The Toyota Way: Let Failure Be Your Teacher

In the tenth chapter of David Magee’s book “How Toyota Became #1:  Leadership Lessons from the World’s Greatest Car Company,” he talks about the fact that one of the strengths of Toyota is that it has learned to take past failures and turn them into the raw material for future successes.

A lot of the visual and verbal signals on the production line such as the line-stopping andon cord are related to the detection of manufacturing problems.   Rather than being the beginning point of finger-pointing and conflict between individuals, the identification of these problems starts a process where team members focus not on the “who” but the “how”.   In other words, the process of how to solve the problem engages the entire team and takes the focus off of personalities.

1.  Parley Mistakes into Success

The first example of Toyota’s way of learning from its mistakes is the identification by the Center for Auto Safety (CAS) of a major safety defect in its second-generation Camry that was launched in 1989.

An electrical malfunction of the system that powered the windows and door locks prevented doors from being unlocked, even by hand.   After CAS told Toyota officials about the problem and nothing was apparently done in response, they took the story to Consumer Reports, which created a lot of negative publicity.

In response, Toyota recalled 500,000 of the 1989 Camrys.   They improved the quality and engineering of the third-generation Camrys that were launched in 1992, and the episode faded from the public’s memory.    It didn’t fade from Toyota’s memory, however.    They analyzed the problem as being larger than just failing windows and door locks; the reaction to the original identification of the problem by CAS was also inadequate.

As a result of their analysis, it was not just an engineering problem, but a communication problem.   There was poor communication between engineers in Japan, and the  manufacturing managers and sales executives in the United States.   Cross-company communication lines needed to be opened up and feedback from the field was now given the highest priority.

When there was quality problem with the fourth-generation Camry, due to a problem with the car’s side mirrors, there was extensive dialogue between the North American sales team and the manager of Toyota’s Georgetown plant where the Camry was being built.    Although there was mounting pressure from dealers for a timely delivery of the highly anticipated new cars, the decision was made to push back the on-sale date by 60 days in order to replace the defective mirrors on the the 2,000 already-built Camrys.   It was better to address a bad situation aggressively and openly than allow to just allow the situation to continue, which would have resulted in even greater embarrassment for the company.

2.  Make Problems Top Priority



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