Toyota Taking the Lead

For a decade or so I have been saying terrible things about our automobile companies, and for a couple of years I have been saying them here. (Bullshitting in the Economist is a suitably provocative example. You can search the blog for automobile, Toyota, or Detroit and you’ll get a bunch more.)

Now Toyota is about to pass GM as the #1 auto company in the world. GM, Ford, and Chrysler are not catching up. They are headed in the other direction. Yes, I know the same old excuses are still on the table, to which now we see added “this unexpected economic turnaround.” “Who could possibly have predicted….?” Anyone who was paying attention. Many are culpable. The auto executives, who stopped thinking and learning a long time ago. The media, who have been buying the excuses. The rest of us, who have not spoken out early enough or strongly enough. Our American style of bravado, in which, Rocky style, we praise what is “ours” no matter how obviously troubled it may be.

Business Week, in a December article about the world’s most influential companies, doesn’t spend much space on their automobiles. They tout the way that the quality of thinking in the company is being applied to other fields. Healthcare in this case. (Anne Miller gave me the article.)

Toyota deserves the praise it is getting. What a pity that with 50 years to listen to them – and they have been talking to us for that long, and they have not been hiding their secrets under baskets – we still don’t know how to listen to them.

Argh.

Preparing the Way for Wisdom in Organizations – Part 5

Continuing the set of six tiny essays inviting reflection about the construction of the conditions and situations in which wisdom can be cultivated and exercised in organizational settings.

“Inventing” Waste

Historic inventions are often built from historic difficulties, and they always involve the invention of new distinctions. We have posted about the “Five Great Wastes” before, here.

Let us give two examples in which critical new distinctions of historic inventions have to do with what people at the time thought of as “wastes.”

Henry Ford, Mass Production, and the Model T

At the turn of the 20th century automobiles were expensive toys available only to the very rich. Henry Ford invented practices that we summarize as “mass production” and the “Model T.” He succeeded thereby in making automobiles less expensive and more accessible to the average American worker. At the same time, he produced a way of doubling the income of American Workers, thereby giving them the income to purchase the Model T. Ford’s new system produced cars quickly and so efficiently that it considerably lowered the cost of assembling the cars. He decided to pass this savings along to his customers, and in 1915 dropped the price of the Model T from $850 to $290. That year, he sold 1 million cars. (Parts of the story from http://www.ideafinder.com/history/inventors/ford.htm.)

Taiichi Ohno and the Toyota Production System

At the end of the Second World War, the people of Japan were in terrible trouble, their morale, productive capacity, and international relations demolished. An engineer named Taiichi Ohno, in the enterprise today known as Toyota, began the task of building a new capacity for Japanese production on top of Henry Ford’s designs, with some important additions. For example, Ford incorporated everything into one plant; Ohno designed for operation in a network. The operational heart of Ford’s designs was the way the engineers designed the coordination of the work on the assembly line (the employees found the repetition boring and only stayed because of what Ford called the ‘wage motive.’) Ohno centered his design in processes that built the capacity of each person on the production floor to take responsibility for the quality and coordination of their work. His invention became the foundation of the quality movement that swept the world starting in the 1970s and 80s.

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Bullshitting in The Economist: Homage to Fernando Flores and Harry Frankfurt

In the November 8, 2007 Economist we find a “Briefing” entitled “Toyota: A wobble on the road to the top.” It is a well-crafted article for someone who is not thinking. However, Greg and I were surprised to see an article like this, without attribution, in The Economist. Who is hiding what? Who takes responsibility for authoring this article? The editors of the Economist? If that is the case, this article invites me to make a major shift in my interpretation about the integrity of this journal, because it looks too much a “planted” article.

The article puts me in a mood of irony and frustration at the opportunities that the West is wasting by attempting to understand Toyota within the framework in which we have been so busy killing our own automobile industries for so long. Greg and my mother call what this article is doing, “Cutting off your nose to spite your face.”
What do I mean?

1. “… not all is running smoothly at Toyota” is exactly the same condition that the company has been in every day for the last 50 years. They don’t expect it to run smoothly, and it has not run smoothly. The difference between Toyota and its competitors is that Toyota organizes itself to deal with a world in which things don’t run smoothly, and to take massive advantage of every breakdown.

2. Where GM (for example) pats itself on the back for making 20,000 changes in its operations a year, Toyota makes a million changes. Literally. They do that as part of paying close attention to the evolving space in which they interact in the world, and adjusting continuously. The article implies that the company is experiencing momentous, techtonic shifts that they are not in condition to deal with. There is no evidence for such a claim that I have seen. The evidence cited in the article is no more than the kinds of events that are happening every day in every company.

