S U M M E R 2 0 0 9 V O L . 5 0 N O. 4
R E P R I N T N U M B E R 5 0 4 0 8
John Shook
Toyota’s Secret:
The A3 Report
30 MIT SLOAN MANAGEMENT REVIEW SUMMER 2009 SLOANREVIEW.MIT.EDU
D E S I G N T H I N K I N G : I N N O VAT I O N
Toyota’s Secret:
How Toyota solves problems, creates plans, and gets new things done while
WHILE MUCH HAS been written about Toyota Motor
Corp.’s production system, little has captured the way the com-
pany 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 shar-
ing 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” at-
tempts, in the following order, to: (1) establish
the business context and importance of a spe-
cific problem or issue; (2) describe the current
conditions of the problem; (3) identify the de-
sired outcome; (4) analyze the situation to
establish causality; (5) propose countermea-
sures; (6) prescribe an action plan for getting it
done; and (7) map out the follow-up process.
However, A3 reports — and more impor-
tantly the underlying thinking — play more
than a purely practical role; they also embody
a more critical core strength of a lean com-
pany. A3s serve as mechanisms for managers
to mentor others in root-cause analysis and
scientific thinking, while also aligning the in-
terests of individuals and departments
throughout the organization by encouraging
productive dialogue and helping people learn
from one another. A3 management is a sys-
te m b a s e d o n b u i l d i n g s t r u c t u re d
opportunities for people to learn in the man-
ner that comes most naturally to them:
through experience, by learning from mis-
takes 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 illus-
trate 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 man-
ufacturing 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 tu-
telage. 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 oth-
ers in this manner, Sanderson seeks to embed
organizational habits and mind-sets that en-
able, encourage and teach people to think
and take initiative.
The iterative process of producing progres-
sive A3s generates practical problem-solving
skills for the learner, while providing the man-
ager 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 con-
straints (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 man-
ner that creates an organization full of thinking, learning
problem solvers. In this way, the A3 management process pow-
erfully 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, Men-
tor, and Lead (Lean Enterprise Institute), and coauthor of
Learning to See (Lean Enterprise Institute). He worked with Toy-
ota 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 O VAT I O N
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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