Root Cause of Toyota's Failure: Employee Engagement
Posted: 03/30/2010 3:45:00 PM EDT | 15
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We have seen in recent weeks the joy with which the press seem to have jumped onto the back of Toyota when they recalled some of their vehicles due to unforeseen design faults.
Their joy seems little to do with the faults or their rectification but seems more of a celebration of the fact that the great Toyota has finally been found out.
For decades we have been assailed with tales of their profitability, their invincible progress and their second to none labor record, so it seems natural, in a schoolboy sort of way, to take the opportunity to lash out at them at the first sign of weakness.
What would be of greater value would be to discover the possible causes of this failure.
Much has been written about Toyota’s production system but very little has been written about the people who make that system work, the line workers and the supervisors.
Takishi Ohno, the man responsible for the creation and implementation of the Toyota way, wrote the definitive book about the system called simply “Toyota Production System.”
This book, which was written by the master, was used as the template when setting up European and North American production facilities.
It concentrates exclusively on the hard administration of a production system that produced vehicles to the customers order instead of the Western method of producing as many cars as possible as fast as possible, then trying to sell those cars to the customer.
The essential difference being that the Toyota we buy is the exact vehicle that we wanted while the equivalent western vehicle is what the car company thinks we want. The car is then discounted until it reaches a price where even though it is not exactly what we want, we will buy it because it is cheap.
The Toyota philosophy is so radical and requires such a change of management strategy that the change in the production process itself overshadows some even more fundamental differences between the drivers of performance in the Orient and in the West.
For this reason when Toyota went into production in the West the emphasis was on the detail of the process, not on the people who carried out that process.
Bob Nelson, the author of “Keeping Up In A Down Economy” tells us that “the average number of suggestions given by an American worker to improve the performance of his company is 1.1 per year. The same figure for a Japanese worker is 167 suggestions per year.”
This seems to indicate that there is a significant difference between the way that the Japanese worker feels about what he does and the way that the North American workers feel about what they do.
When the new Toyota plants in the West were built they slavishly tried to copy the detail of the Toyota production system without understanding the difference between the way that the workers in the East, compared to the West, felt about what they did.
Today that difference is called engagement.
Employers in the West are becoming aware of the huge value that is realised when a workforce is engaged but, other than running surveys to find out how engaged, or not, their workforce is, very few understand that it is possible to create engagement in an otherwise unengaged workforce, and fewer know how to do it.
The cars that Toyota recalled were all built in the West.
Is it possible that the faults that caused the recalls did not occur in vehicles produced in the East because they were spotted and rectified by an “engaged” workforce, while in the West the “disengaged” workforce knew of the problems but never reported them to Toyota because Western managers do not know how to engage their workforces.
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Contributor: Peter Hunter |
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Peter,
Good attempt in bringing out the need to constructively engage people at the workplace. But, I feel we need to go deeper to the root cause.
It was an American who taught the Japanese on Quality. One of Deming 14 points says, 95 of the causes of defects or failures (common) lies in the system, only 5% with the people. Anyone who understands the "systems" framework can appreciate the wisdom. Thats why the Japanese revolutionised the quality initiative by focussing on 'process" improvement. But, first, they had to lead their people in providing the tools and motivation. This is what we all mean by engagement. "Toyota is as much a state of mind as it is a car company" - USA Today. It relates to the adoption of a new paradigm - philosophy, culture and process thinking.
Vishnu,
It's easy to hide behind the excuse of execution faillure. But what's the root cause of that?. In the end, we can't run away from holding the leadership for it's accountability in rolling out an "unimplementable" plan. This is where "engagement" comes in, to prevent the failures before they happen. Most of all, it is intended to remove the ego and hubris of "what has worked before will work forever and feeling "the top management knows more than the guys right at the thick of the problem. |
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Not sure, if you got all the facts right! You don't even know the correct name of the person responsible for developing the TPS. Then, how can you write about Toyota? FYI, the name of the guy who developed TPS is Taiichi Ohno and NOT Takishi Ohno; like wise the employees of Toyota offer 10 suggestions per year on an average and not 167. From 10,000 employees world-wide Toyota were able to get a million ideas each year and implement 95% of them.
Though employee engagement could have been a contributing factor, it is not the root cause. The root cause in my opinion is the gap between strategy and execution, between driving sales to become no#1 and customer focus !
Vishnu Rayapeddi
www.solutions4productivity.com |
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good one . thank you |
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A nice article. but I feel we should not blame the " engaged work force" or the " designated work force". commiment from the management side was the root cuase. fame does not protect the quality. we should strive for it. |
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it should be more insightful with more facts and analysis. I have a sense that it's too early to conclude about engagement. |
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Interesting article, although I agree with paulo oliveira: more research would be beneficial. |
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Michael
The Bob Nelson quote came from his book "Keeping Up In A Down Economy" and refers only to a generic comparison between the American and the Japanese worker.
More specific comparative data has since been sent to me by an ex auto worker who relates that when he tried to make a suggestion while working for Ford UK discovered that halfway through the year his suggestion was numbered twelve in the suggestion book on a site employing 2,500 workers.,
This equates to one suggestion per year for every 200 employees.
In Masaaki Imai's book "Kaisen" you can find the statistic that Matsushita Electrical (National Panasonic) won the prize for maximum suggestions made by employees in a year - I believe that for around 200,000 employees they made 6.3 million suggestions, or 31 per employee per year.
If we equate the number of suggestions at the Ford (UK) site with National Panasonic in Japan then the ratio of ideas presented by employees to improve the operation of their organisation is over 6,000:1 in favour of the Japanese company.
Peter A Hunter
www.breakingthemoulsd.co.uk.
My apologies to Taiichi Ohno.
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Engagement is more than a single concept. To say that the Toyota´s problem was lack of engament of its workers is not enough. In fact, all management problems of any company is basically related to its workers wish to perform well, to stay with the company(presenteism) and have attitudes (behaviors) socially and ethically desirede. So, where is the problem? Which aspect of engagement are you talking about? I think that a bit more of research is required, in order to talk about this very complex problem faced by Toyota. |
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I have read that similar problems occurred in Japan (originally unreported). |
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Very good insight. I've read the Toyota Way and somewhat understand TPS but I think the NUMMI experiment gave indications of the difference in the engagement of employees in the East vs West. Thanks for writing it. |
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Well written ...
Few leaders understand the importance of a motivated workforce and the possible contribution of the latter. Fewer still, understand the importance of ethical leadership, although they are good at drafting and implementing codes of ethics for others to follow.
For free abridged versions of books on leadership, ethics, teamwork, women in the workforce, sexual harassment and bullying, trade unions, etc. send an e-mail request to crespin79@primus.ca.
Maxwell Pinto, Business Consultant and Author.
http://www.strategicbookpublishing.com/Management-TidbitsForTheNewMillenium.html
http://www.youtube.com/watch?v=p34hB50lv-8
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Using total country's workforce suggestion numbers to draw the conclusion that Toyota's American workers are disengaged makes for a controversial article but is an insult. What are the suggestions/worker in Toyota's Japanese plants versus it's American plants. Secondly all the recalled cars were not produced in the US. Lazy research. |
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Peter,
Thanks for sharing. Would you point me to Bob Nelson's article on Toyota so I can learn more for a book I'm writing.
Many thanks,
Michael |
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Good article. Exactly right that this was a Western mistake, started by profilt chasing instead of following a Lean process and the TPS. It hasn't been widely enough reported.
Takishi Ohno though?? |
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A very thought evoking article, thank you! |
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