A Modern Parable

I recently ran across the following article on a blog:

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 composed of senior management was formed to investigate and recommend appropriate action. Their conclusion: The Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

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 rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rower. The new change initiative also included plans for getting new paddles, canoes and other equipment, plus extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the senior executives as bonuses and the next year’s racing team was outsourced to India.

Sadly, The End.

Sad, but oh so true! Here’s something else to think about: Ford has spent the last thirty years moving all 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 Ford racked up 9 billion in losses. Ford folks are still scratching their heads.

While this parable was about the auto industry, it is repeated in many American Industries, particularly those in the manufacturing sector.

How can we survive as a country without a viable manufacturing sector? There are only three ways to create wealth. You can grow it, you can mine it or you can manufacture it. Everything else only transfers wealth. And yet we continue to move or outsource manufacturing out of this country. We do this under the pretense that we cannot compete with lower cost wages elsewhere in the world. Yet as so clearly pointed out in the parable companies like Toyota are competing and running highly efficient plants in this country. The cost of labor is not the problem. The problem is our bloated management structures and the fact that we often waste our most valuable resource, our people.

The key to success is simpler organizational structures and organizing people around a work flow or value stream. Set easily understood and highly visible goals and then empower the team to accomplish these goals. The goals need to be aggressive and yet achievable. There are several ways to establish appropriate goals. Two of my favorites are benchmarking the best of the best or developing a zero loss journey roadmap. I’ll talk more about these methodologies in a subsequent blog post. Finally results must be continuously monitored and constructive, timely feedback must be provided to the team.

AS IT professionals, our challenge is to design and build information systems that can assist organizations in maximizing the potential of our human resources to achieve a common goal. Most of our current systems were designed to provide data to complex management structures in complex departmentalized organization structures. As such they do not provide meaningful information that can be used by production teams to achieve their goals.

How can we in the IT community help organizations get information (not reams of data) to the “rowers” that they can use to win the race?

2 comments

  1. This is a very interesting article and I agree wholeheartedly with the premise; however, the parable seems to be somewhat out of date. Especially, since Toyota is in a very bad place right now, oddly enough, due to quality and management corruption, i.e., covering up quality and safety issues. And, Ford posted a 24% market share increase so far this year.

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