— 6 min read

Internal communications make the difference

I’m a National Public Radio junkie.

This American Life episodes dominate my podcast library, and Ira Glass’s voice soothes me in a super weird way. Most recently, I was blown away by Episode 561: NUMMI 2015.

At the end of the 1980s, American auto giant General Motors desperately needed Weekdone. For 35 years, GM couldn’t implement a culture of teamwork, feedback, and internal communication, and they failed. In 2010 American taxpayers floated their $50 billion bailout.

This episode was all about the demise and attempted recovery of GM. It began to lose US market share back in the 1960s, and not until 1984 did they make their first real attempt to do something about it. GM formed a partnership with Japanese automaker Toyota, who had steadily been stealing market share from Detroit.

In fact, Toyota and GM jointly opened a car manufacturing plant in California called NUMMI, which stands for New United Motor Manufacturing Incorporated. Toyota would spill all of its trade secrets to GM, and in return GM would help Toyota to learn how to build cars in America and bypass new legislation that restricted foreign auto imports to the US.

In 1984 this sounded like a great plan for both companies. So here we are, 31 years later in 2015. Toyota is the top foreign automaker in the US with 14% of total market share, right behind GM’s 18%. In the 1960s GM had over 50% of market share.

In 2010 US taxpayers bailed out GM for $50 billion. Something went awry for GM. They had Toyota’s biggest secret, but matters only got worse. Why? Because Toyota’s biggest secret was one that GM couldn’ duplicate.

Toyota’s Secret Sauce

In a traditional GM manufacturing plant, labor relations between workers and management was more like war. Motivation was low, absenteeism was high, and the assembly line stopped for no one and no problem. This meant that defective cars were being rolled out of factories by the hundreds.

In the Spring of 1984, GM sent all of its NUMMI employees to Japan to be trained in Toyota’s factories. Culture shock wasn’t the only surprise the blue-collar factory workers experienced. Toyota’s secret sauce wasn’t a special piece of equipment, or unique building material, or a crazy number of workers. It was a concept so basic that it now just sounds like an empty corporate tagline: teamwork.

It’s just teamwork, right?

Workers in Toyota’s factories were divided into teams with leaders who would step in if there was ever a problem. The workers were expected to make suggestions for improvements, and were rewarded when their advice was adopted. They helped each other, and management asked them for feedback, which was not only heard, but implemented.

Also, any worker could stop the assembly line if there was a problem. Toyota almost never turned out a defective car.

Invigorated, the GM employees returned to California with high hopes for NUMMI and their new production ammunition. Within just three months, the cars coming off the line at NUMMI were getting nearly perfect quality ratings, and the cost savings for GM were significant.

It seemed like a no brainer for GM. Start implementing the NUMMI teamwork system throughout all GM factories and declare victory.

But it never happened.

At the factory level, managers couldn’t stomach giving up their authority, workers didn’t want change, they couldn’t imagine a factory where the assembly line could be stopped, and they rioted.

GM underestimated the power of teamwork, employee motivation, and company culture. They dropped the ball on formulating a master plan for rolling out the new system, and by the time they got around to it, it was too late. They stressed quantity over quality, and it killed them.

I don’t have to explain that the lesson in this is that at the core of a company’s success stands its people and their relationships with one another. High levels of internal communication, teamwork, and feedback can make a company great, while an absence of these things can lead to a painful demise.

When I listened to this podcast, I couldn’t help but think, “If only GM had had Weekdone, they could have been the most powerful automaker in the world by now.”

But we will never know. Download Weekdone before it’s too late.