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Jeff Liker

Jeff Liker: The value of Trust – without safety in Toyota, nothing else matters

By Jeff Liker, - Last updated: Monday, March 15, 2010 - Save & Share - Leave a comment

It is interesting to get a question as direct as this, especially coming from a management icon like Edgar Schein.  Notice that the question implies Toyota is not concerned about safety regardless of how one answers.

In the current recall crisis certainly the stories formulated by the press paint a picture of an arrogant company that is secretive about safety test results and has put profits before safety.  That message has been reinforced by many outside observers citing secret memos and mountains of data about sudden acceleration incidents over a decade that were ignored until the U.S. Department of Transportation had to aggressively intervene including visiting Toyota City to personally meet with Toyota managers.  Finally, backs against the wall, Toyota executives caved in and started making needed recalls.  Even advocates of Toyota and lean on this site have taken the view that Toyota lost its way beginning with the decision to put growth and profits ahead of all else as part of Global Vision 2010 chasing 15 percent market share.  Now a number of them have suggested this led to hiring too many employees and temporary employees who were not sufficiently developed to design and build cars with the painstaking attention to detail characteristic of Toyota in the past.  Making mistakes is not the same as a corporate culture that lost its soul putting profits before people.

My first reaction is that safety is not only part of the Toyota Culture, but it has always been the first priority and still is.  Inside the factories the message is always very consistent that without safety nothing else matters.  Outside the company the Toyota Way starts with the concept of customer first which starts with customer safety first.  It is what Edgar Schein would call an underlying assumption of Toyota—so fundamental it is hard to imagine it could be any other way.

On the other hand a flippant answer does not do justice to the question or the stature of the questioner.  How do I know this?  Recent evidence calls into question the assertion that Toyota actually has an unusual amount of problems with safety in general or unintended acceleration in particular.  Mainly these articles are written by technology magazines like Popular Mechanics (http://www.popularmechanics.com/automotive/new_cars/4345385.html), car magazines like Car and Driver (http://www.caranddriver.com/features/09q4/how_to_deal_with_unintended_acceleration-tech_dept) or various journalists writing opinion pieces (http://www.theatlantic.com/business/archive/2010/03/how-real-are-the-defects-in-toyotas-cars/37448/).

I sat down for hours with a Toyota general manager of the vehicle recall group who explained the history of unintended sudden acceleration and what had happened.  It starts with sketchy data on problems as people bring cars to dealerships that assign vague classifications to the problems or send in complaints to the National Highway Traffic Safety Administration (NHTSA) with vague classifications and often no name or contact information.  Toyota sees a tiny fraction of the actual cars with problems.   The United States was the only country in which they had an especially large number of sudden acceleration complaints.  Those they carefully investigated over the decade either had no discernible problem or carpet issues.  This was agreed to by NHTSA and Toyota working engineer to engineer.  The carpet issues came from thick, rubber after market floor mats, protecting the carpet from water and mud, that were not properly clipped down so they slid around and could entrap the gas pedal.  Only Americans used these in any substantial numbers.  Toyota’s initial answer was that customers should be encouraged to take out the original floor mat, get a rubber floor mat that fits, and clip down the rubber floor mat.  Then it would be safe.

By the summer of 2009 NHTSA was getting outside pressure and wanted more from Toyota—they had to find a problem, preferably in their electronic computer system.  Toyota notes in their infamous “smoking gun” memo that NHTSA was getting political instead of technical.  The cooperative engineer-to-engineer discussions were turning to NHTSA management warnings and threats as the pressure built.  Toyota was very confident in the fail-safe design of the computer system.  They are well known among auto suppliers for their stringent safety requirements and “test to fail” methods where they test every part to the extreme of failure.  Yet, they could not make the electronic throttle system fail even exposing it to magnetic interference at a power plant.  So Toyota kept returning to the explanations of carpet entrapment or driver error (e.g., pushing the gas pedal when you meant to push the brake).

It came to a head in the tragic accident of the police officer and his family in San Diego—a case in which someone in a Lexus dealer installed an overly large rubber mat, on top of the regular carpet mat, without clipping it down.  It entrapped the pedal and the family died.  The car had caught fire after the crash and the upper right corner of the rubber mat was fused to the pedal.  After this Toyota finally gave in and immediately put out a public notice to remove carpets and then took a huge step of recalling 4.3 million vehicles.  Most would get the pedal cut down so it had enough clearance for the carpet mat they installed and a rubber mat on top of that, even though that was not advisable.  Some would require lowering the floor pan.  Some others would get a brake override system.  This then started the media frenzy and speculation that Toyota had lost its way.  This frenzy was further fed when it was discovered in November by Toyota that they had three Corollas with “sticky pedals” when a composite material in the accelerator pedal gut exposed to lot of moisture and wore over time.  They found less than 15 cases of this.  Another 2.2 million vehicles later and Toyota’s reputation in the media was toast.  Any further bad news multiplied the public relations damage.

