What The Toyota Engagement Equation and 2 Second Lean Teach Us About Building High-Performance Companies
By Ted Bonel | Strategy & ExecutionAdvisors
Many business leaders believe that operational excellence starts with better systems, better technology, or better processes.
Toyota teaches us something very different.
The greatest competitive advantage isn’t found in your systems.
It’s found in your people.
In her excellent book The Toyota Engagement Equation, Tracey Richardson explores one of the most misunderstood aspects of the Toyota Production System (TPS):
Toyota’s success isn’t primarily about Lean tools. It’s about creating an environment where every person isengaged in solving problems and improving the business every day.
This idea aligns perfectly with Paul Akers’2 Second Lean philosophy.
Both approaches are built on a simple but powerful belief: “The people doing the work know the work best.”
And when leaders create a culture where people are encouraged to identify problems and improve them, extraordinary things happen.
The Mistake Most Companies Make
When performance stalls, many leaders respond by:
- Introducing new software
- Hiring consultants
- Restructuring departments
- Creating more reports
- Adding more meetings
Yet they often overlook the greatest source of improvement already inside the organisation.
The collective intelligence of their people.
Every day employees see:
- Waste
- Frustration
- Delays
- Rework
- Customer issues
- Safety concerns
- Process inefficiencies
But in many organisations nobody asks them what they think.
Or worse, employees have learned that speaking up changes nothing.
The result?
Ideas stay locked inside people’s heads.
The Toyota Engagement Equation
Tracey Richardson explains that engagement is not created through motivational speeches or employee surveys.
It is created when leaders consistently demonstrate three behaviours:
1. Respect for People
People are treated as contributors, not simply labour.
- Their observations matter.
- Their ideas matter.
- Their development matters.
2. Problem Solving
Employees are taught how to identify root causes rather than simply work around problems. Problems become opportunities to learn.
3. Continuous Improvement
Improvement becomes part of everyday work rather than an occasional project.
Small improvements accumulate into major competitive advantages. This creates what Toyota understands better than most organisations:
Engagement drives improvement and improvement drives engagement. The two reinforce each other.
Why 2 Second Lean Works So Well
Rather than waiting for large transformation projects, he encourages people to find and eliminate tiny amounts of waste every day.
- A few seconds here.
- A few steps there.
- A small frustration removed.
- A simple process improved
At first glance these changes seem insignificant.
But over time they become transformational.
More importantly, they create ownership.
People begin to see themselves not as workers but as problem solvers.
That shift changes culture.
Disengaged employees stop thinking.
The Hidden Cost of Disengagement
Gallup estimates that employee disengagement costs organisations billions annually through lost productivity, turnover, absenteeism, and poor customer experiences.
But the biggest cost may be invisible.
Disengaged employees stop thinking.
- They do what they are told.
- They stop suggesting improvements.
- They stop challenging waste.
- They stop caring about outcomes.
In contrast, engaged employees actively seek better ways to serve customers, improve quality, reduce costs, and strengthen the business.
Which workforce would you rather have?
Australian Example #1: Atlassian
One reason Australian software giant Atlassian has achieved global success is its commitment to empowering teams.
Rather than relying on command-and-control management, Atlassian encourages experimentation, learning, collaboration, and continuous improvement.
Its famous “ShipIt” innovation events allow employees to identify problems and develop solutions outside normal work routines.
The lesson? Innovation doesn’t come from a handful of executives. It comes from creating an environment where people feel safe to improve things.
Australian Example #2: Visy
Visy has long embraced Lean manufacturing principles throughout its operations.
One of the keys to its success has been engaging frontline employees in identifying waste, improving safety, reducing downtime, and increasing productivity.
The improvements often aren’t dramatic.
They are small, practical, and continuous.
Exactly the way Toyota intended.
And exactly the way 2 Second Lean advocates.
The Leadership Shift Required
The Toyota Engagement Equation requires leaders to rethink their role.
Many managers believe their job is to provide answers.
Toyota suggests a different approach.
A leader’s role is to:
See Problems
Develop the ability to identify waste and obstacles.
Develop People
Teach employees how to think critically and solve problems.
Ask Better Questions
Instead of giving answers, help employees discover solutions.
Create Psychological Safety
Make it safe to raise issues without blame.
Recognise Improvement
Celebrate progress, no matter how small.
This is leadership as coaching rather than command.
A Practical Challenge for Your Team
At your next team meeting ask:
“What is one thing that frustrated you this week?”
Then ask:
“How could we make it better?”
You may uncover dozens of improvement opportunities.
The key is acting on them.
Once employees see that their ideas matter, engagement begins to grow.
And once engagement grows, continuous improvement follows.
The Real Formula for Sustainable Growth
Many organisations pursue growth through:
- More customers
- More marketing
- More sales activity
Those things matter.
