Notes on Japan & Toyota – No. 1

The Toyota recall of over 8 million vehicles in the USA has gripped the news cycle over the last several days. The testimony of Akio Toyoda, President of Toyota, before a committee of the US House of Representatives made for better than average testimony television. As I watched it I thought how different he was from the tobacco executives who claimed that tobacco did not cause cancer or the recent Wall Street executives who plead ignorance of their own operations. It has made me reflect on what I know about Japan and Japan’s influence on knowledge management and some widely held beliefs about the importance of culture and how it impacts behavior in organizations.

I’ve been going to Japan for the past 20 years. I’ve got sort of a love/hate relationship with Japan. Its very interesting and very frustrating. I’ve worked and lived in Tokyo twice for a few months each time and for years spent several weeks there each year on flying working visits. I’ve travelled quite a bit over the main island and up to Hokkaido for work and pleasure. I lived in the town next to Toyota in Aichi prefecture from October 2007 until June 2008 attending the Yamasa Institute also known as the Aichi Center for Japanese Language Studies. Okazaki and Toyota are on the outer reaches of the Nagoya suburbs. Okazaki has the family castle for the Tokagawa’s, the shogun, who ruled in the emperors’ name until the Meji restoration. As its name suggests, Toyota is the ultimate company town. It’s quite nice but a bit utilitarian. There is a good museum about Toyota and some very nice public sports facilities. In 1959 the town of Koromo was renamed to Toyota. I was told by my host Japanese family that Toyota bought the city’s name but maybe that was an exaggeration. My host family also said that all of the Toyota directors lived in Okazaki because it was so much nicer than Toyota. As you can see, it seems there is some rivalry between Okazaki and Toyota. Okazaki is a rather nicer small city than Toyota with the castle and a river lined with cherry trees running through it.

This is the Japan’s industrial heartland and has not suffered visibly from the ‘lost decade‘. Personally, Japan has never seemed that lost to me. As can be expected, many people work for Toyota and its suppliers in the area. When I spoke in my slow and halting Japanese to people about the Toyota company it frequently seemed to me that there was quite a lot of resentment about the company. It was too big. It expected too much from its employees. During my time there 1 Toyota employee in his 30’s died from ‘death by overwork’ or ‘karoushi’, ‘かろうし’, ‘過労死’. That modern Japanese has invented a word for this kind of death has always stuck me as rather alarming. The company paid the family some compensation. The karoushi and the compensation were not considered unusual. At the same time, people admired Toyota’s success and the roads were full of Toyota cars. The Prius hybrid was rather a menace for students like me on bicycle because they are so quiet they easily sneak-up on a panting bicyclist. I knew one Toyota employee thru a conversation club who seemed happy enough but said he worked too much. I remember him rushing in to our meetings from a Saturday morning quality circle meeting.

So what does any of this have to do with knowledge management? Many of the seminal knowledge management ideas from the 80’s and 90’s were highly influenced by Japan’s success and the alarm from the west over what was making this small country so successful. In the 80’s western electronic corporation were being surpassed by Japan’s Sony, Toshiba and Hitachi. One of my favorite lines from a now forgotten Hollywood movie was the answer to this question, ‘How can I understand America?’ — ‘Remember good cheap Japanese electronics’. Detroit ignored the threat and payed dearly 20 years later as their market share was overtaken by Toyota, Honda, Nissan and Subaru. In 1995 Ikujiro Nonaka and Hirotaka Takeuchi published “The knowledge creating company: how Japanese companies create the dynamics of innovation.” In 1998 Thomas Davenport and Laurence Prusack published “Working knowledge: how organizations manage what they know.” In 1998 Hirotaka Takeuchi published a paper “Beyond Knowledge Management: Lessons from Japan.” He emphasized that the western idea on knowledge management put far too much emphasis on management of explicit knowledge and failed to recognize the fundamental difference between Japanese and western concepts on workers, knowledge and how together they create real innovation. Dave Snowden began developing the Cynefin (kun-ev’in) sense-making and decision-making framework in 1999. Dave Snowden likes to say Nonaka’s SECI model was the model that launched a thousand failed knowledge management systems. This is undoubtedly true. The world is now littered with knowledge bases that are seldom used because it is too difficult to find anything and there is little trust in the found knowledge. However, I agree with Hirotaka Takeuchi that people misunderstood what he and Nonaka were writing about and spent way too much time on explicit knowledge management. This happened in both Japan and western countries. I’ve blogged about this here.

Japan remains among the most innovative and knowledge friendly cultures in the industrialized world. Its largest carmaker has just suffered a brutal blow to its reputation because of poor manufacturing quality and poor knowledge coordination about the problem inside the company and externally with parts suppliers and governmental regulators. What went wrong and what does it say about how Toyota uses its knowledge and reacts to a crisis? Was it a failure of the Toyota Way? Was it because Toyota grew too fast and too large and what does this tells us about sustainability for very large global companies? Does it tell us that the Japanese manufacturing approach cannot be exported abroad? Does it tell us something about how Japanese culture uses and shares knowledge? What does it tell us about how the Japanese respond to a crises on a organizational and an individual level? I’m going to blog about these issues over the next few weeks.



  1. Very interesting article !

    I must say that I’m surprised and disappointed that Toyota messed up this bad.

    Maybe Toyota (and other Japanese companies) aren’t that much different from western companies; except that they work 16 hours a day (6 effective) compared to 8 hours a day (3 effective) for western companies 😉 ?

  2. David said

    I will look forward to your thoughts in follow up blogs. I have no special insight into Japan or Toyota, and I wonder what this issue will tell us about ‘knowledge management’ and the culture of the organisation. Many organisations make mistakes, however for obvious reasons a mistake in car manufacturer has no margin for error. Toyota may have failed in some way in their knowledge management practices however it is still possible that they remain far advanced over other organisations and it will be interesting to see how they deal with the issue, recover and hopefully improve. Personally, although I have little interest in cars, I’d still buy a Toyota. I dont believe in perfection and any company that will do a global recall to address faulty components gets a tick from me. I’d like to know how readily they responded to the issues and was there a culture of denial when the issues first arose..

  3. Baoman said

    I continued this post during my Cognitive Edge guest blog in April,

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