3. The website to which the article points us to show that “nine of America’s leading scientific and environmental organisations took out advertisements in newspapers and started up a website” is a political hit site without, as I can tell, any substance.

4. If someone wanted to do the research (I don’t have the time) I’d bet a good sum of money that this is a planted article originally constructed (or shaped less directly) by someone attempting to defend the American automobile establishment. “Toyota could be leapfrogged ….” In whose dreams? The time and money spent here, attempting to pretend a “balanced” report on the state of the Toyota enterprise, would be far better spent trying to figure out why for 50 years the Western auto companies have not been able to understand or build their own version of what Toyota has built.

5. The author, whoever he or she is, could not make sense of what Toyota’s president was doing in a “personal mobility concept,” and goes on to ridicule the man and the company, calling it a “silly stunt.” This reminds me of the report that my friend George Kuper gave me on returning from one of the earliest visits of US auto executives to Japan to tour Toyota plants that were beginning to use the Toyota Production System. The American executives had been invited by the Japanese to see what they were doing, as a gesture of goodwill originally born out of Taichi Ohno’s admiration and gratitude to Henry Ford for his inventions. At the end of the day, George told me, the American executives caucused in private to discuss what they had seen. One consensus: they could not figure out why the Japanese were so committed to try to convince them that they were running their plants without inventories and parts warehouses. They ridiculed the Japanese for their “silly show.” Everyone knows, the American executives agreed, that it is not possible to run a plant without inventories, and they could not grasp what kind of devious intention was hiding behind their hosts’ insistence that they were operating without these essential components of a good facility.

It only took 30 or so years for some of the people in the US auto industry to discover what was behind the “devious intention.” Perhaps 30 years from now someone from the Economist might want to investigate whether what the president of Toyota was doing with his “personal mobility concept” was really only attempting “to polish Toyota’s image as a car company with a highly developed sense of social responsibility rather than one chasing growth at all costs.” I know what I bet we’ll find….

About the title: My friend Fernando Flores has been talking about bullshit as a formal distinction for understanding deceptive misrepresentations for more than 20 years. I wrote about it here. Harry Frankfurt, in his marvelous little book “On Bullshit,” speaks of bullshitting and bullshitters: “… carefully wrought bullshit involves, then, a certain inner strain. Thoughtful attention to detail requires discipline and objectivity. In entails accepting standards and limitations that forbid the indulgence of impulse or whim. It is this [apparent] selflessness that, in connection with bullshit, strikes us as inapposite. But in fact it is not out of the question at all. The realms of advertising and of public relations, and the nowadays closely related realm of politics, are relplete with instances of bullshit so unmitigated that they can serve among the most indisputable and classic paradigms of the concept. And in these realms there are exquisitely sophisticated craftsmen who–with the help of advancend and demanding techniques of market research, of public opinion polling, of psychological testing, and so forth–dedicate themselves tirelessly to getting every word and image they produce exactly right. Yet there is something more to be said about this. However studiously and conscienntiously the bullshitter proceeds, it remains true that he is also trying to get away with something. …” (p23)

Five Great Wastes

Following a conversation with my friend Jim Selman, I decided to dust off my story about the kinds of things that I think are going to be the most important “wastes” of the time that is coming. Taiichi Ohno of Toyota fame was my original inspiration for this line of thinking.

Historic inventions are often built from historic difficulties, and they are always accompanied by new distinctions. At the end of the Second World War, the people of Japan were in terrible trouble, their morale, productive capacity, and international relations demolished. An engineer named Taiichi Ohno, in the enterprise today known as Toyota, began the task of building a new capacity for Japanese production, on top of Henry Ford’s designs, with some important additions. Ford incorporated everything into one plant; Ohno designed for operation in a network. Ford went all out for volume, and minimized variety, in the interpretation that this was the most efficient way to support the US market, and make the money that he needed to support enormous investments and pay his workers enough to buy his cars (roughly doubling the historic pay for that kind of employment). Ohno built a production system that would optimize scarce capital and raw materials, allowing efficient operation with small production runs. The operational heart of Ford’s designs were the way the engineers designed the coordination of the work; Ohno’s design was centered in processes that built the capacity of each person on the production floor to take responsibility for the quality and coordination of their work. Ohno’s inventions became the foundation of the quality movement that swept the world starting in the 1970s and 80s. Continue reading