Stories

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.

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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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“But it Doesn’t Work that Way In the Real World.”

Cohort 3 Pic

I’m the handsome one on the left, arms folded.

One of the requirements for the video game school I attended was to create a fully functional game in an eight month period. Our class was divided into two groups, each with about 17 team members consisting of programmers, artists, and producers. I was the lead for one of these teams.

Our team was managed with the idea that no one single person knew it all. We had to work together to succeed. Team members were empowered. Their opinions were solicited and valued. We encouraged team members to speak up if they thought there was a problem. Trust and respect was a core value. Collaboration and listening to others was important to us. Some faculty members faulted us for our “democratic” way of managing the team, but they could not argue with our results. We were productive, were well organized, and had incredible morale and momentum. We always showed progression every week.

The other team, on the other hand, was floundering. There was disorganization and infighting. Morale was poor. The team blamed their project lead for not managing the team well. The team lead, in turn, blamed the team for not working hard and not doing their jobs. One week they would take a step forward and the next take two steps back.

The other team members would complain to us about their lead, “It’s a dictatorship! He’s always telling us what to do. We don’t have any say in the matter! He just reminds us that he’s in charge. We always just end up fighting.”

People who worked with me on previous projects asked me to talk to their lead and give him some advice.

The team lead and I went out for lunch a couple of days later. I told him what his team mates were saying. He didn’t seem surprised. He asked how we were running our team. When I told him, he was curious as to why we managed a team like that..

“Because we are all still learning,” I said. “We need each other’s knowledge in order to succeed. Besides, we are all students. None of us are getting paid. We don’t have that to hold over anyone. We have to find other ways to motivate the team.”

The lead just shook his head and smiled at my naivety. “But it doesn’t work that way in the real world. Its not going to be like it is in here where they all have a say. They have to get used to it.”

A couple of months later during the mid term period check-in, the other team performed poorly compared to ours, and as a result their game was canceled and all the team members were put on our team. Together, all of us accomplished something great in the end.

Perhaps the other lead was right. Perhaps running a team like we did isn’t like that in the real world. But if you could chose between these two types of teams, which one would you want in your real world company?