Joe and Tetsuro Toyoda

There’s a legendary story from when Tetsuro Toyoda visited the NUMMI factory in Fremont after their joint venture with General Motors. The NUMMI factory was one of GM’s worst factories and Toyota sought to overhaul the culture as part of the joint venture.

A key part of the Toyota Production System or TPS involved pulling the “andon cord” when a worker saw a problem. The “andon cord” was an emergency cord that stopped the entire production line. While it was very expensive to stop the entire line, Toyota had learnt it was far better to fix existing problems early than to ship defective cars.

Source

A month after NUMMI opened, Tetsuro Toyoda (President of Toyota), paid a visit to the new factory. While going through one of the production lines he noticed an employee struggling to install some rear lights on a vehicle. Mr. Toyoda approached the employee, looked at his badge, and said “Joe, please pull the andon cord.“

Joe looked at Mr. Toyoda (and the entire factory executive team behind him) and replied, “I can fix it, sir.”
‘Please Joe.” – Mr Toyoda replied
“I can fix it sir.”

After watching Joe struggle some more while refusing to pull the cord, Mr. Toyoda reached, took Joe’s hand and, together, they pulled the andon cord. A yellow light began to flash and Joe (with his hand shaking) continued to work on the car. Once the car reached the end of Joe’s work area, the production line stopped. Joe finished his work and pulled the andon cord again – the production line return to normal work.

Mr. Toyoda bowed to Joe and began to speak in Japanese. “Joe,” he said, “please forgive me! I’ve done a bad job of communicating to your managers the importance of the andon cord. Only you can make the best cars. I’ll do everything in my power to make sure that I don’t let you down again.”

By noon, the entire factory had heard about it. The Andon cord was reportedly pulled over ten times the next day and an average of 100 per day a month after Mr. Toyoda’s visit. Two years later, NUMMI was producing cars at a quality level on par with Toyota factories in Japan. Absenteeism decreased from 45% to 3% and it became GM’s most productive plant.

I love this story. It beautifully encapsulates lessons on building great products, leadership and culture all at once. It is always better to be obsessive about fixing problems early. We are better off building cultures and organizations where people feel safe admitting and fixing mistakes. And, leaders are the ultimate example of a team’s culture – people watch what they do.

Finally, stories like this go on to inspire a generation of future builders and leaders. Cultures spread through stories like this.

A quick post script note on NUMMI – GM didn’t succeed in replicating NUMMI’s cultural transformation in plants across the company. The joint venture was eventually abandoned in 2010. But, fittingly, it was bought by a South African born entrepreneur who dreamed of building great cars.

Today, the former NUMMI plant is the Tesla factory at Fremont.