But sustainable growth requires something deeper.
It requires building an organisation that learns faster than its competitors.
That happens when every employee becomes an active contributor to improvement.
This is the true lesson from both The Toyota Engagement Equation and 2 Second Lean.
Great companies don’t have all the answers.
Great companies create environments where everyone helps find better answers.
Final Thought
Most organisations have far more improvement opportunities than they realise.
The challenge isn’t finding them.
The challenge is unlocking the people who already see them.
As Tracey Richardson and Paul Akers both demonstrate:
Continuous improvement is not a process issue. It’s an engagement issue.
When people are respected, involved, developed, and empowered to solve problems, performance improves naturally.
And when thousands of small improvements occur every year, remarkable business results follow.
Call to Action
If your leadership team wants to build a culture of accountability, engagement, and continuous improvement, Strategy & Execution Advisors helps organisations implement practical Lean, Scaling Up, and execution disciplines that turn employees into problem solvers and create lasting competitive advantage.
Because the companies that win aren’t the ones with the best processes. They’re the ones that continuously improve them.
TED BONEL, SCALING UP PRACTITIONER – STRATEGY & EXECUTION BUSINESS ADVISORS
Are you looking to scale your business and execute strategy with clarity and impact? I help CEOs and founders turn big ideas into real-world results, guiding small to mid-market companies through tailored strategic insights that drive growth.
My expertise lies in simplifying complexity – bridging high-level strategic frameworks with the practical realities of running a business. Unlike many consultants who focus solely on theory or execution, I specialise in both—translating strategy into actionable, transformative steps that deliver lasting results.
Contact me at tedb@strategyandexecution.com.au to schedule a free 30-minute discovery meeting.
ABOUT STRATEGY & EXECUTION
For over 20 years, Strategy & Execution has supported leaders and organisations in developing and executing winning strategies. We provide expert facilitation, executive education, and hands-on consulting to help businesses refine their strategic direction and implement it effectively.
Using proven methodologies like Scaling Up, E-Myth Mastery, Outthinker, and more, we challenge conventional thinking and equip organisations with the tools to accelerate growth. Our approach is dynamic—combining deep business experience with practical execution. We don’t just advise; we roll up our sleeves and work alongside you to make strategy happen.
If you’re preparing for a strategy development or execution challenge and are committed to creating real value, we’d love to hear from you. Learn more about our work or upcoming workshops
What The Toyota Engagement Equation and 2 Second Lean Teach Us About Building High-Performance Companies
By Ted Bonel | Strategy & ExecutionAdvisors
Many business leaders believe that operational excellence starts with better systems, better technology, or better processes.
Toyota teaches us something very different.
The greatest competitive advantage isn’t found in your systems.
It’s found in your people.
In her excellent book The Toyota Engagement Equation, Tracey Richardson explores one of the most misunderstood aspects of the Toyota Production System (TPS):
Toyota’s success isn’t primarily about Lean tools. It’s about creating an environment where every person isengaged in solving problems and improving the business every day.
This idea aligns perfectly with Paul Akers’2 Second Lean philosophy.
Both approaches are built on a simple but powerful belief: “The people doing the work know the work best.”
And when leaders create a culture where people are encouraged to identify problems and improve them, extraordinary things happen.
The Mistake Most Companies Make
When performance stalls, many leaders respond by:
- Introducing new software
- Hiring consultants
- Restructuring departments
- Creating more reports
- Adding more meetings
Yet they often overlook the greatest source of improvement already inside the organisation.
The collective intelligence of their people.
Every day employees see:
- Waste
- Frustration
- Delays
- Rework
- Customer issues
- Safety concerns
- Process inefficiencies
But in many organisations nobody asks them what they think.
Or worse, employees have learned that speaking up changes nothing.
The result?
Ideas stay locked inside people’s heads.
The Toyota Engagement Equation
Tracey Richardson explains that engagement is not created through motivational speeches or employee surveys.
It is created when leaders consistently demonstrate three behaviours:
1. Respect for People
People are treated as contributors, not simply labour.
- Their observations matter.
- Their ideas matter.
- Their development matters.
2. Problem Solving
Employees are taught how to identify root causes rather than simply work around problems. Problems become opportunities to learn.
3. Continuous Improvement
Improvement becomes part of everyday work rather than an occasional project.
Small improvements accumulate into major competitive advantages. This creates what Toyota understands better than most organisations:
Engagement drives improvement and improvement drives engagement. The two reinforce each other.
Why 2 Second Lean Works So Well
Rather than waiting for large transformation projects, he encourages people to find and eliminate tiny amounts of waste every day.
- A few seconds here.
- A few steps there.
- A small frustration removed.
- A simple process improved
At first glance these changes seem insignificant.
But over time they become transformational.
