What makes Toyota great

In the late 1800s, Sakichi Toyoda, like his carpenter father, loved to play around with wood. Before he turned 25, he started a business to make looms, which failed after a year. But he persevered, and when he turned 30, he created a steam-powered loom, which succeeded. Soon the Toyoda Automatic Loom Works was cornering the market in Japan, and a British company bought the patent.

With the money from the sale, Toyoda told his son Kiichiro to invest in car manufacturing. Toyota Motor Company was born.

This is an inspiring story, but Harvard Business School professor Amy Edmondson zeroes in on what makes Toyota so innovative, which is how it approaches and manages inevitable errors. In the elder Toyoda’s loom factory, when a warp string accidentally snapped off, the machine instantly stopped until a person could fix the problem.

This “jidoka,” loosely translated into “automation with a human touch,” primarily was meant to conserve precious raw material (thread), but it morphed into the so-called Andon Cord in the younger Toyoda’s car factory. On the assembly line, if anyone sees or even senses a problem, they immediately pull a cord to warn others. Most of the time, the problem is quickly addressed, but if not, the line stops until it is fixed.

“Although elegant and practical, the Andron Cord, for me, embodies simple leadership wisdom,” says Edmondson in her book “The Right Kind of Wrong.”

“It conveys the message ‘We want to hear from you.’ ‘You’ refers to those closest to the work—those best positioned to judge its quality. Not only are employees not reprimanded or punished for reporting error, they are thanked and recognized for their observation.

This may explain how it’s possible for someone to be pulling an Andon Cord every few seconds in one of Toyota’s many worldwide factories. It also explains how quality improvements continued to accumulate, ultimately turning the tiny Japanese loom company into a global automotive powerhouse.

“The genius of the Andon Cord lies both in how it functions as a quality-control device to prevent defects and in its embodiment of two essential facets of error management: catching small mistakes before they compound into substantial failures; and blameless reporting, which plays a vital role in ensuring safety in high-risk environments.

This culture is so ingrained in the company that in 1989, when American manager James Wiseman joined a Toyota plant in Georgetown, Kentucky, he was humbled by what he experienced. The plant was managed by Fujio Cho, who would later become the company’s global chair.

Normalizing failure

At a meeting, Wiseman reported his accomplishments, even “bragging a little.”

“After two or three minutes, I sat down,” says Wiseman. “And Mr. Cho kind of looked at me. I could see he was puzzled. He said, ‘Jim-san. We all know you are a good manager, otherwise we would not have hired you. But please talk to us about your problems so we can work on them together.’”

In our social media-saturated world, where presenting ourselves in the best light is the norm, how can learning from mistakes occur? If perceived successes—even fake ones—are glorified, how can we grow as individuals, as businesses, as a society?

“What I love most about this story is that Wiseman’s boasting would not have raised an eyebrow in 99 percent of work environments I’ve studied,” says Edmondson.

“We are socialized to share accomplishments and good news in front of the boss. Nothing puzzling about it! [But] the most impressive result [in Toyota] is that the system normalizes failure—bad news, requests for help, and problems alike. It creates a community of scientists. The essence of failing well is thinking like a scientist.”

Scientific thinking is not stereotyped for nerds. Edmondson argues that it should be practiced in business, in school, at home. Problem-solving, testing hypotheses, assessing areas for improvement, learning from intelligent failures—these are essential for any enterprise.

Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at Lazada or Shopee, or the ebook at Amazon, Google Play, Apple iBooks. Contact the author at [email protected].