A remarkable article about Toyota appeared in the CNN site yesterday that exposes Toyota’s Achilles heel – the ignorance of racism. It also raises some serious doubt about their vaunted "Respect for People" principle.
The point of the article is that Toyota is having management staffing problems. They do not have enough qualified Japanese staff to control their growth – almost all of which is occurring outside of Japan. Despite 75% of their personnel being from other countries, and having had a U.S. sales presence for almost 50 years and a manufacturing presence for over 20 years, all 26 Toyota board members are Japanese. All of the senior decision makers at headquarters are Japanese, as well.
Mitsuo Kinoshita, the guy in charge of Toyota HR, says, "Getting overseas staff to share our views on management and quality is very difficult." Really? That is either self-delusion or a tribute to incredibly poor training if 20 years of U.S. manufacturing has not produced anyone who understands Toyota’s views on management and quality. Or it could be that the Toyota management mind is such that, at the end of the day, they cannot ever come to accept the notion that a non-Japanese can be their managerial equivalent.
Their ‘Japanese only’ headquarters culture is a self-fulfilling prophecy. They point out that employee turnover at non-Japanese plants is much higher than it is in the land of the rising sun, which means "a 20-year track record means a lot more for a Japanese plant than factories elsewhere." With that excuse for refusing to allow non-Japanese folks into the inner circle, it seems to be a safe bet that good people will continue to leave Toyota, keeping the turnover rate churning. Staff turnover is an accurate measure of long term management performance and, by their own admission, Toyota is not doing well. It is self-serving of them to write this off to American culture.
Why would a smart, hard working non-Japanese man or woman stay with Toyota for very long when (1) there is a glass ceiling limiting the chances for promotion, and (2) there is good money to be made taking those skills to other companies or out on the consulting trail?
Mr. Kinoshita says that Toyota’s insistence on micro-managing and controlling everything from Japan is because, "We’re afraid of slipping, so we can’t help but interfere." How much respect does that show for people? It seems to me that the cornerstone of respect is trust, and trust for anyone non-Japanese seems hard to come by at Toyota.
Even Taichi Ohno and Shigeo Shingo were deluded by national pride into downplaying their own contributions. So much of their writing was couched in terms of how Japanese look at things and do things – attributing much of the Toyota Production System to this unique Japanese outlook and value system – yet very, very few Japanese companies have duplicated Toyota. Toyota founder, Sakichi Toyoda, was every bit the racist Henry Ford was and could be just as cruel in his opinions about the West as Ford was when it came to the ‘International Jew’. That proud, but ignorant, value system does not seem to have completely evolved out of Toyota.
In a post a few days ago, I included a quote by Massaki Imai, founder of the Kaizen Institute and vaunted TPS guru, where he said, "Japanese companies developed a very effective system of management, particularly in the manufacturing sectors, and the rest of the world has much to learn from these practices." I beg to differ, Mr. Imai. "Japanese companies" did not develop "a very effective system of management" – Toyota did. They are simply one Japanese company that was built by some very intelligent and capable individuals. The fact that they were Japanese was not the reason for their success. If it were, Japan would not be losing manufacturing jobs at a rate greater than the U.S., and there would not be such a thriving market for lean consultants in Japan.
Toyota says they are stepping up to the problem by establishing training and education facilities in Japan, the U.S., Thailand and England to develop capable managers. That strikes me as a worthwhile endeavor, but not one that will solve the problem. If 20 years of demonstrated performance results by some very capable American managers in Toyota plants is not enough to convince the boys in Toyota City that someone who is not Japanese is qualified for advancement, then a sheepskin from Toyota U is not going to do it.
In Rebirth of American Industry, I demonstrated how forty years of business success blinded GM and Ford to the flaws in their management system. They were so sure of the ‘rightness’ of their model, they were incapable of recognizing and adopting improvements from external sources – namely Toyota. Toyota is doomed to follow the same course if they do not develop the intellectual and moral integrity needed to take off their racial blinders.