Akio Toyoda is on the hot seat. Reportedly, he is a forward-thinking guy who is intent on bringing the legacy of the family to the design of the future of the company. Unfortunately, CEO Toyoda is being tested beyond that of any of his recent predessors. Toyota is in trouble…in the market for cars…in the financial markets…and as as model for managing companies.
Last week I was speaking with Norman Bodek, Godfather of Lean, about Taiichi Ohno and Shigeo Shingo for my up-coming book. Norman knew both of them. He was their English-language publisher and he introduced 100s of people to them on his more than 75 study missions to Japan. I had just finished my weekly staff video conference where our consultants lamented that Toyota must have lost their way. I asked Norman what he thought.
Confront this reality: Electronic hardware and software is not bug free.The conventional wisdom about Toyota's quality issues is that they got distracted while pursuing a goal to be the world's largest car company. Norman didn't think they were ever pursuing that as a goal. At one time Toyota's CEO Watanabe predicted that it would happen, but it was never the goal. Yet, we can't ignore their rapid expansion into many new markets across the world. Norman speculated that too many of Toyota's managers of today weren't influenced by Engineer Ohno and Dr. Shingo.
Another contributing factor is the complication in today's vehicles. I read an article in the last week that said there are upwards of 100 computer chips controlling everything from emissions and speed to real-time fuel economy and handsfree cellphone capability. All that hardware requires software. Programmers will tell you that no software is bug free. Ever see the Windows blue screen of death?
One of my good friends wrote a short note to me this morning asking,
"WTF is up with Toyota? How did this happen? I thought they set the standard for quality control?"
Great questions. My answer:
"It's not as bad as Secretary Ray Lahood and the media have made it.
"It's worse than anything that has happened before at Toyota.
"Toyota's solution to the sticking accelerator is elegant.
"It took Toyota way too long to put the pieces together to get there."
It's the same question my colleagues have been asking me. I haven't known how to answer any of them until this morning. Today, something clicked.
Toyota's situation is not unlike the failed intelligence and security system that allowed the Christmas Day (underwear) bomber to board a plane and nearly kill 100s of people. The system is highly dispersed. It relies on people. It operates in a variety of political situations, governments and local customs. People speak different languages. All the data was there; they just hadn't (couldn't?) put it together.
Finding those mistakes in a timely way and acting responsibly will separate the best organizations from all others.Toyota is the world's most dispersed designer and manufacturer of automobiles. Yet, my hunch (not any more than that), is that Toyota has not fully recognized that fact. Their traditional management practices have not kept up with their expanding presence in the world. Toyota, like the intelligence community, hasn't developed their capability to make sense of the data that is available to them. They have no alternative than to use business intelligence (BI) tools to understand their evolving situation. Everyone needs to grasp this reality: systems and situations that rely on people must confront the fact that human beings make mistakes. Every one of us makes mistakes. Finding those mistakes in a timely way and acting responsibly will separate the best organizations from all others.
I expect Toyota will become a very big user of BI software to see patterns developing early. They have no other choice. Automobiles are becoming ever-more complicated. I don't see that changing. Toyota is also participating in far more markets, with far more local languages and local content. That won't change either. They have to find a way to make sense of what people throughout their network are learning throughout design, production and while the product is in use. There is no alternative.
I expect Toyota will become a very big user of BI softwareToyota people, like the vast majority of people in the world, are well-intentioned. As successful as they are, Toyota people are struggling with the limitations of of what they can see and understand from a local perspective. Toyota is dealing with a world teetering on going out of control at any minute. Complexity is just one small step away from chaos. That is Toyota's problem and our redemption. They are the canary in the mine for every company that has complex products which are developed, manufactured and sold throughout the world. We can be thankful that it is Toyota, with their legacy of problem-solving and respect for people, who are at the forefront of addressing this compounded complexity and dispersed model.