How to Change Culture - Lessons from NUMMI

Corporate culture can be influenced ("changed" is too strong)  by changing behavior to that leads to thinking differently, enabling people to act their way to new ways of thinking rather than thinking (or being ordered) into a new way acting.  CDR Dana Simon (I have blended his thoughts and mine in this post) sent me an email (my new preferred way to generate blog posts) about the closure of New United Motor Manufacturing Inc. (NUMMI). GM’s decision to pull out of the joint venture will likely lead to the closure of the plant and the end of a fascinating case study of driving culture change. Despite the willingness of Toyota to share its lean production "secrets" with GM, today GM cars still don't have the quality of Japanese imports, GM is bankrupt and NUMMI will be closed. This post provides some perspective on Culture Change.

Background

In 1984, General Motors and Toyota opened NUMMI as a joint venture. Toyota showed GM the secrets of its production system: how it made cars of much higher quality and much lower cost than GM achieved. NUMMI was located at GM’s 88 football field-sized manufacturing facility in Fremont California. This was a counterintuitive choice for the site since the labor relations at Fremont were terrible.

Critical thinkers (or those who aspire to be, it does not happen overnight) might ask themselves a few questions about this situation. Why would Toyota openly reveal is methods for producing high quality cars to a key competitor? What would/did the joint venture teach about the differences between lean manufacturing and traditional mass production? Why have American automobile manufacturers struggled to replicate NUMMI’s success in their other plants? Can American workers produce cars as efficiently as the Japanese? If they can, why aren’t they doing so?

Importance of Culture

Edgar H. Schein, Ph.D., is Professor Emeritus at Massachusetts Institute of Technology, and has written extensively about culture, why it is important, how it is created, and how it is influenced. A definition of culture is that it is what you do informally when you’re not going by the rules.  Even more generally, one could say that culture at some level is the sum total of everything that a group has learned.

Schein suggests that leaders consider one of the key parts of their jobs to be “culture managers” since this gives you a new perspective about the things you should be doing to manage your organization’s or work group’s culture.  He believes it is very useful for people to view many work situations from a cultural perspective.

Groups and organizations have to have consensus about their goals.  How to do things.  How to measure progress.  All of these things eventually become cultural elements. Culture is vast and deep.  It covers everything you do.  So the notion that you’re going to change culture is taking on a very, very big challenge.

Schein points out there are often conflicts between espoused values (what people tell you they believe) and the artifacts you observe in practice. For example, most organizations want people to work in teams effectively, but are very individualist when it comes to performance evaluations and promotions. “We want team work but course we are an individualistic organization.  Of course we want people to compete.”  So you realize what is espoused and what is desired – what people would like to be – is not necessarily what’s driving the organization.

If you don’t try to understand the deeper levels of culture, if you don’t understand what the underlying assumptions are and if you don’t have a mechanism for dealing with those, then you’re only going to be doing superficial programs that are going to be viewed as “the program of the month” and people aren’t really going to be paying attention to it.  What people pay attention to is the tacit, underlying shared assumptions, the informal ways of doing things that they have learned over a long period of time.

Cultures affect both what people expect from one another (often called norms) and what people expect from their dealings with the external environment. Culture creates its own discomfort (disconfirmation), its own blind spots, and its own tolerance or intolerance for discomfort and admitting to blind spots.  Culture encourages organizationally generated mistakes and it also can discourage them.

Culture develops from meetings, what you do to prepare for events, how you are evaluated (by peers and seniors), what is done when problems develop, what you work on, how you spend your time, how you are treated when you do well and when you do not, and how expectations are set and enforced.

How Culture is Changed

Culture is hard, slow, and subject to frequent relapse. Organizations should attempt to change culture only when there is a specific problem to be solved and only when you can work within existing cultural strengths. Imposing culture by fiat is a losing proposition.

Be leery of the term "culture change," but not for the normal reasons. What bothers me about leaders trying to change the culture of an organization is that they seldom a) really mean it, b) recognize their role in supporting the new behaviors that are needed to get people to begin to think differently, and c) are willing to take the time to get their (management's) behavior right and sustain that new behavior (I believe this is why the success at NUMMI was not replicated anywhere else at GM, with the possible exception of Saturn).

