Sacred Values, Organizational Hypocrisy and Innovation

I recently read a Cutter Edge email (if you are not familiar with Cutter go check them out) that I thought was very interesting. In case you haven't been keeping up with the news Toyota recently passed Ford in the list of World's Biggest Auto Makers. They are also putting focus on GM and trying to get to the number one spot. The Toyota Lexus brand recently took the top spot in 11 of 19 vehicle categories. The reason that Robert Charette wrote the Edge article is not all of these wonderful accomplishments but rather, what they are doing in response to a challenge.

Toyota has recently had some quality problems manifesting in an increase in recalls. The company has a choice with their recent success to continue to press on and work through these issues as time allows or to slow down and put focus on ensuring they are addressed. Given that they have come so far and are so close to their goals it has to be tempting to say that these are just short term problems and to press on as most any successful, large sized company would and even the public markets would expect.

But they are not. Toyota has given an apology for the problems and stated "There can be no growth without quality improvements." They have even assigned executive VP Akio Toyoda, grandson of the company's founder to be responsible for quality improvements. As part of their drive to increase quality Toyota has started several initiatives ranging from adding systems to track repairs to cars even after the warranty expires to hiring more engineers.

You read that right, in this age of continuing layoffs they are hiring more engineers.

As the company grew they added new systems, CAD tools, that would increase engineer productivity and reduce the number of physical prototypes needed. Toyota is recognized as the creator of Lean processes and manufacturing (and it is interesting to note that the problems are not in manufacturing, but in Engineering) However, there are limiters to what tools can do and with the increase in the number of initiatives this meant fewer eyes were cast on each design and "boneheaded mistakes" found their way through the system.

Robert discusses these items in the context of corporate risk management but also mentions Sacred Values and Organizational Hypocrisy. These are when a company says that something is important to it and then does not act like it in reality.

I am encouraged by the fact that companies are having new and creative programs such as Hack Day and other things currently under way in companies. To me this shows that at least some companes take innovation seriously. The question though is, do we take it seriously enough? Many of us are already working well over 40 hours a week on projects and problems that have been funded. Finding the time (and energy) to be transformationally innovative, not just iteratively innovative is hard to do and rarely encouraged.

The real proof will be when something difficult happens. Innovation is, by it's very nature, disruptive. Especially in large companies with business to protect. Read a recent blog post on how "Survival is the Mother of Invention" on the difficulties IBM went through for a very real example.