Toyota's Success

Stable and paranoid, systematic

and experimental, formal and frank:

The success of Toyota, a pathbreaking six-year study

reveals, is due as much to its ability to embrace

contradictions like these as to its manufacturing prowess.

The

Contradictions

That Drive Toyota’s Success

by Hirotaka Takeuchi, Emi Osono, and Norihiko Shimizu

NO EXECUTIVE NEEDS convincing that Toyota

Motor Corporation has become one of the

world’s greatest companies because of the

Toyota Production System (TPS). The unorthodox manufacturing system enables the

Japanese giant to make the planet’s best automobiles at the lowest cost and to develop

new products quickly. Not only have Toyota’s

rivals such as Chrysler, Daimler, Ford, Honda,

and General Motors developed TPS-like systems, organizations such as hospitals and

96 Harvard Business Review

1237 Takeuchi.indd 96

|

June 2008

|

Koren Shadmi

N

hbr.org

5/1/08 8:46:37 PM

1237

1237 Takeuchi.indd 97

5/1/08 8:46:47 PM

The Contradictions That Drive Toyota’s Success

postal services also have adopted its underlying rules, tools,

and conventions to become more efficient. An industry of

lean-manufacturing experts have extolled the virtues of TPS

so often and with so much conviction that managers believe

its role in Toyota’s success to be one of the few enduring truths

in an otherwise murky world.

Like many beliefs about Toyota, however, this doesn’t serve

executives well. It’s a half-truth, and half-truths are dangerous.

We studied Toyota for six years, during which time we visited

facilities in 11 countries, attended numerous company meetings and events, and analyzed internal documents. We also

conducted 220 interviews with former and existing Toyota employees, ranging from shop-floor workers to Toyota’s president,

Katsuaki Watanabe. Our research shows that TPS is necessary

but is by no means sufficient to account for Toyota’s success.

Quite simply, TPS is a “hard” innovation that...