A Modern Parable
How Toyota Humiliates General Motors
July 31, 2017
A Japanese company (Toyota) and an American company (General Motors) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action. Their conclusion was the Japanese had 8 people paddling and 1 person steering, while the American team had 7 people steering and 2 people paddling.
Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were paddling.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the paddling team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 2 people paddling the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners, and free pens for the paddlers. There was much discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices, and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.
The next year the Japanese won by two miles.
Humiliated, the American management laid off one paddler, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.
The next year, try as he might, the lone designated paddler was unable to even finish the race (having no paddles), so he was laid off for unacceptable performance, all canoe equipment was sold, and the next year's racing team was out-sourced to India.
Here's something else to think about: GM has spent the last thirty years moving its factories out of the US, claiming they can't make money paying American wages.
Toyota has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:
Toyota makes $4 billion in profits while GM racks up $9 billion in losses.
GM folks are still scratching their heads, and collecting bonuses...
IF THIS WEREN'T SO SAD, IT MIGHT BE FUNNY.