More importantly, they create ownership.
People begin to see themselves not as workers but as problem solvers.
That shift changes culture.
Disengaged employees stop thinking.
The Hidden Cost of Disengagement
Gallup estimates that employee disengagement costs organisations billions annually through lost productivity, turnover, absenteeism, and poor customer experiences.
But the biggest cost may be invisible.
Disengaged employees stop thinking.
- They do what they are told.
- They stop suggesting improvements.
- They stop challenging waste.
- They stop caring about outcomes.
In contrast, engaged employees actively seek better ways to serve customers, improve quality, reduce costs, and strengthen the business.
Which workforce would you rather have?
Australian Example #1: Atlassian
One reason Australian software giant Atlassian has achieved global success is its commitment to empowering teams.
Rather than relying on command-and-control management, Atlassian encourages experimentation, learning, collaboration, and continuous improvement.
Its famous “ShipIt” innovation events allow employees to identify problems and develop solutions outside normal work routines.
The lesson? Innovation doesn’t come from a handful of executives. It comes from creating an environment where people feel safe to improve things.
Australian Example #2: Visy
Visy has long embraced Lean manufacturing principles throughout its operations.
One of the keys to its success has been engaging frontline employees in identifying waste, improving safety, reducing downtime, and increasing productivity.
The improvements often aren’t dramatic.
They are small, practical, and continuous.
Exactly the way Toyota intended.
And exactly the way 2 Second Lean advocates.
The Leadership Shift Required
The Toyota Engagement Equation requires leaders to rethink their role.
Many managers believe their job is to provide answers.
Toyota suggests a different approach.
A leader’s role is to:
See Problems
Develop the ability to identify waste and obstacles.
Develop People
Teach employees how to think critically and solve problems.
Ask Better Questions
Instead of giving answers, help employees discover solutions.
Create Psychological Safety
Make it safe to raise issues without blame.
Recognise Improvement
Celebrate progress, no matter how small.
This is leadership as coaching rather than command.
A Practical Challenge for Your Team
At your next team meeting ask:
“What is one thing that frustrated you this week?”
Then ask:
“How could we make it better?”
You may uncover dozens of improvement opportunities.
The key is acting on them.
Once employees see that their ideas matter, engagement begins to grow.
And once engagement grows, continuous improvement follows.
The Real Formula for Sustainable Growth
Many organisations pursue growth through:
- More customers
- More marketing
- More sales activity
Those things matter.
But sustainable growth requires something deeper.
It requires building an organisation that learns faster than its competitors.
That happens when every employee becomes an active contributor to improvement.
This is the true lesson from both The Toyota Engagement Equation and 2 Second Lean.
Great companies don’t have all the answers.
Great companies create environments where everyone helps find better answers.
Final Thought
Most organisations have far more improvement opportunities than they realise.
The challenge isn’t finding them.
The challenge is unlocking the people who already see them.
As Tracey Richardson and Paul Akers both demonstrate:
Continuous improvement is not a process issue. It’s an engagement issue.
When people are respected, involved, developed, and empowered to solve problems, performance improves naturally.
And when thousands of small improvements occur every year, remarkable business results follow.
Call to Action
If your leadership team wants to build a culture of accountability, engagement, and continuous improvement, Strategy & Execution Advisors helps organisations implement practical Lean, Scaling Up, and execution disciplines that turn employees into problem solvers and create lasting competitive advantage.
Because the companies that win aren’t the ones with the best processes. They’re the ones that continuously improve them.
TED BONEL, SCALING UP PRACTITIONER – STRATEGY & EXECUTION BUSINESS ADVISORS
Are you looking to scale your business and execute strategy with clarity and impact? I help CEOs and founders turn big ideas into real-world results, guiding small to mid-market companies through tailored strategic insights that drive growth.
My expertise lies in simplifying complexity – bridging high-level strategic frameworks with the practical realities of running a business. Unlike many consultants who focus solely on theory or execution, I specialise in both—translating strategy into actionable, transformative steps that deliver lasting results.
Contact me at tedb@strategyandexecution.com.au to schedule a free 30-minute discovery meeting.
ABOUT STRATEGY & EXECUTION
For over 20 years, Strategy & Execution has supported leaders and organisations in developing and executing winning strategies. We provide expert facilitation, executive education, and hands-on consulting to help businesses refine their strategic direction and implement it effectively.
Using proven methodologies like Scaling Up, E-Myth Mastery, Outthinker, and more, we challenge conventional thinking and equip organisations with the tools to accelerate growth. Our approach is dynamic—combining deep business experience with practical execution. We don’t just advise; we roll up our sleeves and work alongside you to make strategy happen.
If you’re preparing for a strategy development or execution challenge and are committed to creating real value, we’d love to hear from you. Learn more about our work or upcoming workshops
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