Management mistake

We often hear statements like “the operator’s mistake is not the root cause.” But why do we only focus on the operator’s mistake? We tend to avoid discussing management’s mistakes or act as if those mistakes don’t exist. Just because we don’t acknowledge them doesn't mean they’re not there. In reality, there are many examples. Yet, these mistakes pretend they didn’t happen; instead, we blame others—“Oh, the market,” or “the government,” etc. Despite spending millions of dollars and hours on market research and other ‘strategic’ activities, when managerial mistakes or performance issues occur, we act as if that research didn’t exist. They don’t want to admit that all the time we spent in the meetings was completely wasted.

It’s interesting that Taiichi Ohno’s “Workplace Management” begins with a few chapters about management mistakes. He starts by acknowledging that managers make errors. He even mentions that, since managers are human, half of what we do is wrong. When a manager makes a mistake, he stresses the importance of admitting it without protest. We should honestly admit the mistake.

Kusunoki, a student of Ohno who later led the TPS, shares an interesting story. He said that almost every day, Ohno tries something that causes downtime on the production line. In the end, Ohno says he is finished for the day. The next day, Kusunoki asks, “Was yesterday a failure?” Ohno quietly nods or says, “Yes.” In other words, it took Ohno a day to admit his mistakes.

What’s remarkable is that Ohno is still experimenting after 20 years of developing the Toyota Production System. Kusunoki joined Ohno’s team in the seventies. Therefore, the conversations above could only happen after twenty years of trial and error. Ohno had been making mistakes for two decades, yet senior management accepted his actions. And Ohno still had things to try.

There’s another important point to remember. Admitting mistakes doesn’t mean giving up. Ohno is making a trial, which shows he has problems to solve. Just because one solution didn’t work, it doesn’t mean it’s time to quit. What’s needed is to understand why this attempt failed at the Genba. There will be honest self-reflection without blaming others. Admitting ‘failure’ involves serious reflection and learning from it.

When we think about Ohno’s tolerance for mistakes, we shouldn’t just attribute it to his challenging mindset. It’s impressive, but if that’s the only reason, it would be hard to replicate.

One point is that Ohno emphasizes cost reduction. Cost reduction serves as a strong safeguard against management mistakes. The higher the costs, the more likely they are to be risky. This explains why lower-cost decisions are delegated. Unfortunately, many do not see cost reduction as a defense against management errors. That’s why managers tend to consider cutting costs only when they are in trouble. By the time they realize they need to reduce costs, it is usually too late.

Kaizen is also similar. To lower costs, there are many options—various ways to reduce expenses. However, when we use money, it results in higher fixed costs. If that solution doesn’t deliver the expected results, it hurts profitability. So, why not try a solution that doesn’t cost anything? Even if the impact is small, achieving results should make it the first option to try. For managers, the value of an organization practicing Kaizen is significant. It’s not just about lower costs; Kaizen is also the best defense against management errors.

Reducing lead time, improving flexibility, and lowering inventory all mean using less working capital. The characteristics provided by the Toyota Production System are the best defense against issues. Therefore, it is important for management to ensure they can rely on these characteristics.

If someone claims they don’t make mistakes, that's a lie. To some extent, we tend to favor those who are overconfident. However, humility has its value. Instead of chasing the image of being a perfect manager, being a humble person is more realistic. The Toyota Production System creates freedom of managerial actions—not free time to relax, but the ability to lead in this complex world.