culture paper

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WINTER 2010

V O L . 5 1 N O. 2

John Shook

How to Change a Culture:
Lessons From NUMMI

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REPRINT NUMBER 51211

M A N A G I N G C O R P O R AT E C U LT U R E

How to Change a Culture: Lessons
From NUMMI

GM and Toyota launched their joint auto plant where GM’s work force had been at its worst. Here’s what happened next. And why.
BY JOHN SHOOK

IN SPRING 2010, New United Motor Manufacturing Inc., the famed joint venture experiment by
Toyota Motor Corp. and General Motors Co., will close its doors. As someone who was there at its launch and witnessed a striking story of phenomenal company culture reinvention, I am often asked:
“What did you really do to change the culture at NUMMI so dramatically, so quickly?”
I could answer the question from high altitude by simply saying, “We instituted the Toyota production and management systems.” But in the end that doesn’t explain much. A better way to answer is to describe more specifically what we actually did that resulted in turning the once dysfunctional disaster —
GM’s Fremont, California, plant — into a model manufacturing plant with the very same workers.
SLOANREVIEW.MIT.EDU

THE LEADING
QUESTION

How can managers change the culture of their organization? FINDINGS
Start by changing what people do rather than how they think.
”It’s easier to act your way to a new way of thinking than to think your way to a new way of acting.”
Give employees the means by which they can successfully do their jobs.
Recognize that the way that problems are treated reflects your corporate culture. WINTER 2010 MIT SLOAN MANAGEMENT REVIEW 63

M A N A G I N G C O R P O R AT E C U LT U R E

And describing what we did, and what worked so profoundly, says some interesting things about what “culture” is in the first place.

Backstory: Why NUMMI Began, and How It Fared
Toyota hired me in late 1983 to work on the Toyota side of its new venture with GM. I was assigned to a newly formed group at the company’s Toyota City headquarters in Japan to develop and deliver training programs to support its impending overseas expansion. All of this was just happening. NUMMI didn’t even have a name yet. The agreement with the United Auto Workers union was yet to be signed.
There weren’t yet any employees of NUMMI, nor even any managers. NUMMI wasn’t successful; it wasn’t famous. It was just a dream.
Why was the joint venture attempted? GM, for its part, had a few very tangible business objectives that it thought NUMMI could address. It didn’t know how to make a small car profitably. It wanted to put an idle plant and work force back on line. And, of perhaps less importance at the time, but still acknowledged, it had heard a little about Toyota’s production system, and
NUMMI would provide the chance to see it up close and personal; NUMMI would be a chance to learn.
On the other side of the fence, Toyota faced pressure to produce vehicles in the United States. It was already trailing Honda Motor Co. Ltd. and Nissan
Motor Co., which were by then building cars in
Ohio and Tennessee, respectively. Toyota could have just chosen to go it alone, which would have been quicker and simpler. But Toyota’s aim was to learn, and to learn quickly. What better way than to get started with an existing plant (Fremont), and with a partner helping it navigate unfamiliar waters?
It is important to note, however, that from the beginning, Toyota’s objectives at NUMMI were defined by learning rather than by the kinds of tangible business objectives that typically define a joint venture. And if there’s one thing Toyota knows how to do it is how to learn, especially where learning is most important: down at the operational levels of the company. It was that approach to learning that defined its approach to NUMMI from day 1.
Not surprisingly, NUMMI was an incredible learning opportunity for me…