Some observations from the NUMMI article that I thought were particularly noteworthy:

… Toyota’s objectives at NUMMI were defined by learning … if there’s one thing Toyota knows how to do it is how to learn, especially …at the operational levels...

… the work force in the old GM Fremont plant was considered to be an extraordinarily “bad” one.

The only thing that changed was the production and management system — and, somehow, the culture. … Schein teaches that culture is hugely important, but … you don’t change the culture by trying to directly change the culture.

Schein proposed that the way to change culture is to change … the observable data of an organization, which include what people do and how they behave. Anyone wanting to change a culture needs to define the actions and behaviors they desire, then design the work processes that are necessary to reinforce those behaviors. It’s easier to act your way to a new way of thinking than to think your way to a new way of acting.

A key Toyota tenet is “Respect for People,” the conviction that all employees have the right to be successful every time they do their job. Part of doing their job is finding problems and making improvements. [Management has] the obligation to provide the means to [find problems and to make improvements].

[What changed NUMMI’s culture was] a promise from management to the work force: “Whenever you have a problem completing your standardized work, your team leader will come to your aid ...” … that is what it takes to enable workers to build in quality and to be engaged in problem solving and making improvements.

What changed the culture was giving employees the means by which they could successfully do their jobs … the NUMMI/Toyota process of making it (1) difficult to make a mistake to begin with; (2) easy to identify a problem or know when a mistake was made; (3) easy in the normal course of doing the work to notify a supervisor of the mistake or problem; and (4) consistent in what would happen next, which is that the supervisor would quickly determine what to do about it.

… the most important and difficult “cultural shift” that has to occur in a lean manufacturing transformation revolves around the entire concept of problems. What is our attitude toward them? How do we think about them? What do we do when we find them? What do we do when someone else finds and exposes one? The andon process is about building in quality by exposing problems. Sometimes those problems are of our own making. Exposing them can be a very personal and threatening matter.

 “No problem is problem.” There are always problems, or issues that require some kind of “countermeasure” or better way to accomplish a given task. And seeing those problems is the crux of the job of the manager.

We can draw parallels from NUMMI that apply to shipyards.  While NUMMI's workforce was much more militant/aggressive, we experience similar resistance to change and fear of the unknown in the yard.  But NUMMI was able to re-invigorate the workforce and increase their quality in one year, largely due to culture change.

Conclusions

Karl Weick, co-author of “Managing the Unexpected,” believes that you should reat culture as an investment in resilience.  Culture gives you a direction, a set of guidelines, and it suggests what to do, even when events begin to worsen. Arm yourself for guerilla warfare.  Mindfulness requires continuous, ongoing activity.  It is not a war that ends in victory since the hazards will not go away.

If you want to make things better in a long-term, sustainable way, first become a culture manager.  Not a culture creator.  You already have cultures at your organization.  Do you need to manage the communication that would occur if you try to work from different cultural perspectives? Second, look for small, everyday ways to reinforce the espoused/desired culture and watch out for actions, especially by those in leadership positions, that send mixed signals to the workforce, like “We value honesty and people finding problems,” but senior leaders “shoot” those messengers of bad news. This might sound obvious and dumb, but it happens all the time. Third, as Weick and Suttcliff note, leaders must be willing to modify what people in the organization expect from one another by way of mindful updating following an audit or information gained through analysis of an unexpected event. People need to feel strongly that it is good to speak up when they make a mistake, good to spot flawed assumptions, good to focus on a persistent operational anomaly. They need to expect praise for these acts when they do them, and they need to offer praise when they spot someone else doing them.

As we continue to increase our awareness in diversity (rightfully so), we need to become "managers of culture" to ensure that the different perspectives, mindsets, preconceived notions, etc., develop into a culture that supports the mission.  This is challenging, but NUMMI was able to successfully blend Japanese and American attitudes about work (mostly by throwing out American attitudes) into a culture of accomplishment and quality.

So the cultural bottom line is really a story about subcultures and how executives can bring those subcultures into alignment and make them work by immediately when you go back, the very next thing you can do is to start talking to your engineers and your hourly people from a position of cultural humility, rather than from a position of “Let’s tell them what to do.”

For Further Reading

  • The Machine That Changed the World, Womack, Jones, Roos
  • “The Toyota Way,” Jeffrey Liker
  • Lean Thinking, Womack
  • Managing the Unexpected, Weick and Sutcliff