The Parable Of Managing America’s Automaker Industry

Sometimes being on the outside allows one to see the inside a lot clearer. A good friend/client in Hong Kong recently emailed me the following parable that makes a comparative analysis of American management vs. the Japanese. In this parable, the Japanese are a metaphor for any sensible country that has maintained and preserved its manufacturing base.

I tend to agree with this parable as it highlights a key problem with modern American work ethics and business culture, i.e. too many people want to manage or not work while being paid the highest wages possible even if the management strategy under which they operate is unsustainable and inevitably cannibalizes their respective industry and jobs.

Contrary to Gordon Gekko, greed is not good…

A  Modern Parable:

A Japanese company ( Toyota ) and an American  company (Ford Motors) decided to have a canoe race on the Missouri  River   Both teams practiced long and hard to reach their peak  performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.  A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while no t enough people were rowing.

Not sure of how to utilize that information,  but wanting to prevent another loss to the Japanese, the rowing team’s  management structure was totally reorganized to 4 steering supervisors,  2 area steering superintendents and 1 assistant superintendent steering  manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder.  It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rowers.  There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses.  The pension program was trimmed to ‘equal the competition’ and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted develo pment of a new canoe, sold all the paddles, and canceled all capital investments for new equipment.  The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year’s racing team was out-sourced to India .

Sadly, the End.

Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can’t make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US   The last quarter’s results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses…

IF THIS WEREN’T SO TRUE, IT MIGHT BE FUNNY.

Disclosure: None

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