Root Cause of Toyota's Failure: Employee Engagement

Peter Hunter
Posted: 03/16/2010

We have seen in recent weeks the joy with which the press seem to have jumped onto the back of Toyota when they recalled some of their vehicles due to unforeseen design faults.

Their joy seems little to do with the faults or their rectification but seems more of a celebration of the fact that the great Toyota has finally been found out.

For decades we have been assailed with tales of their profitability, their invincible progress and their second to none labor record, so it seems natural, in a schoolboy sort of way, to take the opportunity to lash out at them at the first sign of weakness.

What would be of greater value would be to discover the possible causes of this failure.

Much has been written about Toyota’s production system but very little has been written about the people who make that system work, the line workers and the supervisors.

Takishi Ohno, the man responsible for the creation and implementation of the Toyota way, wrote the definitive book about the system called simply "Toyota Production System."

This book, which was written by the master, was used as the template when setting up European and North American production facilities.

It concentrates exclusively on the hard administration of a production system that produced vehicles to the customers order instead of the Western method of producing as many cars as possible as fast as possible, then trying to sell those cars to the customer.

The essential difference being that the Toyota we buy is the exact vehicle that we wanted while the equivalent western vehicle is what the car company thinks we want. The car is then discounted until it reaches a price where even though it is not exactly what we want, we will buy it because it is cheap.

The Toyota philosophy is so radical and requires such a change of management strategy that the change in the production process itself overshadows some even more fundamental differences between the drivers of performance in the Orient and in the West.

For this reason when Toyota went into production in the West the emphasis was on the detail of the process, not on the people who carried out that process.

Bob Nelson, the author of "Keeping Up In A Down Economy" tells us that "the average number of suggestions given by an American worker to improve the performance of his company is 1.1 per year. The same figure for a Japanese worker is 167 suggestions per year."

This seems to indicate that there is a significant difference between the way that the Japanese worker feels about what he does and the way that the North American workers feel about what they do.

When the new Toyota plants in the West were built they slavishly tried to copy the detail of the Toyota production system without understanding the difference between the way that the workers in the East, compared to the West, felt about what they did.

Today that difference is called engagement.

Employers in the West are becoming aware of the huge value that is realised when a workforce is engaged but, other than running surveys to find out how engaged, or not, their workforce is, very few understand that it is possible to create engagement in an otherwise unengaged workforce, and fewer know how to do it.

The cars that Toyota recalled were all built in the West.

Is it possible that the faults that caused the recalls did not occur in vehicles produced in the East because they were spotted and rectified by an "engaged" workforce, while in the West the "disengaged" workforce knew of the problems but never reported them to Toyota because Western managers do not know how to engage their workforces.

Peter Hunter
Posted: 03/16/2010

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