A long history of TOC at Hitachi #TOCICO18

The first official day of the TOCICO conference started with a keynote from Kaoru (John) Watanabe talking about the long history of TOC implementations at Hitachi, "Enterprise wide TOC Implementation at $83B Conglomerate." They've implemented TOC in a variety of ways from the standard operations (DBR) approaches to using TOC thinking to design solutions (in IT) and in continuous improvement. And while they've had many great successes over that 18 years, they have only touched about 5-10% of the Hitachi business, and primarily in Japan.  As one would imagine with this kind of presentation, Watanabe had a discussion of a lot of lessons learned.

In the first wave, he thinks they may have over-promoted the impact of TOC on the business. "Excessive presentation makes people skeptical." Now he talks about improvements coming from many efforts and that "TOC contributed to the success."  Another lesson he described in this first wave was the importance of understanding the real value behind the business. In this case it was the value that the product brought to their customers - giving their customers the ability to do things they could not do before.

In their second wave, when Watanabe become involved with the company, they developed a way of thinking about TOC within the company that they call their Experience Oriented approach to good system design - oriented around true business needs instead of "I just need a ..." features. They had many good results, along with a few failures. The interesting lesson that came from this conversation was that they became overly enamored with the tools they were using, and started applying them where they didn't necessarily make sense. When all you have is a hammer, everything looks like a nail. Significant success with a tool makes people "blind" to other options. This is a beautiful example of the 4th Pillar of TOC: Never Say, "I know."

In the 3rd wave, Watanabe described the familiar hesitation people have when they hear unbelievable results - I don't want to be fooled by grand promises. Their lesson here was that while the general TOC solutions work, they need to be tailored to the environment in which they are working.  (As opposed to trying to force-fit the solution into their environment.)

In their 4th wave of TOC implementations, they began using more and more of the TOC thinking processes to look for improvement opportunities: the Process of Ongoing Improvements (POOGI). I was shocked by the shear number of teams they setup (~200 teams) and workshops they ran (over 100/month) over the course of a couple years. I wonder if a good portion of these teams have had bottom-line results? Watanabe said he could spend a day or more presenting the results of these efforts. The lessons from this wave have been encoded as principles of operation for them:

1. Flow is key. Focus, Flow, and Harmony are key elements to good solutions.
2. The central team are not "TOC Teachers" they are supporters of the various teams' efforts to improve. The effort is lead by the team.
3. Understand the problem and situation before developing the solution. Ensure that the current reality is clear before bringing a solution - don't just fix the symptoms, fix the root.
4. Don't hesitate to use any tool in your arsenal - but select the right one for the situation.
5. People are not convinced by buzzwords or even "TOC" or "Goldratt". Use common sense instead.

What is next? Watanabe wants TOC to grow further and for it to become the standard way of thinking and operating. This, of course, was well-received at a conference of TOC practitioners.

One of the comments Watanabe made at the start is the pride people have in a company like Hitachi. It's both a good thing and a dangerous thing - "Pride wears a uniform" and can often say, "Not invented here" to block change.