I’ve been totally into podcasts recently. We did a lot of travel this summer, including three weeks in Europe, and we even nerded-out to the point of using Rick Steve’s podcasts as walking guides in the cities we visited. Before our long, late summer trip, we spent 12 hours in the car to drop our sweet pup off with my parents, and opted for some great episodes of This American Life for the journey. One episode from earlier this year on NUMMI, a joint venture car plant in California that was Toyota’s first on-the-ground project in the U.S., immediately appealed to my husband because of his Michigan and GM family roots.
I expected to be clued in/interested in the NUMMI episode, but I didn’t expect to take away such a major lesson on organizational change. I recommend you go listen, but here’s the jist. In the early 1980’s, Toyota was looking for a U.S. project that would allow them to take advantage of U.S. tax incentives and help them better understand American production and business. GM had a failing plant in Freemont, California, with a cranky, dysfunctional, union workforce, so they put the Freemont plant on the table for the Toyota deal. Since the Japanese were going to run this plant, and they had no desire to perpetuate the American union model, GM decided to fire all the union plant employees. Crazy thing is, for the partnership, they proceeded to hire back about 80% of the former plant team, and shipped them over to Japan to train on the Toyota production line alongside their Japanese peers.
The Toyota business model was so foreign to the American workers – for starters, the Toyota crew believes in 100% teamwork. That means your colleague cares just as much about completing a task or project as you do, regardless of their management level, and will stop their work to lend a hand and complete the goal. On the GM line, there’s one thing you never do: stop the production line. Union workers let imperfect cars go all the way through production on the GM line, never pulling the stop chord; but the Japanese let anyone stop the line if it meant finding a solution. Together, they’d find a solution and get the line back up and running. This was Toyota’s secret to high quality cars, something GM definitely wasn’t known for at the time.
The partnership was brilliant and Nummi was a huge success. The joint venture played out well for Toyota as they entered the U.S. market. Looking back, experts say GM couldn’t implement the lessons they learned from the joint venture company-wide, for a variety of reason. Toyota’s willingness to let them in on their production secrets and emphasis on teamwork was huge, but GM was missing a key ingredient of Toyota’s philosophy for success. Toyota strongly believes in the Japanese practice of kaizen, or continuous improvement. Any Toyota employee is encouraged to look for ways to improve their product and process, even if it means pointing out a flaw in the production line, recommending a solution that could save 10 seconds per car, or coming up with an idea for a new tool to fit those bolts just right…anything you could imagine. And Toyota would take those ideas for improvement, explore them with engineers or whomever needed to be involved, and implement them as soon as possible. Wahlah! Continuous improvement.
Anyway, you get it: GM went bankrupt, the top quality car makers in the world are now Japanese, and I don’t know about you, but I’ve yet to see an American company that practices kaizen at all levels of management.
Have you heard any great case studies on organizational change, good or bad, successful or not? Better yet, please tell me you have some podcasts to recommend!
– Ashley Respecki