Business Insight Zone

Little by little, fills the pot
–Swahili proverb

The latest ratings from Consumer Reports show that Ford Motor Company keeps “pull[ing] away from the rest of Detroit” and gaining on Japanese makers like Toyota and Honda in terms of quality and reliability.

Even better, they’re doing it the right way — the Toyota way — by making “small, incremental changes over time.”

We’ve talked many times before about how such a deliberate, methodical approach can improve the performance of both organizations (like the Tampa Bay Rays) and individuals (like Will Smith).

We already know what works

This principle was laid out — in typcially lucid terms — by New Yorker business writer James Surowiecki earlier this year:

The Open Secret of Success

The piece isn’t long; by all means go and read the whole thing when you have a minute. Meanwhile, though, here’s the kernel:

[I]f Toyota doesn’t look like an innovative company it’s only because our definition of innovation — cool new products and technological breakthroughs, by Steve Jobs-like visionaries — is far too narrow. Toyota’s innovations, by contrast, have focussed on process rather than on product, on the factory floor rather than on the showroom. That has made those innovations hard to see. But it hasn’t made them any less powerful. [...]

[O]n the whole, the results are hard to argue with. They’re also phenomenally difficult to duplicate. [...] Toyota’s innovative methods may seem mundane, but their sheer relentlessness defeats many companies. That’s why Toyota can afford to hide in plain sight: it knows the system is easy to understand but hard to follow.

Grinding out the details

As Surowiecki’s colleague Malcolm Gladwell pointed out in this scintillating 2006 lecture [warning: PDF link], the Detroit automakers have succeeded in the past with blockbuster innovations — the GM-style portfolio of brands, the muscle car, the minivan, the SUV.

Meanwhile, Toyota and Honda were spending decades ironing out every little detail of quality, reliability, and durability. In recent years, they’ve also focused on getting hybrid engines — an idea that’s been around for 100 years — to run smoothly at a cost low enough to make them practical for economy cars.

The big trouble is, can you make that [hybrid] engine so that the transition from one motor to the other is seamless? You can’t have an engine that has all kinds of jolts and jumps and stops and starts — it has to feel smooth. Well, working out that feeling of smoothness is incredibly difficult. It takes years and years and years of incredibly painstaking, patient, careful engineering.

The concept extends far beyond the example of the hybrid engine. Detroit has often relied on Big Ideas (the “conceptual” breakthroughs that Gladwell compares to the artistic production of Picasso) at the expense of iterative improvements (the “experimental” or experiential breakthroughs that Gladwell links to the paintings of Cezanne).

BOTH A and B

Gladwell says — and I agree — that it need not be an either-or proposition. We should want both Big Bangs of insight, in the mode of Apple’s iPod, and the incremental innovations represented by Dell’s direct-to-consumer selling model. But when you must choose between the two, the smarter bet over the long haul is improvement by steady increments, as Ford has apparently learned.

I’ll be talking more about Ford soon: following up on my post of a few weeks ago about the company’s plans to make more efficient cars, I got to talk with a couple of the company’s leaders about Ford’s efforts to make its manufacturing operations more sustainable as well. I’ll be writing up my findings from that talk soon.

Meanwhile, kudos to Ford for getting better now AND laying the groundwork to get even better in the future.

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Related items:

• Malcolm Gladwell in The New Yorker: “Late Bloomers.”
• Ford’s Sustainability Focus.
• How to succeed in business: the simple version.
• What does the future hold for the Detroit car makers?

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(Photo by St0rmz, used under a CC-Share Alike license.)