A Modern Parable & Why We Still Love Toyota

By Torque Management, Wednesday, 2nd December 2015 | 0 comments
Filed under: Process Thinking, Business Process Management, Quality, Process-Improvement.

Toyota are a shining example of quality management and have been for many decades. It comes from a 'customer first' focus. This is a simple idea and very easy to dismiss as cliché but it challenges our belief that our own brilliant, creative ideas may not necessarily be the best one. When we have a 'great idea', many of us  cling onto it for dear life. A true customer focussed ethos requires we give up our egos in order to listen to the customer and respond to their needs in a systematic, business-focussed way. It's a little like becoming a humble servant rather than aiming to be a great leader with all the great ideas. The great leaders probably got their great ideas by listening to customers, and you can still channel your genius and creativity to work out how you solve problems for your customer.

This is a story about the differences between Toyota and Ford that made the rounds of many email forwards some years ago, but the point of which is as relevant today. It's a lesson in quality, in measures, and an example of how looking at the right data can help you succeed.

A Modern Parable Toyota Versus Ford

"A Japanese company (Toyota) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile. 

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team composed of senior management was formed to investigate and recommend appropriate action. Their conclusion: The Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager. They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. The new change initiative also included plans for getting new paddles, canoes and other equipment, plus extra vacation days for practices and bonuses. The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the senior executives as bonuses and the next year’s racing team was outsourced to India. Sadly, The End."

We'll probably each chuckle at this and reckon  we would have been Toyota, not Ford. But breaking it down, let's take a look at the decisions that led to Fords  downfall and consider how that might  just as easily apply to our own  decisions.  

The Answer is Too Obvious/Not The Answer We Want

So what made Ford think they that they needed to hire an outside consultant? It seems that while they could see where a clear and obvious difference lay, they couldn't see how to act on this or didn't believe it was relevant to the outcome.

When analysing your own company and comparing it to an outperforming competitor, you could quite easily come across a stark difference but, like Ford, still ignore the data. For example, your competitor runs customer service improvement programmes for all staff. You run a coffee shop business and you're not doing that, but you feel that your customer service isn't the problem because you have lots of customers, and no one has complained. You're simply not selling as many coffees. What you want is to sell more coffees, not increase staff training. “That would be a luxury” you think to yourself, and hire consultants to advise you. When the consultants recommend a customer service improvement programme, you ignore the advice and carry on as usual. 

Respect the Unbiased Advice

In the Toyota versus Ford parable, the consultants point out what the company already saw, too many people steering, not enough rowers. Or in our example – improve customer service through extra staff training, align salespeople with company goal's and enable them to up-sell or increase customer satisfaction and loyalty. You regret having wasted valuable time and money on outside consultancy to find out something you already knew but weren't going to do.

You Have An Idea You Like, So You Go With That One

Ford decides to re-organise, invest in new paddles and incentivise the programmes developed to increase their chances of winning. In our example, you want to sell more coffees. You decide to make the coffees smaller so people need to buy more of them, you invest in higher quality cups with a flashy new design and launch an advertising campaign targeting those who don't drink coffee, encouraging them to try it. As opposed to selling more coffees or extra products to your existing customers, or doing something to ensure they always return to your store. 

The following year, Ford loses by two miles. In your coffee business, your competitor outperforms you in profits by double that of the previous year. They didn't spend any extra money on fancier cups.

Taking Off the Blinkers & Putting On the Process Goggles

We can all have blinkers on when it comes to ignoring solutions presented to us if they don't align with our current understanding of why we're doing well, or what aspects are succeeding. It might come from personal bias, it might come from ego. You might be collecting or collating the wrong data or not spotting elements that could be affecting things. For example, in your coffee shop business, the month you introduce your flashy new cups to one of your cafés, you sell 20% more coffee. That same week, that location also introduced a new manager who was later moved to a different location or role. If the manager relocation isn't taken into the equation, you might find that the manager was the factor making a difference and you'll be left wondering why the lovely new cups were working so well, yet suddenly stopped having any effect after one month. So, continuing with this blinkered approach, when the sales drop you decide to you need re-deisgn the cups again to get the same 20% boost but this time, there's no increase. You fire the cup designer and your great new manager moves to a different coffee chain where they reward his great work and reap the benefits. In the meantime, like Ford, you are losing the race. 

Having a process based approach to your business can help you to operate without blinkers. Processes are documented for optimal performance, but you can also use data that allows you to measure and track their success. When we use TPSoP® with businesses, we enable them to easily spot the trouble areas  with a Green-Organge-Red traffic light system. With your team recording results easily for their tasks, a green light will show you at a glance, what's going well, orange will highlight a potential problem and red will clearly point out an area that needs attention. 

You don't have to get things wrong, so why waste time, energy and money doing just that? We've made doing the right thing right every time easy, because we like to see a rowing competition with a bit of competition in it. Toyota don't have the be the only company getting it right, you can too. 

Find out more about TPSoP® >

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