Lessons from NUMMI

 

Blog - Leslie Caccamese - August 27, 2012

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Can Organizational Culture be Changed?

Company culture seems to be the new buzz word, but how many companies will actually see the positive change they are working so hard to create?

For example, Yahoo is currently trying to install some of Google’s culture in an effort to slow down its dissipation. Formerly of Google, the new CEO Marissa Mayer has borrowed a few policies from her previous company, such as a free cafeteria and opening the floor to employee questions.

This experiment in culture grafting has been going on for a while, but there seems to be a consensus that more than half of attempts at changing culture will fail. The reason, according to a massive study on culture change by McKinsey and Co., is negative employee attitudes and unproductive management behavior. What is most interesting about this research is that companies can increase their chance of success by four times by increasing communication, engaging employees, and by getting frontline employees to take ownership of the change the company hopes to achieve.

A while back, I listened to a fascinating story on NPR’s This American Life about NUMMI, a joint venture between GM and Toyota. If you are not already familiar with story, I highly recommend reading the full article at NPR.org.

Essentially, the two companies joined together in an unlikely partnership; the former to learn more about Japanese efficiency, and the latter in hopes of learning how to open plants in the U.S. Initially, the GM plant was rife with absenteeism, negligence, and inappropriate behavior. But after a brief training with Toyota in Japan, these same factory workers came back to the states truly believing in the value of the work they were doing, and going on to run the most efficient plant in GM history.

Why? It’s a pretty simple concept, actually. Trust.

In Japan, workers were trusted to shut down the line if there was a mistake, or if someone was simply feeling ill. In America, GM did not allow workers to shut down the line on their own accord for any reason. This lead to innumerable and costly mistakes, and an even more powerful lack of morale. As an added bonus, the factory in Japan was constantly engaging frontline workers and asking for suggestions on how to improve the line. This resulted in not only a more efficient line, but also a workforce that felt valued for their services.

GM learned from this experiment and tried to replicate it at other plants, but unfortunately it wasn’t as easy as they thought. Management either didn’t trust it would work, or employees didn’t trust management that they were serious about creating real change. Which is really unfortunate.

So how do companies successfully transform their culture? Implementing a few policies simply won’t cut it- it’s deeper than that.

In order to successfully change an organization, you need to build a culture of Trust.

Leslie Caccamese serves as Senior Strategic Marketing Manager with Great Place to Work® Institute

Leslie Caccamese