Four Valuable Lessons from GM’s Failed Experiment
This American Life uncovers what it takes to run an innovative company: equip and engage your front-line employees to make continuous improvements.
February 25, 2016
Everyone says that we should learn from our failures; but too often, those failures are kept behind-the-scenes in the one department where it happened, and swept under the rug.
Fortunately, we have This American Life (T.A.L.) to highlight an example to the contrary. T.A.L. 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 maintaining a bias towards action to improve how GM designed and produced autos. These priorities felt aligned with 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:
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. The partnership would benefit both parties; Toyota would learn how to navigate unions and American management styles, while 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!)
The Fremont workers traveled to Japan for a full immersion in Toyota’s Production System.
To the surprise of many, their production quality 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.
The primary lesson to take away from this story is Toyota’s deep empowerment of assembly line workers to identify problems, devise solutions, and get management to quickly make changes.
It’s a mindset you should adopt, even in your seemingly different workplace of 2015.
Here are four ways to equip and engage front-line employees to make continuous improvements:
“Everyone’s expected to be looking for ways to improve the production process all the time””
1. Do Not 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.
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?
“I can’t remember any time in my working life where somebody asked for my ideas to solve the problem.”
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!
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. 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.
“When a worker makes a suggestion that saves money, he gets a bonus of a few hundred dollars or so”
3. Recognize and reward creative thinking
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 would receive bonuses of a few hundred dollars when their suggestions were implemented.
Incentives don’t have to be monetary, however, meaningful recognition among peers and leadership is the key.
“[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, Toyota’s approach] is not something you can copy, and you can’t even take a photograph of it.”
4. Culture is a set of behaviors
To change a company’s culture, you start by getting people to work 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?”
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, and listen.
Then take one of those ideas and implement it. Let us know what happens!