Wednesday, July 10, 2013

Can you copy a culture? The NUMMI story

In 2010 I came across a brilliant radio show of This American Life - episode 403: NUMMI.
It tells a story that's taught in business schools, of a joint venture by General Motors and Toyota - in 1984 these competitors decided to build cars together, each for their own reasons. NUMMI is the name of the factory, it stands for "New United Motor Manufacturing Inc".

Act one tells the miraculous story of this GM factory in California - it was considered to have the worst work force, always striking, struggling against management, with no work discipline what-so-ever: drinking on the job, drugs, gambling. Then, Toyota stepped in and transformed this plant into a Japanese style plant, using the Toyota Production System (TPS) principles. The real miracle is that it worked - and that 85% of the work force was the same. This a truly inspiring story of human potential and how systems can be designed to bring the best or worst of of people.

Act two is a different story. GM was for decades losing ground to Toyota. It had every reason to want to learn whatever they could from NUMMI and improve their quality across their other plants. This didn't happen - at least not fast enough. In 2010 GM went bankrupt. This part reveals some of the reasons and dynamics that led to the tragic outcome.

I recommend investing an hour to listen to it. Act one tells you how to get it right, and it is really emotionally moving - the interviews with employees who went through the transition reveal NUMMI deeply changed the lives of many. It also describes some of the key aspects of the TPS and how it was successfully brought to the US.  Act two  is a handbook for nearly everything that can go wrong when you try to change an enterprise.

What I like about this radio show is that it demonstrates so well that the Toyota Production System is not a "business process", or "best practice" you can see and replicate. It is a culture, with it's own values. It is not something you can just perform, it is rather something you can choose to become.

Agile transformation often suffer from similar difficulties - you can follow the rituals, but if you don't get the underlying values and mindset, you just end up creating "cargo cults", or simply resistance.

I'd like to thank Elliot Holar who shared this episode with me soon after it was aired - aside from this specific episode, I became quite a fan of This American Life. They rock. Thanks, e.

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