Chasing the Rabbit: Official Blog by Author Steven Spear

Here is one link to my interview last night following Akio Toyoda’s Congressional testimony.

Steve

MIT’s Spear Discusses Toyota’s Corporate Culture: Bloomberg TV Wednesday, February 24, 2010

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.

In a recent e-mail, Jim Womack urges the lean manufacturing community to get beyond Toyota, implying that what can be learned from Toyota has been, in particular tools of shop floor production control.

That is the wrong challenge, in my view.  The real challenge is to expand beyond understanding lean as a set of tools, and more aggressively pursuing an understanding of the comprehensive approach to managing organizations so they are capable of self-diagnosis, learning, and relentless internally generated improvement and innovation.

After all, Toyota didn’t displace GM, Ford, and the rest because it out value streamed them. It displaced its rivals because it out discovered them.

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