In The Toyota Way my first principle is to base management decisions on a long-term philosophy, even at the expense of short-term financial goals.  I argue Toyota is a shining example that a company can thrive financially in a capitalistic world while doing the right thing.  Toyota’s business planning always starts with guiding principles and one of them is:  “Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities.”  Former president Watanabe, supposedly one of the villains who drove Toyota from its core values, preached the vision that Toyota should set as a goal to make a person healthier as a result of driving the car.

Recently I was on a TV show with a professor from Yale, invited because of his anti-Toyota perspective.  He personally maligned me for being unable to think independently about Toyota essentially saying I was trapped in the cult of Toyota-ism.  I threw back some retaliatory words, but was not satisfied with the whole exchange.  He gave examples of companies that failed to immediately pull product off the shelf when accused of tainted product, like Coca Cola, compared to companies that took bold action and were hailed as heroes like Pepsi Cola.  He thought Toyota blew it by covering up, blaming customers, and now it was too late to redeem them selves.  There was no reasoning with this guy who was on a tirade and convinced he knew all the dirty secrets better than anyone else.

For some reason this got me thinking about a conversation I had with one of my graduate school professors about men and infidelity.  He and I had become friends and it was well known among graduate students that he had affairs.  He claimed every man did it eventually.  I gave my father as an example of a man who would never do it.  When I said that my father had been a salesman who traveled regularly my professor friend laughed and said I did not really know my father.  Any man away from home that long has had an affair, but obviously I had put my father on a pedestal and had no insight into what he was really like when out on the road.  Of course I could not prove that my father never had an affair.  I just knew my father and it was unimaginable.  His beliefs and values are amazingly deep and even rigid.

Just as I could not convince my former professor about my father, I could not convince the Yale professor by simply throwing out facts.  Yes, but the small, right hand drive car that had a sticky pedal two years earlier was viewed as a unique problem and not associated with the sudden acceleration complaints in America.  Yes, but nobody has actually proved that the “sticky pedal” has caused accidents.  Yes, but, this professor was quicker and more articulate then me and came up with three facts to support his case for every one I had to support Toyota.  He won the debate—Toyota is an evil company.  It brought to mind an old classroom exercise I used to run where students get an equal mix of positive and negative facts about older women as workers but half are given a role to criticize and half to support. The critics glom onto the negative facts and the defenders emphasize the positive facts.  Facts do not cause attitudes, but how we perceive them is shaped by attitudes.

Reflecting on this I must be honest that I eagerly consume facts that support my view that Toyota cars are safe and the company unfairly maligned by the press.  I tense up when reading negative allegations with “supposed” facts that imply secretive, untrustworthy, profiteering executives who have lost their way.  I am guilty of a fundamental human sin: letting what I believe guide what I see as truth versus fiction. I have debated others on radio or TV who are overtly hostile to Toyota and I am also fully convinced that they have biases, for whatever reason, against the company.  It could be as simple as they took the position so now they want to defend it and win.  Or perhaps they are inherently distrustful of the motives of others.

I thought more about this and wondered if I should feel bad at my self-discovery of bias based on what I believe about the company.  Another word for that bias in this case is trust.  I grew up deeply trusting my father and his ethics.   After 25 years of “studying” Toyota I have come to trust the company, its executives and managers, and its culture.  I believe in Toyota and admire how hard they work to attempt to follow the Toyota way.  Why?   It is because of my accumulated experiences over twenty five years visiting offices and plants, interviewing countless executives and managers, working side by side with many former Toyota employees who are now lean consultants, visiting suppliers and dealers to Toyota, having PhD students write dissertations about Toyota, and so on.   I just finished a book about Toyota leadership with Gary Convis who was a managing officer of the company and have hundreds of hours of interviews recorded with him and executives and managers across the company.  The stories are inspiring.

