Question from a colleague:”If thermodynamics is the science of getting useful work out of engines, then surely organodynamics is the science of getting useful work out of organisations. Thermodynamics is based on three laws (or according to some purists, four): what three (or four!) laws of organodynamics would you
suggest?”
Answer: The objective function in managing any system must be solving problems and learning. There are four principles of a ‘basic science’ of system design, operation, and management, which if followed, generate, sustain, and accelerate high velocity learning, improvement, and innovation. If they are not followed, learning, improvement, and innovation are compromised.
(This basic science has a sound theoretical underpinning as it is rooted in the science of closed loop control and experiential and experimental learning.)
Learning, improvement, and innovation are core objective functions because the complexity of the ’socio-technical’ systems (e.g., groups of people, doing interdependent work, to create value for others) upon which we depend for delivering value to customers.
The complexity resides in the product itself (e.g., cars with multiple materials depending on well integrated mechanics and electronics), in the service (e.g., cancer treatment requiring the customization and integration of multiple diagnostics, pharmacology, oncology radiation, and surgery), or in the production methods.
The problem with complex systems, those with many parts connected and interacting in non linear ways, is that their structure and dynamics are difficult/impossible to model and predict accurately. Therefore, no few people can design them perfectly in isolation. Large numbers of people must pursue perfection by iterative discovery.
There are four basic principles for achieving high speed iteration, in tightly compressed cycles.
1: Seeing problems: Systems must be designed:
— with a high degree of specificity in terms of output, pathway
(e.g., flow, architecture), connections (e.g., interfaces), and component-activity
methods to capture best known approaches and
— with tests built in to show problems (e.g., that the best known approach has failed).
2: Solving problems: When problems are seen, they must be:
— contained to prevent their spread
— investigated and solved quickly and rigorously (e.g., scientific method) to convert
the ignorance that was the core source of their occurrence into useful knowledge.
3: Sharing learnings: When problems are solved, new knowledge must be:
— incorporated into new approaches for doing work and
— applied systemically so the impact of the new knowledge is multiplied
4: Leadership: For learning, improvement, and innovation to occur relentlessly, leaders must:
— actively see, solve, and share for system problems
for which they alone have span of perspective, and
— relentlessly cultivate skills 1 - 3 in those whom they support.
Teach, learn, practice, and apply these four and high performance can be achieved. Don’t and it won’t.
Steve Spear
http://ChasingTheRabbitBook.Com
Over the several weeks that stories about Toyota have unfolded, we’ve reflected that if Toyota, the most aggressive learner and the technological leader in the auto industry, was struggling with the complexity of its products, then who else with what else?
Two articles in the Wall Street Journal suggest this may go from a Toyota issue to an industry issue.
1: Calls for brake overrides on all cars.
http://online.wsj.com/article/SB10001424052748703807904575097390996752212.html?mod=djemTEW_t
2: A recall on steering by GM.
http://online.wsj.com/article/SB10001424052748703807904575097134094293008.html?mod=djemTEW_t
Through this series of recalls and production and sales suspensions, my main thoughts are:
- Toyota has succeeded in converting itself from a crummy auto maker in the 1950s to the world leader on quality, productivity, and technology on the basis of its capacity for improvement and innovation.
- This capacity depends on a long standing, historical commitment to developing people to be exceptional problem solvers, improvers, and innovators.
- This capacity might have been stressed with expansion in volume (new models, brands, plants, suppliers, and regions) and expansion in leadership in complex technology (e.g., power train generally, hybrid drive specifically).
- Toyota saw the stress and tried to remediate proactively its approach to developing people–e.g., Toyota Supplier Production Support Center, Global Production Center and North American Production Support Center, etc. (See Chapter 8 of Chasing the Rabbit.)
- Lastly, if the stress comes from volume and complexity with Toyota showing strain as a result, imagine what field problems exist at other companies which were never as good at developing great innovators. Today’s announcement that Honda is recalling on airbags (”Honda Expands Air Bag Recall to 378,000 More Cars,” NYTimes one line Feb 9) is an inkling of support to that last point.
For decades, Toyota has been viewed as a paragon of corporate improvement, innovation and effectiveness, qualities that helped it become the world’s largest automaker. But the firm’s reputation has been sorely tested in recent weeks amid a string of well-publicized recalls involving millions of Toyota vehicles due to problems involving sticking accelerator pedals and brake systems. In the words of Toyota’s president, Akio Toyoda, the firm is “in a crisis.”
Steven Spear, a senior lecturer in MIT’s Engineering Systems Division, is one of the leading experts on Toyota’s management system. He wrote about the topic extensively in his book, Chasing the Rabbit: How Market Leaders Outdistance the Competition (McGraw-Hill, 2008), and in a 1999 Harvard Business Review article, “Decoding the DNA of the Toyota Production System.” With Toyota in unprecedented turmoil, MIT News talked to Spear about the Japanese automaker’s problems — and potential solutions.
Long the quality and efficiency standard-setter, Toyota now has an ostrich-sized egg on its face — a problem with sticking accelerator pedals that led to global product recalls and a suspension of production and sales.
There are important lessons to be learned from Toyota’s stumble:
Competitive success is fluid. It depends on continuously discovering better ways to do work. The capabilities to do this are powerful but fragile and need constant reinforcement. Relentless attention to their development can lead to great success; conversely, a loss in attention can have grave consequences.
Please see the rest of the piece, “Learning from Toyota’s Stumble,” at blogs.hbr.org.