Notes on Japan & Toyota – No. 2

April 19, 2010

This continues on from a post in late February when the Toyota quality problem was all over the news, see here. The President of Toyota, Akio Toyoda, had just testified to the US congressional committee. When I was in Hong Kong I was watching a lot of NHK (Nippon Hoso Kyokai) World ~ Japan’s English language international television service. It’s a good alternative to the BBC or CNN. NHK covered Akio Toyoda’s testimony very comprehensively and since I had lived next to the town of Toyota in 2007/08 and had been reading quite a lot of KM theory I was inspired to write about Japan/KM/Toyota. I had intended to follow-up with some more postings but never got around to them. I’ll pick-up that thread here.

The Japanese can be admired for many aspects on how they work and how they produce such excellent quality products. Much has been written about this over the years. The Japanese are more serious about how they work and reflect more seriously on why they work they way they do then any other group I’ve ever worked with. On the other hand, it can be very easy to be quite cynical about the Japanese attention to detail. It can be just a bit too precious, too perfect and too controlling that sometimes borders on the simply unnecessary and wasteful of time, effort and common sense. However, the Japanese have a passion for getting something right and doing something well that makes all that attention to detail and control bearable most of the time.

What has Toyota done to address its quality problems and do its actions have anything to do with KM? When Akio Toyoda came back to Japan from his testimony I watched his first meetings with Japan Toyota’s employees. These were in Japanese and he kept saying over and over again, ‘I don’t think they understood me’, ‘my English wasn’t good enough’ ‘maybe what I said in Japanese didn’t translate well’. I cynically thought to myself, here is that very annoying Japanese habit of claiming that no-one can understand ‘us’. I understand Japanese well enough to know that he expressed himself quite well in Japanese. He was sincere, respectful and expressed deep remorse. Maybe not typical U.S. executive sentiments but I thought he came across well to most of the congressmen and women. His translator did a good job of explaining and expressing his words into idiomatic American English.

I followed the story in March and it seemed that Toyota was making some progress. At the end of March a ‘Special Committee for Global Quality‘ was formed. From a KM point of view, it is significant because it introduces decentralization, there a now 5 quality centres around the world instead of only one in Japan, non- Japanese people have prominent roles, an American, a Frenchman and two Chinese, are part of the committee. It seems to me the committee members are being drawn from the middle levels of the Toyota company and being combined with senior Japanese managers from the corporate HQ. Note that there are no women on this committee. If they truly wanted a new point of view a woman member would have been an easy way of achieving this goal. You can see the press conference after the first committee meeting here. Its very different from a corporate press conference in the west.

The committee is very focused on getting the customer point-of-view, shortening the line of communication between the customer and the senior Toyota management and bringing the customer point-of-view into the design of new products. The goal is to regain customer confidence. These all sound like good solid KM perspectives; listen to customer stories, listen to diverse points-of-view, bring the customer into the production process to make the customer feel a part of that process.

So far, April has not been a good month for quality assurance at Toyota. Production and sales of one Lexus model has been halted after U.S. Consumer Reports said the model was unsafe. Six hundred thousand mini-vans have been recalled in the U.S. to check and make sure the spare wheel doesn’t unexpectedly come off. Toyota has been fined US$16.8 million for covering up the original ‘pedal problem’ and it needs to either pay or defend itself by Monday, 19 April. Are these failures or just signs that the quality program is working? Toyota is listening to its regions, something it clearly had not been doing, and is responding with measures it feels will regain customer confidence. Halting production and sales of the Lexus and recalling the minivans are voluntary, see here.

It seems to me that Toyota is applying the ‘middle-up-down’ perspective described by Hirotaka Takeuchi in his article, Lessons from Japan. His perspective is that company vision is expressed by the top management, the line executes and the middle interprets between these two groups. Toyota management has a vision of restoring customer confidence, the line know that they have to change in someway and are waiting for the direction on what do from the middle-managers. Toyota didn’t need this sort of quality committee as it grew to be the world’s number one car-maker so it will be useful to see how bringing in these changes impacts the company and its products. It will take a few years to see if Toyota regain its customers’ confidence. Toyota still is the number global car-maker but whether or not it can hold that position is the ten-thousand dollar question.

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