The underlying theme of my collective 25+ years of experience is that Toyota managers and especially executives have a remarkably consistent predilection to “do the right thing.”  Every American I know who has been a part of the company has poignant stories about being advised to do the right thing.  It could be stopping the line, inspecting the 300th car for a quality problem detected in one car even though 299 cars were without the problem, or spending money to fix a potential safety issue even without evidence it has actually harmed anyone.

I have known Toyota since 1983 and cannot imagine the culture failing to act on known safety issues.  It would violate every implicit and explicit assumption that is fundamental to the culture.  I know it.  Many Toyota executives have handed me confidential documents and said “I trust you.”  Well I trust them.  I trust what I have personally experienced, witnessed and learned over the last three decades.  Without safety in Toyota nothing else matters.   Unfortunately I cannot convince someone who has not had those experiences and has for some reason decided to believe Toyota is unscrupulous and guilty.  Facts will not do it.

On reflection it occurred to me that Toyota had deeply affected my view of the modern corporation.   Before Toyota I would have happily agreed with the Yale professor.  He was correct that multinational corporations, as we know them, have some good years, then under the wrong leader mess up, then cover up, then get exposed.  That was never my experience with Toyota.   I suspect this professor never built a close relationship with a “company” that acted as an “institution.”  When people enter Toyota they become socialized into an institution.  In Schein’s words they have a “strong culture” and they deliberately socialize members intensively into that culture.  You become part of Toyota and Toyota becomes part of you.  It is not an abstract process as you build relationships with real people who have been with Toyota for many years and are wise sages.  They guide you on your Toyota journey.

The main implications for Toyota in North America of the Global Vision 2010 target of 15 percent market share was that Americans would have to grow up.  For decades they had been treated like children being socialized into the culture by the wise elders from Japan.  As the company grew the children had to become adults and live in the right way with much less oversight from Japan.  Global vision 2010 became North American self reliance. That was translated into the need to more aggressively develop people, which included more deliberately developing leaders who live the values.  Part of that was Toyota Way training for all leaders which began at the corporate office in Japan, but to dig deeper the North American leaders realized this would require daily coaching through on-the-job development (OJD).  There were major efforts to define OJD more explicitly and train leaders in how to use OJD to train future leaders.  This is an example of an explicit socialization process.

The Americans who join Toyota start as outsiders and over time grow to become insiders and they revel in the feeling of connectedness.  They are a part of something great.  They are special in a special organization.  They will inevitably be disappointed with specific decisions or directions at times, but it is with integrity, and they believe Toyota will ultimately do the right thing because that is what Toyota does.  It becomes akin to the collective consciousness and reflects noble principles of living, growing, and contributing.  This does not mean Toyota is perfect, and in fact the base philosophy is that no company can ever be perfect, thus the need for continuous improvement.  We are all struggling to deal with our imperfections as best as we can and there are those more experienced who can help us.  When someone in Toyota messes up it damages the organism and others come to help by understanding the problem, mending the organism, then learning how to avoid that problem in the future.

Since Audi got caught up in a media frenzy in the 1980s, when coincidently accused of unintended acceleration, American car companies have used the phrase “in the barrel.”  (http://www.automobilemag.com/features/news/1003_sudden_acceleration_the_early_years/audi_5000.html) When you are in the cross hairs of the media gun barrel you can do nothing right.  Everything, even seemingly innocent, is painted as sinister.  For decades Toyota avoided its turn in the barrel.  But they finally stumbled and were right in the cross hairs and the guns were locked and loaded.  I recall a recent Detroit News article that accused them of buying politicians by providing secure jobs in many states and charitable giving to local organizations.  Toyota executives were not skilled at handling personal attacks.  They spouted Toyota-isms like “we respect our customers and care deeply for their safety,” but these were seen as empty platitudes.  Admissions that they were not perfect such as “we let down our customers” were taken as confessions that the company hid data, broke laws, and fundamentally disregarded the value of human life.   The institutional paradigm that assumes all companies are inherently self-interested profiteers was clashing with Toyota’s view of itself as an institution with high ideals.

In the long term I personally hope the good guy prevails.  Toyota is a good guy.  It is a unique entity that seeks to do good.  It is a collective of people with strong bonds who try to learn together.  There are members who have the DNA and others who have yet to internalize it, but the percentage of leaders with the DNA is staggering and the strength of the bonds is like those binding molecules in a rock.  Something that unique and good deserves to survive and prosper as a model for more fragmented organizations that lack a coherent culture.  And it gives us in the lean community some hope that we have something important to teach.  Being an evangelist never was an easy life.

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