I have read Buickmans Return to Greatness previously and thought it had quite a bit of merit to it that GM would have been, and still would be, wise to examine carefully.
Yes I appreciate what Ming says about product, but I think that to understand how Return to Greatness and improved product could best co-exist you need to have a deeper understanding of the Japanese philosophy of 'Kaizen' which most westerners interpret as 'continuous improvement'. But westerners misunderstand it.
Buickman unwittingly uses a more Japanese Kaizen in his methodology than any GM exec would have understood, and it is where Ming doesn't quite get the value of Return to Greatness either.
Kaizen does not just mean 'continuous improvement' and especially not the way westerners interpret improvement. We in the west like obviously new things, so new that they indeed embody an element of transitory newness that is called 'fashion'. There is no room for 'fashion' in Japanese Kaizen because Kaizen in addition to continuous improvement involves another opposing element often overlooked and referred to as 'standardisation and elimination of waste'.
Most westerners overlook this as they simply think that it means that it is cheaper to horizontally standardise components in an automaker so that many different models use the same subsystems or component sets and that those components are less economically wasted when delivered just-in-time, which is a side product of Kaizen philosophy. But this misses the point altogether and misses why Toyota is so profitable.
The Kaizen element of 'standardization and elimination of waste' is not just horizontal integrated into the company across products but is vertically applied over time as well and is an opposing force to the other Kaizen element of 'continuous improvement'.
Like Yin and Yang, Kaizen is all about forces to continuously improve a product struggling with forces to resist changing the product over time. To improve the product makes it more appealing and suitable to the market place, but to keep the product unchanged makes it cheaper and cheaper to produce as fixed costs are amortised over time.
So Buickman needs to struggle with Ming and the net result should be a Toyota style profitability.
As an aside it has been interesting to note Toyota being criticized for reducing their production capability for batteries for the Prius and also for letting the Corolla languish without recent updates. But if Toyota foresaw the current market situation happening then their principles of Kaizen would require them to artificially provide an excuse for not making more Prius' which they do not make good profit on which under Kaizen is somewhat wasteful.
It would also mean they should hold off on spending money on Corolla. Why? Because a car you make unchanged for six years nearly doubles the profit on fixed costs of a car that you amortise over three years. Even if demand is lower for Corolla than it could be because it is a little outdated, better to sell a well amortised version in a market clamouring for smaller cars than to sell more of a car that is needing to first pay off it’s fixed development costs.
And you will sell more high profit margin older design Corollas if you make a much more appealing small profit vehicle like Prius conveniently not as available so as to compete with a surge in small car sales that you can direct to the highly profitable Corolla. Toyota is well served by their Kaizen philosophy, even if it does not produce the best cars in the world, but it makes for the most profitable cars in the world.
PS. By 'old' Corolla I mean not really modernised like their competitors. Just the old model regurgitated under a re-skin.
