A wonderful illustration of the Technology Paradox is the case of the New United Motor Manufacturing Incorporated (NUMMI) venture which began in the mid-1980’s and which ended recently in 2010. The highlights of the case study are that General Motors observed that the Japanese auto manufacturers were out producing American automobile manufacturers with an increased consumer quality rating. Given this situation and the challenges that the American auto industry was experiencing, General Motors had the foresight to propose a joint venture with Toyota to observe Toyota’s development and production practices. The site of the experiment would be in Fremont, California and would incorporate both organizations developing automobiles in two distinct plants that were in close proximity. Toyota would agree to this venture as to also observe U.S. manufacturing processes, and learn how to better market their automobiles to a highly fickle U.S. automobile consumer market. The irony of the story now unfolds very quickly and supports my Technology Paradox argument. Toyota is provided antiquated technology and General Motors is provided cutting-edge technology of the time.
After several months of production cycles, resource and environmental challenges, the executives of both companies observed the aftermath of their socio-technical experiment, which unbeknownst to them would serve as a foundational lesson for years to come in many Harvard Business Review articles and cases. What both parties came to determine, was that Toyota out produced General Motors by several times. This came as quite a surprise to the General Motors’ executives who surely would have expected equal if not slightly better production than their Japanese colleagues who were given an unproven workforce in a foreign environment.
This experiment immediately resulted in detailed discussions and activities focused on determining the primary attributes for the significant success of the Japanese manufacturer. After thorough deliberation and research, the General Motors’ executives realized that the social culture, processes and communication structures of the Toyota manufacturing environment greatly influenced Toyota’s success leading to further introspection into the closely held belief that technology is the most crucial element in an organization’s success.