The funny thing about Tesla’s bubble valuation is that you can see that this company is very poorly managed. Musk tells himself that since Tesla’s stock price is high, that he must be doing something right. Well, Bernie Madoff made the same argument for decades until it all caught up with him.
JD Powers ranked Tesla dead last in their latest quality survey. And they were last by a lot. This isn’t surprising considering the myriad of horror stories which abound regarding peeling paint, broken suspensions, and roofs which fly off etc. It is said on Tesla forums that the New-Tesla-Owner right of passage is their first flatbed tow.
When you compare Tesla to a company like Toyota, you start to see some of why these problems persist. And it’s a problem which stems from Musk himself. He’s created a culture which values speed over quality. Tesla’s quality issues will exist as long as Musk is running the show.
The Toyota Way
While I was working at the Batesville Casket Company, I was steeped in a culture that valued both quality and meeting delivery deadlines. If a family received a casket that had a quality problem, we couldn’t tell them to postpone the funeral until next week until we shipped them a new one.
Our executive vice-president of operations brought in a former Toyota manufacturing executive to speak to us about how to instill a culture which is obsessive about quality and doing things right the first time. It was a talk which I’ll never forget and I still think about at times, even to this day. One of the things that he stressed was this. Toyota empowered all employees, down to the lowliest hourly worker, with the power to stop the production line to focus on a problem area.
The mindset at Toyota was that, even as expensive as it was to the company to stop a production line, the consequences of not stopping it were even worse. The rework costs and damage to the corporate reputation outweighed the short-term hit in stopping production. But employees are reluctant to push the red stop button. They have to get the message from the very top that it’s okay and the message has to be repeated regularly.
The Tesla Way
The Tesla way is to ignore “stupid meetings” and solve problems your own way. Musk has empowered people to ignore rules if they see a way to increase productivity or solve a problem. Everyone loves to repeat these parts of Musk’s philosophy but no one ever defines what Musk is referring to as “stupid”.
I’ve worked in manufacturing for over 25 years and I’ll tell you right now who some of the most unpopular people in a manufacturing plant are. It’s the quality engineers. Quality rules and policies permeate all parts of manufacturing and production managers are often the first to bring up the loss in speed which they entail. They hate waiting for quality batches to be evaluated. They hate stopping for the quality audits. They advocate for larger quality tolerances. And on and one it goes. The simple fact is that high quality will slow down production. That’s part of why high quality products cost more.
So when Musk is rallying troops at the end of the quarter to “pull out all the stops” to get as many cars out the door as possible, what is he really saying? When you combine this with Musk’s mandate that employees can ignore “stupid rules” or walk out of unproductive meetings it’s a recipe for disaster.
Tesla’s Message to Employees Is the Opposite of Toyota’s
No one seems to ask why people in a manufacturing plant have meetings. There are two main reasons manufacturing personnel meet.
I suppose if your only goal is to get X number of units out the door, you might see these meetings as a waste of time. But they are necessary. Most manufacturing rules are to ensure quality and the meetings are to attack problems.
The message from Toyota’s top management to all employees is that they have the power to stop production to attack problems. The message from Tesla’s top management to all employees is that they have the power to ignore rules and meetings to keep production going. They are 180 degree opposite messages.
Toyota reassures employees that it’s okay to stop all production in order to force a meeting. Tesla tells all employees it’s okay to ignore meetings in order to keep production going. The problem at Tesla is at the top. There is no amount of money that will fix this problem. Since it’s not going to change in the foreseeable future, I would never purchase a product produced in this kind of environment. Especially towards the end of a quarter.
When you compare Tesla to a company like Toyota, you start to see some of why these problems persist. And it’s a problem which stems from Musk himself. He’s created a culture which values speed over quality. Tesla’s quality issues will exist as long as Musk is running the show.
The Toyota Way
While I was working at the Batesville Casket Company, I was steeped in a culture that valued both quality and meeting delivery deadlines. If a family received a casket that had a quality problem, we couldn’t tell them to postpone the funeral until next week until we shipped them a new one.
Our executive vice-president of operations brought in a former Toyota manufacturing executive to speak to us about how to instill a culture which is obsessive about quality and doing things right the first time. It was a talk which I’ll never forget and I still think about at times, even to this day. One of the things that he stressed was this. Toyota empowered all employees, down to the lowliest hourly worker, with the power to stop the production line to focus on a problem area.
The mindset at Toyota was that, even as expensive as it was to the company to stop a production line, the consequences of not stopping it were even worse. The rework costs and damage to the corporate reputation outweighed the short-term hit in stopping production. But employees are reluctant to push the red stop button. They have to get the message from the very top that it’s okay and the message has to be repeated regularly.
The Tesla Way
The Tesla way is to ignore “stupid meetings” and solve problems your own way. Musk has empowered people to ignore rules if they see a way to increase productivity or solve a problem. Everyone loves to repeat these parts of Musk’s philosophy but no one ever defines what Musk is referring to as “stupid”.
I’ve worked in manufacturing for over 25 years and I’ll tell you right now who some of the most unpopular people in a manufacturing plant are. It’s the quality engineers. Quality rules and policies permeate all parts of manufacturing and production managers are often the first to bring up the loss in speed which they entail. They hate waiting for quality batches to be evaluated. They hate stopping for the quality audits. They advocate for larger quality tolerances. And on and one it goes. The simple fact is that high quality will slow down production. That’s part of why high quality products cost more.
So when Musk is rallying troops at the end of the quarter to “pull out all the stops” to get as many cars out the door as possible, what is he really saying? When you combine this with Musk’s mandate that employees can ignore “stupid rules” or walk out of unproductive meetings it’s a recipe for disaster.
Tesla’s Message to Employees Is the Opposite of Toyota’s
No one seems to ask why people in a manufacturing plant have meetings. There are two main reasons manufacturing personnel meet.
- To review previous performance vs the goal.
- To solve quality problems
I suppose if your only goal is to get X number of units out the door, you might see these meetings as a waste of time. But they are necessary. Most manufacturing rules are to ensure quality and the meetings are to attack problems.
The message from Toyota’s top management to all employees is that they have the power to stop production to attack problems. The message from Tesla’s top management to all employees is that they have the power to ignore rules and meetings to keep production going. They are 180 degree opposite messages.
Toyota reassures employees that it’s okay to stop all production in order to force a meeting. Tesla tells all employees it’s okay to ignore meetings in order to keep production going. The problem at Tesla is at the top. There is no amount of money that will fix this problem. Since it’s not going to change in the foreseeable future, I would never purchase a product produced in this kind of environment. Especially towards the end of a quarter.
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