What Stood Out in Toyota’s Kentucky Turnaround
In 1999, during his first year at Toyota Motor Manufacturing Kentucky (TMMK), Darril Wilburn was given two jackets and a watch. The gifts celebrated how good everyone felt about the plant. The Camry was the best-selling passenger car in the U.S., and people in Georgetown assumed that made the plant No. 1, too.
It didn't. Sales numbers say little about whether a plant is making money, and TMMK was struggling in ways most people inside it couldn't see yet.
That's the setup for the chapter I found most useful in Courage, Humility, Kaizen: The Three Disciplines of Toyota Leadership, the new book from Darril Wilburn and Hiro Yoshiki. Darril was a management development specialist at TMMK, and he talks about the book in my recent Lean Blog Interviews episode. Hiro is the Toyota executive who came back to Kentucky in 2000 to lead the plant's turnaround. Chapter 9 is told in his own voice, and it's one of the more candid accounts of a Toyota operation in trouble that I've read.
Here's what stood out to me.
The Plant Everybody Toured
TMMK was one of the most popular tourist stops in Kentucky, and visitors walked out impressed. Even in its weakened condition, the plant looked better than most American factories.
Inside Toyota, the reputation was different. Hiro writes that other Toyota plants, in Indiana and West Virginia, were telling their people not to send anyone to Kentucky for meetings or training, for fear they'd catch whatever was wrong there. Parts were stacked along the aisles. Production targets were being missed, injuries were driving absenteeism, and morale had collapsed. Communication had broken down so far that team members assumed management was misleading them, whatever management said.
The executive meetings sound familiar. Hiro describes a vice presidents' meeting with no prioritized agenda, where a single objection could kill an important item and the group spent close to an hour on the color of T-shirts for employees. They didn't decide that either.
I saw a version of this at General Motors in the mid-1990s, where executives insisted market share would never fall below 30 percent. A healthy-looking scoreboard is easy to believe, especially when the cars are selling.
No Villain in the Story
What I appreciated most is how Hiro explains the decline. He lists the obvious candidates. Local managers had slid back to the management habits they learned before joining Toyota. The Japanese coordinators had lost their influence. Headquarters hadn't watched closely enough. He says all of that was true, and then writes:
“Blame does not solve anything.”
He's also candid about Toyota's own part in the problem. Every time Kentucky struggled, the company sent help from Japan, as many as 200 people at once. They fixed things directly, quality recovered, and when they went home the plant slipped again. That cycle repeated two or three times before Tsutsumi, the parent plant in Japan, recognized that rescuing Kentucky was building dependence instead of capability.
Anyone who has watched consultants or a corporate improvement team “fix” an area and leave will recognize the pattern.
Good Intentions, Passive People
This is the part I'll be thinking about for a while. Many of TMMK's leaders were strong on the shop floor. They knew the operation and went to see problems firsthand. But their habit was to go around the managers who reported to them and give detailed instructions directly to the line. At kaizen presentations, they jumped straight to step-by-step answers.
The result, as Hiro describes it, was a passive mentality: leadership will decide and give the orders, “so there is no point in thinking for ourselves.”
He's clear that this habit came from good intentions and a real sense of responsibility, which is what made it hard to change. He also didn't expect people's leadership styles to change much. So he built structure around them, defining who initiates, who's consulted, who approves, and who's informed for each major type of decision.
This connects directly to my next book, The Silence Tax. In my keynote polling, futility comes up far more often than fear as the reason people stop speaking up. Futility is the belief that speaking up won't change anything. Hiro doesn't use that word, but I think this is what it looks like when it shows up without a bad boss. Nobody at TMMK was punished for offering an idea. People just learned that someone above them would always have the answer first.
Hiro's fix for the leaders themselves is worth noting. He sent experienced managers to supplier plants for jishuken, intensive weeklong improvement work, where they could find out how much TPS they really knew without the embarrassment of learning in front of their own teams. Most weren't happy about it at first. Many came back saying it was the most eye-opening experience of their careers.
Bad News, Told Plainly
Hiro moved communications out of Human Resources and talked to team members directly on the plant's internal news program. When Toyota was about to announce something that disgruntled team members might seize on, TMMK told its own people first. He encouraged leaders to open with something like, “Okay, folks, we have news. This may not sound very positive, but this is what happened.”
He also went after the numbers. Some plant metrics were defined in ways that left out problems that were inconvenient to count, so he moved to data captured directly from machines and software. And he describes a familiar kind of improvement program, one where people claimed savings from their kaizens while creating losses elsewhere that nobody calculated. His summary: “They counted the Kaizens, but the company was losing money.”
I've seen improvement programs measure activity while the operation got worse, more than once. It was a little reassuring, in an odd way, to learn Toyota had the same problem.
What Changed
The results are significant, and Hiro is careful to credit the people of TMMK rather than himself. The number he returns to most is the plant's breakeven point. In fiscal year 1997, TMMK had to run at 90 percent of capacity just to cover its costs. By fiscal 2007, that figure was 60 percent. He also reports that operating income grew more than sevenfold and that trainer support from Japan dropped by more than 80 percent from its peak by 2003.
He's also honest that it was slow. Nearly a year in, he reported to headquarters that he hadn't yet produced definitive results.
One line near the end of the chapter sums up his view of the whole effort: “‘Doing TPS' was never the point.” The point was running the business well and developing people, whatever you call the methods.
A 2 or a 3
The book's introduction has a scene that pairs well with this chapter. In 2002, Darril asked TMMK's senior executives to rate how well the plant lived the Toyota Way principles, on a 1-to-10 scale taped to the floor, and to stand on their answer. The Japanese leaders stood at 2 and 3. The American leaders stood between 5 and 8.
Same plant, same words, very different answers. I suspect the American leaders were comparing TMMK to other American plants, where it looked very good. The Japanese leaders were comparing it to Toyota's own standard.
Which one would the people closest to your work choose?
Courage, Humility, Kaizen covers much more than this turnaround, including the Toyota Way 2001 and the management systems Darril and Hiro argue sustain the three disciplines. You can also hear Darril talk about it on Lean Blog Interviews.
