RIP NUMMI & Elevator Pitches

NUMMI, deconstructed
Catching up on podcasts of “This American Life,” the weekly public radio program, I finally listened to an episode from last March about the NUMMI car plant in Fremont, California. It’s a fascinating piece of reporting by NPR automotive correspondent Frank Langfitt, who spoke to plant workers and managers at every level of the project.

New United Motor Manufacturing, Inc. was developed jointly by General Motors and Toyota in 1984. The NUMMI vision was that Toyota would share with GM the production secrets that resulted in higher quality cars at lower costs, and GM would teach Toyota how to operate from a US base, which would help the company reduce import fees.

“This American Life” devotes the entire hour of the episode to detailing the transformation of a plant that had had one of the worst reputations in country, and the subsequent dismantling of the program 16 years later. The plant closed earlier this year.

NUMMI worked, but its lessons proved nearly impossible to transfer. Teamwork and trust couldn’t be rolled out to other GM plants. Workers and managers at other GM plants were resistant to changes that would do away with seniority and executive parking spots.

Jeffrey Liker, author of “The Toyota Way,” (McGraw-Hill, 2003), says that GM couldn’t figure out how to absorb company-wide the positive cultural lessons it was learning in Freemont.

“I remember one of the GM managers was ordered from a very senior level, a vice-president, to make a GM plant look like NUMMI,” says Liker in the radio story. “He said, ‘I want you to go there with cameras, and take a picture of every square inch, and whatever you take a picture of, I want it to look like that in our plant. There should be no excuse for why we’re different than NUMMI, why our quality is lower, why our productivity isn’t as high, because you’re going to copy everything you see.’ Immediately this guy knew that was crazy. We can’t copy and play motivation, we can’t copy good relationships between the union and management. That’s not something you can copy. You can’t take a photograph of it.”

John Shook, an American who was hired by Toyota to work on the Toyota side of the NUMMI venture, is one of the voices in the story. His piece “How to Change a Culture: Lessons From NUMMI” appeared in MIT SMR earlier this year.

Recent podcasts of “This American Life” can be downloaded for free at iTunes or the show’s website. Older episodes cost $0.99.

MIT’s elevator pitch on “This American Life”
The July 16 episode of “This American Life” was about people’s pursuit of a “Million Dollar Idea.” The 58-minute program’s central story is about an obsessive (who later turns scam artist) who figured out how to win on the TV game show Press Your Luck.

But the episode also has a blip about MIT’s elevator pitch contest — what you’d say to an investor if you ran into him or her in an elevator and had only 60 seconds to make your business case.

Actual opportunities usually go more like this, explains Tim Rowe of the Cambridge Innovation Center: “You’re walking through the halls at a, say, MIT, and you see a professor there and the professor is standing there with a visitor, and the visitor turns out to be a famous venture capitalist, right? And the professor turns to you and says, ‘oh, Joe, this is so-and-so, he’s looking around for interesting things to invest in.’ And this is your moment.”

“This American Life” host Ira Glass interrupts at this point to ask if Rowe has actually seen this happen. Rowe answers: “This happens literally every day in Cambridge, Massachusetts. There are probably a hundred venture capitalists circling, looking for the next thing to invest in.”

The next elevator pitch contest will be held in October. The 2009 winners are posted online.