There's always room for improvement in your business
No matter how much time and money we spend improving things, we can always do more. I truly believe that.
But there are many people in business who push back on that. They are convinced that everything that can be done to improve their product or process has already been done. After all, if they can't figure it out, how could anyone else?
Examples abound that prove them wrong.
In the late 1980s, a colleague of mine at ITT led a group of U.S. auto executives on a visit to a Toyota assembly plant in Japan so they could witness the vaunted Toyota production system first-hand. The cars came down the assembly line and, as they did, workers attached the doors. After the doors were attached, the cars moved on to assembly of other components.
The executives were confused and asked their Japanese host, through an interpreter, “Where are the door fitters?” The host didn't understand the question and asked for clarification. “Where do you adjust the fit of the doors so they close properly?”
You see, at that time, door fitting was a job in the U.S. Doors didn't fit properly, but it was generally believed that because the doors and frames were made by stamping and welding, the fit couldn't be made any better. So the manufacturers employed door fitters who would use their tools to distort the door until it fit the frame pretty well.
Now it was the host who was confused: “Why would the doors not fit the first time?”
The Toyota production system was the gold standard at that time, and a key element of its success was the concept of continuous improvement. Surely at some time Toyota's stamped and welded doors and frames didn't fit perfectly, but the factory workers and engineers at Toyota had not fallen into the trap of believing they had done enough or done everything that could be done. They kept improving until the doors fit properly the first time.
Later in the tour, the U.S. executives asked when the cars would be tested for water leaks. U.S. cars frequently leaked, so they were sprayed with water to check for leaks that could be repaired.
The tour guide's answer was, “Why would the cars leak?” When your doors fit perfectly the first time, there isn't any reason for a leak.
The U.S. executives learned why Toyota was such a dangerous competitor and why its cars were preferred for their fit and finish. Toyota didn't stop improving when the next improvement looked difficult or even impossible. They kept at it and figured out how to make those doors fit perfectly.
All of us that enjoy the generally great fit, finish and reliability of today's cars owe a debt to the relentless continuous improvement of the Toyota production system, which forced all manufacturers to follow suit or die.
But recent news proves that even Toyota can fall into a rut and be schooled by a competitor.
On March 26, Bloomberg reported that Toyota “will shift half of all the vehicles it makes to new cost-saving platforms by 2020, following a similar move by rival Volkswagen AG.” Toyota has seen its quality slip in recent years, in part due to the complexity of engineering so many components and systems for so many vehicle models. For a long time, they thought they were doing all they could do.
Now Volkswagen is leading the industry in a new direction by dramatically reducing that complexity. By sharing base platforms and components across many models, automakers can reduce the cost of product development, negotiate lower prices for components and reduce the time and cost of setting up assembly lines for new vehicles. The sharing will also make it far easier to use a single assembly line to produce multiple car models rather than requiring a dedicated line for each.
This will be a transformative change in the way automobiles are designed and assembled. Toyota is playing catch-up with Volkswagen. How in the world could that happen?
Things like that happen when we begin to believe that we can't make a substantial difference anymore. We get complacent because we overestimate how smart we are and think if we can't figure it out, no one else can.
I've seen a kind of smug complacency like this many times. People who believe products and processes can't be improved are cousins of the “If it ain't broke, don't fix it” crowd.
It's important for business leaders to avoid these traps. If it ain't broke, break it. If your product or process is “as good as it can be,” challenge your team to keep making it better.
Toyota schooled the U.S. auto industry and now it is being schooled by Volkswagen. Don't give your competitors that chance.
Richard Randall is founder and president of management-consulting firm New Level Advisors in Springettsbury Township, York County. Email him at firstname.lastname@example.org.