Toyota: Continuous Improvement and a Quality Culture are Fragile

In quality circles the word is that to produce an outstanding product there must be continuous improvement and there must be the proper environment - one that is not smug and confident but one that is humane, educated, and open.

Toyota was such a company for most of our lives. The recent troubles are a reminder that the best of organizations can become complacent and overconfident.

Time magazine presents: What Went Wrong at Toyota:

When weak signals started coming out in 2002, Toyota's top management wasn't listening. By then, the heroic stage of Japan Inc. was over; parts of its business culture had become sclerotic. Compared with the nimbleness seen in Silicon Valley, Japan's manufacturers and their systems began to be seen as inflexible, too removed from a changing global economy to adapt. Analysts describe a Toyota management team that had fallen in love with itself and become too insular to properly handle something like the current crisis. "The reaction to [the situation] is a very Japanese thing," says Kenneth Grossberg, a marketing professor at Waseda University's business school in Tokyo. Jeffrey Kingston, director of Asian studies at Temple University Japan, says Toyota's managers don't understand how sensitive the American public is to auto-safety issues. "Their focus on the customer has been nonexistent," he says. "Toyota is famous for having an arrogant culture. They're so used to dealing with successes that when they have a problem, they're not sure how to respond.

There are many in the automotive industry enjoying the problems at Toyota. Such smugness will not last long. First, most U.S. businesses and governmental agencies never reached the success of Toyota and secondly, and more importantly, odds are that Toyota will correct their management problems and be back as strong as ever. Maybe stronger.

Comments

[Soon to be ex-alderman Steve]

Rule number one in a continuous improvement regime is "eliminate the fear." Workers have to feel confident that they won't be fired for delivering bad news to management, and that management will act on the bad news.

Unfortunately, in far too many companies in the US the tendency is to kill the messenger, ignore long term problems, and focus exclusively on short term quarterly results.

A lot of what Toyota does is fairly simple (in principle) and no big secret. Think long term, not just quarter-by-quarter. Focus relentlessly on product quality and incremental improvement. Measure everything. Make everyone part of the the solution. Eliminate the fear. And keep doing it, day by day, month by month, year in and year out.

It really does work, but you've got to keep at it. Sadly, while a lot of companies start out trying to emulate Toyota in good times, they tend to abandon these principles when they become inconvenient in tough times.

[R.J.]

Toyota has white-washed problems like this for years. And, contrary to popular myth, scoff at our 'greatest legal system on Earth'.
People will always assume Toyota is the best. Much like Paul's compulsion for Chicago red hots, even if they were using squirrel meat.

[Patrick Fuchs]

While I agree that Culture hindered the ability of Toyota to fix the problem, I think the article accurately notes that the Structure of modern automotive manufacturing amplifies the severity of individual part defects. Multinational auto companies with several brands and dozens of production facilities now homogenize as many common parts as possible, creating a "system that all but guarantees that there are no small problems when a part goes bad, only big ones. In fact, global ones."

The massive size of Toyota's recall does not necessarily correspond with their level of overconfidence. Perhaps it better reflects Toyota's level of inter-company harmonization-- because of their common part production innovations, the stakes of perfection have never been higher. As a result, I am not convinced this was an especially arrogant company more so than an especially interconnected company. And I think that helps their prospects for recovery.

[Ty O'Mara]

I also think Toyota will come back from this, and its seems likely to me that their recent problems have been magnified by the U.S. media, so as, to promote U.S. auto-makers. Not to minimize the seriousness of the problems-they will come back strong.

They are gargantuan compared to our auto-makers, and rightfully so. Their products have been incredibly superior for decades. I would, also, love to see our auto companies make big advances and be competitive.

I hate to say it, but, I think a 2011 or 2012 Toyota should be a great purchase, and I'm sure a lot of people are thinking the same thing.

[R.J.]

Anyone who thinks this will help GM or Ford...think again. The Toyota die-hards will jump to Honda.