Four Lessons for Working Differently from NUMMI, GM’s Failed Experiment with Toyota

By: Nadeem Haidary, Designer at gravitytank

You should learn from your failures, right? Too often, those failures are kept behind-the-scenes, in the one department where it happened, and swept under the rug. Luckily, we have This American Life to show evidence of the contrary. TAL recently updated their 2010 story on NUMMI, the joint venture between Toyota and General Motors to manufacture cars in Fremont, CA.

Listening to it again, I wAS struck by the importance NUMMI placed on behavioral change and bias towards action in order to improve how GM designed and produced autos. If you’re familiar with our work at gravitytank, you’ll recognize the parallels to our Six Principles to Work Differently.

If you don’t have an hour to spend on the T.A.L. podcast (though you really should!), here’s a 1-minute synopsis:

A Missed Opportunity

In the early 1980’s, Toyota wanted to start producing cars in the United States. To do so, they joined forces with their competitor GM. It was a learning deal. Toyota would learn how to navigate unions and American management styles, and GM would learn Toyota’s secrets to building high quality cars at low prices.

They selected GM’s Fremont plant for NUMMI’s location, which was also considered to have “the worst workforce in the automobile industry” by United Auto Workers. Sex, drugs, alcohol and gambling were all rampant on the job. (Yikes!)

Those workers went to Japan for a full immersion in Toyota’s Production System. Quite remarkably, their quality of production improved rapidly. GM’s rough-around-the-edges crew had adapted well to Toyota’s ways.

NUMMI could have been the start of a resurgence of the American automotive industry, but GM never fully realized its potential. They struggled to implement the same system across their factories. In 2010, Tesla purchased the Fremont plant.

Learning From GM’s Mistakes

There are many lessons to take away from this story, but what really struck a chord was Toyota’s deep empowerment of assembly line workers to identify problems, devise solutions and get management to quickly make changes.

It’s also one that you should consider, even in your seemingly different workplace of 2015. Here are four ways that you can think about empowering and engaging front-line employees to make continuous improvements. Improvements that will add up to leadership in your industry.

1. Never Treat Quality as an End-State

The Toyota system is based on the Japanese concept of Kaizen, or continual improvement. No process can ever be perfect. There’s always room for refinement. It is the job of everyone in the organization to spot ways to make things better.

“Everyone’s expected to be looking for ways to improve the production process all the time” -Frank Langfitt, NPR

Once spotted, Toyota built new tools and changed parts within hours or days. How’s that for action? Can you empower frontline employees to make suggestions in a meaningful, not superficial way? Next, will you allow small operational teams to quickly test and implement the necessary changes?

Imagine an initiative at hospitals or hotels, where confusing signage could be changed within hours of an on-the-floor employee noticing a pattern of confused guests. Or will that be a six month project run by corporate?

2. Expect innovation to happen at every level

Do you think that the people who work in the office are the planners and innovators, and the people on the front-line are simply executors? If so, welcome back to the 80’s!

“I can’t remember any time in my working life where somebody asked for my ideas to solve the problem.” -Jeffrey Liker, on GM’s Fremont plant before Toyota

GM believed that designers, marketers and engineers create the car and the assembly line workers follow the instructions to build it. It’s an artificial construct — design and innovation must continue on the floor. “On the floor,” manufacturing staff have more expertise than designers when it comes to actually creating the end product.

Critical thinking — analyzing, evaluating and creating — must be encouraged at every level in an organization before significant change can occur.

3. Recognize and reward creative thinking

“When a worker makes a suggestion that saves money, he gets a bonus of a few hundred dollars or so” — Frank Langfitt

Fremont workers saw management as the enemy before the Toyota partnership and training. They would intentionally sabotage cars by leaving Coke bottles in the door frames, or by not tightening important bolts on the car’s frame. The Toyota system equalized things.

At NUMMI, workers whose suggestions were implemented would receive bonuses of a few hundred dollars. Incentives don’t have to be monetary, however. Meaningful recognition among peers and leadership is the key.

4. Culture is a set of behaviors

“[A GM VP] said to an employee, ‘I want you to go there with cameras and take a picture of every square inch. And whatever you take a picture of, I want it to look like that in our plant.’ [Of course, this approach] is not something you can copy, and you can’t even take a photograph of it.” — Jeffrey Liker, author of The Toyota Way.

To change a company’s culture, you start by getting people to act differently. Toyota’s principal concept of teamwork and collaboration sounds clichéd, but it is based on specific behaviors, skills and structures.

Groups of 4–5 workers rotate positions regularly, with each team-member needing to know every related job. Toyota eliminated hierarchy in the parking lot too — managers and manufacturing staff parked in the same lot.

Toyota successfully recreated it’s culture at NUMMI through immersion. NUMMI staff worked side-by-side with their counterparts in Japan for two weeks. The trip ended in a way nobody expected — with these hardened union workers enjoying a sushi party, wearing Kimonos, and crying and hugging their new Japanese friends.

Other GM plants only emulated Toyota’s culture on the surface. There was no immersion, and no relationship-building. They all failed to increase quality.

“What could we be doing better around here?”

In the next day or two, walk around your office and “on-the-floor” where front line staff are doing their job. Are they encouraged and recognized for making suggestions? Maybe even take a chance and ask them: “What have you noticed around here that we could be doing better?” After their shock or amusement subsides, wait through the awkward pause. Listen.

Then take one of those ideas and implement it. Let us know what happens!

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Originally posted on gravitytank.com

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