Month: September 2016

The Story of NUMMI: The Difficulty of Changing Paradigms

nummi-plant-toyotaMost people would probably tell you they don’t have a problem with change. The unspoken add-on should be, “as long as it doesn’t contradict my core beliefs.” Whether we realize it or not, we are prisoners of our own culture, ideas, and experience—i.e., our paradigms, and we must change them to find success.

I first heard the story of NUMMI when I attended my CSM class. Its a popular story in the Lean circles. NUMMI was a joint venture between Toyota and GM during the 1980s. Toyota wanted to start making cars in the U.S. GM wanted to know what Toyota’s methods were. At the time, foreign cars, particularly Toyota, was cutting more and more into GM’s market share and GM didn’t know how to make small inexpensive fuel-efficient cars.

GM brought to the table its former plant in Freemont, a facility notorious for its poor quality, productivity, and hostility between workers and employers. Toyota brought its now fabled Toyota Production System. The transformation was incredible. Folks predicted this would be the turning point in GM’s misfortunes.

They were wrong.

Despite NUMMI’s success, the lessons learned couldn’t spread to other plants because GM simply couldn’t change its paradigms. This culminated in its 2009 bankruptcy and the multi-billion dollar government bailout and the subsequent closure of NUMMI.

The NUMMI story can be found at This American Life podcast or transcript.

nummi-time-of-death-921-am-pacific-daylight-time-18822_2

Last Corolla off the NUMMI plant floor when it closed in 2010. A bad combination of economic downturn and folks unable to change their paradigms. The plant is now Tesla Motors.

A retrospective of NUMMI from Steve Bera, one of the 16 GM employees selected to use the lessons from NUMMI to change GM, the dubbed “NUMMI commandos,” can be found at a pair of podcasts on leanblog.org here and here.

 

After listening to these programs, I found myself a little depressed. One of the podcasts stated NUMMI succeeded because the plant had to start from scratch. The workers had to change because they couldn’t find jobs. The other GM plants were still in business and despite NUMMI’s success, people’s paradigms (i.e. “that won’t work here”) killed the change movement. Without a crisis, the GM plants weren’t willing to change its ways.

young-deming

“It would be a mistake to export American management to a friendly country.” BEST DEMING QUOTE EVER.

This is a direct parallel with what Deming taught. He pointed out that after WWII, Japan had to change because its infrastructure and culture lay in ashes and ruins. He said America’s crisis was invisible–we had been successful because we had no competitors after the war. We could manage however we wanted to and still be successful (and we were). Because we were successful, we thought our management methods were sound. How could we know otherwise? But those days are over. The other countries have recovered and now our chickens are coming home to roost. Our ways of management, i.e. our paradigms, have to change or we will become extinct.

 

It made me wonder– if an organization hasn’t been brought to its knees, is it possible to change its ways? Do we have to destroy the old system first? And if true, are we change agents wasting our time?

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BOOK REVIEW- The Deming Dimension

deming_dimDAN’S SCORE: Stars 4
The Deming Dimension
by Henry R. Neave


Anytime I talk to people about Agile, it isn’t long before I bring Deming into the conversation. Most people have heard about him in passing, but many don’t realize what type of impact he’s had, directly or indirectly, on popular methodologies such as Six Sigma, the CMMI program, scrum, Lean and TPS, Kanban, and older methodologies such as TQM. I believe if you study Deming, these other methods will make more sense to you. For me, Deming’s principles are the bedrock for organizational success and all these others are the various methods and tools for implementation and are better applied if you understand Deming.

Deming, despite his genius, can be tough to understand. Perhaps this is why these easier- to-understand-methods are so popular and Deming so little known (the Harvard Review recently said he’s been forgotten). I listen to the Deming Podcast regularly and a frequent story of those who met him or attended his seminar was that at first they didn’t understand what he was saying. One person reported he thought Deming was senile. Even his closest students have said Deming could be difficult to understand.

I haven’t read Out of the Crisis or The New Economics yet, which are his most known books. I’ve read the Essential Deming which is a collection of his articles and letters revolving around his core principles. I’d certainly recommend it, but for those starting out on Deming, I recommend the Deming Dimension (buy it here). This was written by one of his students and breaks down what he was trying to say into a more understandable format. Its a pretty easy read. I finished it in about a month and I’m a slow reader.

Be warned! One person on the podcasts reports that when he met Deming at one of his seminars, Deming told him, “what I’m about to tell you today will haunt you for the rest of your life.” Its true. Deming may be tricky to understand, but once it clicks, it clicks, and your entire world view will change.

I also highly recommend checking out the Deming Institute. They have a blog, Deming’s articles, videos, the podcast, and more. Its an excellent resource.