Toyota : a good example of SOO that reduces business risk


First a quick summary of the Service Oriented Organization concept (SOO) : it’s about giving employees the ability (ie tools and organization model) that allows them to bridge the gap between task they have been assignedJ and thoses that are actually required by their day to day job, assuming that organization reached such an optimum in verticality that deviations, that are more and more frequents) can’t be solved verticaly but by adhoc.

A good example comes from Toyota and its integrated suppliers system. This ecosystem is so optimized that expertises, skills, are often unique. What would happen if a factory, manufacturing a piece used on every vehicle, burn ?

To know the answer, I advise you to read this note from Christophe Faurie [fr], from which I took these quotations :

Without any centrealized coordination, Toyota suppliers jumped at the problem. A kind of brownian movement, rushing about in all directions. In three days they recreated the destroyed manufacturing processes although they have no understanding of the required tool and jobs. Usually, rebuilding a factory and its tools takes more than a year. More surprising ; production is distributed on the whole suppliers econosystem. Sixty of them now manufacture products for Asia, the others taking care of productions that had to be transfered because of that. As a conclusion the whole supplier ecosystem lifted the incident.

What made this miracle possible ?

The very foundation of the “Toyotian” organization, relying on small groups practising problem solving continuously (Hummm….who said that employee’s job now is mainly to solve problems and that collaboration don’t mean anymore to share tasks but to collectively find solutions to sudden problems ?). As the project is self-organizing, no financial consideration comes to disrupt it, which would have been the case if Totoyat had managed it top-down.

As a matter of fact, as Christophe says, the informational overload applied to a hierarchical system swamps managing teams and force employees to shortcut them. The informal networks that result from that have a huge impact on organizational risk management, since they contribute to strengthen the solidity of the organization that doesn’t rely anymore on a few key components but is distributed among all employees.

This reminds me of an article I read in the French magasine “courrier international” which is a digest of the best papers in worldwide press…they reproduced an article written in  brasilian newspaper. The title was : “Al Quaida, an organization model for businesses”.

Imagine a company which structure was designed to resist to any form of attack, which organizational chart would have forgotten hierarchy, whom no office can be considered as headquarters, where information circulates divided into small pieces following different routes. A networked company, built like a fishnet, with interconnected communication nodes…

This company exists. It’s called Al Qaida. If a node is destroyed, information still circulates in a free flow. “Entire parts of the network may give away but the net will still resist. It’s like a description of internet”. An US consultant studyied the network gathering the 19 terrorists of Sept. 11th. After many computations, he came to the conclusion that 21% of the whole organization had to be destroyed to stop their fatal project. It’s a considerable number since “we know that in a traditional hierarchical organization, targeting at only 5% is enough to get to the same result”. Promon, one of the biggest brazilian IT companies “is strongly thinking about adopting Al Qaida’s organization model to restructure itself”. Managing communication but also security : as a matter of fact “this net is nearly undestroyable”, above all when “trust and share convictions exist within this organization”.

Conclusion : in order to reduce risk and improve organization performance, the hierarchical model that gives very few autonomy to its members and uses mandatory communication channels is the worst thing ever.

One more thing : what’s interesting in Toyota’s model, is the high level involvement of its suppliers, which proves that companies are not in a walled garden anymore and that, instead of building walls, they should be wide open to thei ecosystem. It’s also the proof that an organization model focused on partnership rather than internal hypertrophy is efficient. Tomorrow’s companies will not hide behing walls but will be a part of a stakeholders ecosystem.