reserved.

Like many A3 authors, Porter’s first effort reveals his need

to show he has an answer — the answer. He jumps to a

conclusion and develops a strong emotional attachment

to it without having traced a more rigorous analysis of the

situation through seeing and confirming the actual situation.

Sanderson used the A3 as a mechanism to prevent

his mentee from jumping ahead to a solution.

Porter discovers he can simply be an investigator

and let the needs and facts of the situation speak

for themselves. Rather than the answer, he must

simply state succinctly, “What is the problem?”

32 MIT SLOAN MANAGEMENT REVIEW SUMMER 2009 SLOANREVIEW.MIT.EDU

One way to describe the

A3 is as “standardized

storytelling,” which

refers to the ability of

A3s to communicate

both facts and meaning

in a commonly

understood format.

Like any narrative tale,

an A3 tells a complete

story, with a beginning,

a middle and an end,

which can be traced

from the upper left-hand

side to the lower right

side. Because readers

are familiar with the

format, they can focus

easily on the matter

contained. It becomes

the basis for reaching a

shared understanding.

Defining the

problem simply

and powerfully

represents the most

important part of

any A3. Effective A3s

persuade others by

capturing the right

story with facts (not

abstractions) and

communicating the

meaning effectively.

A3s employ visual

methods to share

information and

thinking. This helps

condense key facts

into meaningful

visual shorthand —

storytelling tools

that help pack a

great deal of data

into an elegant

presentation.

A problem is something that presents itself as a barrier to the organization

achieving its goal. Articulating this problem requires the author to identify the gap

between current state and the desired performance at any given time. The root

cause or reason the gap exists is identified through examining the way the work is

currently being performed and asking why the problem occurs. If the root cause is

clearly defined, effective countermeasures can more easily be developed.

Despite the specific

categories used in

this A3, there’s no

one fixed, absolute,

correct template.

Regardless of the

setting or use,

it’s always the

underlying thinking

that matters.

Every A3 is no

more than a visual

manifestation of

a problem-solving

thought process

involving continual

dialogue between

the owner of an

issue and others in

an organization.

D E S I G N T H I N K I N G : I N N OVATION

Current conditions

are always based on

facts derived from

the gemba — the

place where the

work takes place.

Real facts about

the real work are

derived from careful

investigation on the

part of the author.

SLOANREVIEW.MIT.EDU SUMMER 2009 MIT SLOAN MANAGEMENT REVIEW 33

The A3s process

explores a set

of potential

countermeasures

rather than just

one solution. By

examining a range

of potential choices,

individuals uncover

a broader and

more meaningful

basis for dialogue,

analysis and

agreement.

A3 proposals typically use the word “countermeasure” rather than

“solution.” Countermeasure refers to the way that proposed actions are

directly addressed to existing conditions. More importantly, the wording

recognizes that even apparent “solutions” inevitably create new problems.

Once a countermeasure is in place, it will create a new situation, with its

own set of problems that will require their own countermeasures.

Note that effective

countermeasures

can be produced

only by speaking

with everyone who

touches the work.

And so producing a

viable plan requires

meaningful input

from everyone.

Producing a realistic

plan through the A3

process shifts the basis

of decision making

from formal authority

to ownership of the

problem itself. By

developing a mastery

of the issue at hand

and involving the

players in the process,

the A3 author earns the

authority to propose

and move forward an

effective plan.

All A3s include the

initials or names

of the author and

manager. The value of

the A3 process to the

manager cannot be

overemphasized. The

manager now has a

tool to mentor and

establish alignment.

The individual now

has the means to

propose answers to

problems that he/

she owns, to create

authorization to act

and to manufacture

the authorization

needed to see the

proposal carried out.

Every action plan includes a schedule for hansei, or reflection,

to identify problems, develop new countermeasures and

communicate improvements to the rest of the organization.

A3s are part of a learning cycle of continuous improvement —

which is why a key Toyota saying is, “No problem is a problem.”

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