Sebastian Fixson: How does an organization build the appropriate culture such that problems (failures, mistakes, …) are seen as opportunities for improvement of the organization rather than opportunities for individuals to lose face, their job, etc.? By Sebastian Fixson, Co-author of ‘The Power of Integrality & Evolving models of supplier involvement in design’ – Last updated: Sunday, June 13, 2010 – Save & Share – Leave a comment

The negative press that Toyota recently received in association with the recalls, made me think about an issue that on one hand seems to be central to lean, but on the other is very difficult for many organizations to actually do.  That is: confronting ‘problems.’  As earlier blog entries discussed, there are two ways of looking at something like Toyota’s plant closure announcement: (i) It simply is the extension of Toyota’s commitment to ‘stop the line’ when a problem is detected to find the root cause no matter how expensive, or (ii) the size of the expense for the plant closure is a signal of the equivalent size of the problem, i.e., an admission of equally sized guilt.  Toyota’s culture (“No problem” is a problem) seems to take the first  perspective, whereas the press in the West clearly took the second view.  While this incident suggests that even Toyota faces a difficult challenge when it needs to convince its external audience that attending to problems (even if at high costs) is actually the right thing to do, many other organizations have a very difficult time to establish this attitude even just internally.  Thus, my question to the expert community on The Lean Edge is this:   How does an organization build the appropriate culture such that problems (failures, mistakes, …) are seen as opportunities for improvement of the organization rather than opportunities for individuals to lose face, their job, etc.?  In other words, how do you convert an organization from searching the five ‘who’ to searching the five ‘why’?

Art Smalley Response:

How do you build a culture such that problems are seen as opportunities for improvement? It all starts at the top and cascades down from there in my opinion. Employees are somewhat like young children in a family. They tend to model and reinforce behavioral norms that they see around them especially traits from senior leaders. In Toyota’s case there are lots of roots to examine that influenced the company’s culture and development with respect to this dimension.

For starters there are the five Toyoda Precepts attributed to founder Sakichi Toyoda and codified by his sons Kiichiro and Risaburo in 1935. One precept in particular specifies that employees seek to be ahead of the times through endless creativity, inquisitiveness, and pursuit of improvement. So the notion of “improvement” has been part of the Toyoda family tradition for many decades.

It is of course easy to write the words on a poster and hang it on the wall but in Sakichi’s case he truly modeled the words through his actions and behavior. Several excellent books exist depicting his life and contributions in Japan unfortunately they are not available in the English language. However you can take my word for it that Sakichi practiced what he preached about problems, improvement opportunities and he conveyed those lessons to his family members and employees.

Professor Spear has already mentioned the concept of Jidoka (自働化) that was originally developed by Sakichi Toyoda on his various automated looms. Without the aid of modern day sensors he invented clever mechanical devices to make machines stop when a single piece of thread broke on one of his looms. These machines are on display at the Toyota Commemorative Museum of Industry and Technology.  If anyone ever has the chance to visit Nagoya Japan I highly recommend a stop. Tours highlight the various looms and how the devices work in detail. I try and visit every time I go back to Japan to reconnect with the company roots every few years.

In addition to the Toyoda family contribution to the Toyota culture we also have the United State to thank as well. In 1950 Toyota was no where near the world class company that it is today. Its productivity was estimated at 1/9th that of Ford Motor Company. The company struggled to stay afloat until addition demand by the U.S. government for 5,000 vehicles was created by the Korean War. In addition to this life saving incremental demand however was the infusion of the successful Training Within Industry (TWI) materials for training leaders in manufacturing.

You can read about and access the original TWI materials on this site for those interested. The materials were introduce to Toyota starting in 1951 when Taiichi Ohno requested the Training and Education Department to find something to help develop leaders who could think and problem solve and develop others in this capacity. The five basic needs of a leader in the TWI materials were stated as:

1. Knowledge of Work
2. Knowledge of Responsibility
3. Skill in Instruction
4. Skill in in Leading
5. Skill in Improving Methods

The first two topics were expected to be taught on the job. However the three latter items were considered “coachable” skill sets. Toyota adopted the materials and used them in different forms for decades. Part of the TWI training was the concept that problems could be recognized and improved upon by individuals or small teams using simple tools and concepts. Much of Toyota’s fable culture (respect for teaching, leadership, and improvement or Kaizen) has some initial roots in these courses.

Another way that “problem awareness” was introduced to Toyota came via Eiji Toyoda’s insistence upon implementing Total Quality Control (TQC) in the early 1960′s. In the TQC program the basics of problem solving, statistical process control, and other techniques including the popular Deming Plan-Do-Check-Act cycle (PDCA) were introduced to managers. After just a few years of adoption Toyota won the Deming award in Japan for its improved quality.

By the time I entered the company all of this was highly entrenched in the culture along with the other techniques and disciplines of the Toyota Production System. Still this culture had to be nourished in order to continue to grow. In skilled trades programs (maintenance or spare parts machine shops for example) training was still somewhat of an apprenticeship program. I will exaggerate for effect but a popular supervisor of the spare parts machine shop named Mr. Suzuki once told me his first few years in the company he swept the floors, fetched materials, and made tea. Eventually he was allowed to operate simpler machines with coaching and guidance. As time went on he was given more difficult parts to make and eventually taught how to make complex items and how to fix associated problems. I interned in this shop as part of my training. I was afraid of making mistakes on the manual lathe I was using and did not want to scrap parts. Mr. Suzuki chided me however and said that no one makes it right the first time and the important thing is to learn by doing. This is so critical in fact that his shop has a line item in the budget for scrap allowance related to new employee training. Needless to say once I overcame my initial hesitation I did not disappoint him on the scrap dimension.

In other ways Toyota augmented the culture of “problem awareness” and “improvement” in every department that I ever came across. It would take too long to list them all and be too time consuming as well. One common theme however was that all new employees in the office whether of clerical or engineering background had to solve a problem in a structured fashion in their first year on the job. For a couple of months you were “tortured” with a real life medium difficulty problem that required using some type of structured analysis to solve. You had to show your work at certain intervals and get coaching in return from different managers. Most people struggled their first time through the process and had to re-write what they were doing numerous times. I must have burned up several notebooks in the process.

I think it is important to note that Toyota fosters this notion of “problem awareness” and “improvement” in all departments and levels of the company. It may not sound impressive but the results add up over the years. I often get invited to tour facilities and comment upon various activities. Very few can match Toyota in terms of problem solving prowess on the shop floor. A recent QC circle activity in Toyota from a couple of years ago is a good example of what I mean. A team comprise solely of shop floor employees on their own worked on what in their world was a “glaring problem”. The problem process was breaking tools and exhibiting a 0.05% scrap rate. The team eliminated the tool breakage and defect problem which of course is impressive. Most companies I visit though would be delight to have a process with 0.05% scrap as an example of a glaring problem needing attention. As a old Toyota manager once told me, “after 50 years of doing this over and over though we should be pretty good at it”.

How do you build this type of culture? I don’t think it can be done overnight and it starts with leadership at the top level of the department or facility or organization. The concepts required in my opinion are fairly basic and can be found in the TWI material or most TQC programs and of course Sakichi’s Jidoka concept. The difficulty is in modeling the right behavior and of course being tenacious and smart enough to obtain results.