Learning from QC Failings at Honda - A QC Leader

Dimitrios Matsoulis

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If we were to describe companies as adventurous or conservative, Honda would definitely fall in the former category. One of company founder Soichiro Honda's favorite mottoes was that success is only 1 percent of the work and the rest is overcoming obstacles. Judging by Honda's rise as an engineering star, we can definitely say that learning from mistakes really works. In all respects, the world's technological leaders have grown and become famous by pushing limits, putting revolutionary concepts to practice and recognizing that effectively dealing with failure is a quick and trusted road to improvement.



The Takata airbag recall, however, completely shook Honda's confidence. A significant number of accidents in 2015 led to many injuries and deaths due to faulty airbags. Since Honda is Takata's most loyal customer, half of the 40 million recalls were Honda cars, tarnishing the brand's image. It was a clear turning point for Honda, and they knew they had to reconsider their definition of failure and their overall strategy. The following points highlight the reasons that Honda failed to respond properly:



Sangen Shugi and Focus Loss


"Sangen Shugi" can be roughly translated into "going to the spot," and is at the heart of Honda's engineering-first strategy. It's about attacking problems at their foundation. Through a firsthand investigation via the "sangen shugi" principle, complexity gets dissected to such a degree that problems can be addressed at their source and wiped away entirely. Clearly, this did not happen with Takata. Honda's trust in Takata airbags led to skipping quality control on the premises that airbags are far too complex and impossible to inspect optically.



Honda's IT Structure


Being at the forefront of product design and manufacturing does not necessarily mean you have a lean manufacturing operation across the board. Disproportionate focus on operations and problematic communication between engineering/manufacturing with other corporate departments like strategic planning, accounting and top management revealed an internal IT problem. As the airbag failures blew out of proportion, management wasn't alerted on time, resulting in a serious delay in their overall response.



Growth and Complacency


Honda's rise as a worldwide automotive leader was meteoric. Growth not only made it complacent but also diluted its internal strengths. The lack of energy and responsiveness in the airbag case highlighted another failure: mismanaging the transfer of company values across all divisions and geographic areas. A worldwide workforce certainly requires extra attention if methodologies successfully used back in Japan are to bear fruit.



Lawsuits and fines are going to continue to tarnish Honda's previously excellent safety record. They must find new ways to put things right with the victims and victims' families, but it also must fundamentally change its strategy by redefining its approach to and analysis of failure -- that lightning rod for motivation so cherished by Soichiro Honda.



Takeaway Lessons


Using failure as a springboard is still a powerful principle, but accepting any failure -- fatal or not -- as the start of an improvement cycle isn't enough to do the trick. Failure manifests itself as a performance shortcoming and a market failure, so it needs to be treated with a preventative, not just a reactive approach.  In your own business, are your departments working in silos or are you able to manage major hurdles smoothly and quickly should they come up?  What supplier relationships or strengths are you resting on, or taking for granted, that might need a second look or re-evaluation?  Our strengths and strong relationships can sometimes be our blind spots so its good to evaluate all aspects of your business consistently over time.