Kiichiro Toyoda

Last week an article was published in The Fifth Estate titled “We are looking for the Henry Ford of Buildings”. In my view that’s the last thing we need, especially now as we emerge from the COVID 19 crisis and start to rebuild our devastated economy in a just and equitable way.

In modernising the industry, I would far prefer a Kiichiro Toyoda than a Henry Ford. Kiichiro Toyoda founded Toyota and laid the foundations for the Toyota Production System which is a an integrated socio-technical system, based on five core principles: continuous improvement; respect for people; process design; developing people and supply chain relationships; and organisational learning.

Toyota transformed the car industry and is widely credited as being the first to understand that technology is most effective when it is used to support and enhance people rather than replace them. He also understood that strong relationships and strategic alliances with supply chain partners lie at the heart of an effective and efficient business.

Toyota challenged the confrontational, risk-shifting and price-cutting business Detroit model of business that had long dominated car manufacturing, which is still all too common in today’s construction industry. The Detroit model of business had its origins in a now obsolete early 20th century school-of-thought called scientific management, developed by the late Frederick Winslow Taylor (March 20, 1856 – March 21, 1915).

Employed by Henry Ford in his factories, scientific management was the basis of dehumanising production-line manufacturing processes and time-and-motion studies that underpinned them.

It was founded in Taylor’s basic mistrust of people and a belief in an individualistic model of success, driven by the power of competition, the division of labour and the constant driving-up of productivity through measurement, monitoring and control of people in the minutest detail.

Ford added to this model by introducing highly specialized machinery and highly mechanised work processes with the aim of eliminating through automation, the need for costly skilled jobs on the production line.

Eventually people rose up and refused to work in such conditions, giving birth to the modern union movement

In Ford’s model of production, the role of people was only to feed and tend his machines. It is especially relevant to today, that Ford was able to persuade people to work in such conditions largely because of the Great Depression when people were desperate for work at any cost, although eventually people rose up and refused to work in such conditions, giving birth to the modern union movement in that industry and around the world.

Rather than praising Fordism, we must avoid the Detroit model of business at all costs. Now more than ever, given the potential human impacts of the Covid-19 crisis, we need to ensure that the adoption of new technologies is not driven by Fordist motives but by improving the industry for the people that have created it and the new young people who will transform it in the future.

We must instead embrace Toyoda’s idea that success depends more on the quality of our relationships than the type of individualistic, self-serving and risk-shifting behaviour that undermines quality and productivity in the construction industry.

Technology is only half the equation and that people’s creative abilities and soft skills are central to success in the future

That’s where we need to focus our energies now… building relationships not shifting risks to the point of least resistance – which is generally where the least resources and expertise to manage those risks will be.

And while it is widely believed that technological innovations will be key to transforming and modernising construction, we must also recognise that the world’s most modernised industries also recognise that technology is only half the equation and that people’s creative abilities and soft skills will be central to success in the future.

We need to manage more than just inputs and outputs if we are to compete in an increasingly globalised and competitive world.

We need to develop a completely different set of skills than we need today and we will need to measure our success differently too. One thing that’s certain is that productivity will only be one metric to measure our success, and that this will largely reflect the jobs the machines will do rather than the messy, unpredictable, unstructured, emotive and creative jobs that humans will do.

It is clear that in the future we will need other measures of business performance based on creativity, emotional intelligence and the types of soft skills (leadership, teamwork, communication, entrepreneurship and the like) that humans excel at and that will remain beyond artificial intelligence.

If we continue to be obsessed with productivity as the sole measure of business and construction industry performance as a whole, then we are heading in the wrong direction. It’s not just the hardware that matters people and relationships matter too!

But this won’t be easy. This will require a new way of thinking based on mutual trust, open and respectful communication, empathy, openness to others’ values and perspectives, shared decision-making and risk taking and a willingness to negotiate fairly and avoid common unethical business practices like bid-shopping.

The timing for construction firms to change is right because emerging digital technologies and advances in manufacturing in construction are undermining traditional top-down business models and approaches to management, by enabling the creation of new supply chain relationships and collaborations which were only dreamt of a decade ago.

How construction companies harness and embrace this opportunity is going to be one of the keys to our future success.

Martin Loosemore is Professor of Construction Management, University of Technology Sydney

Join the Conversation


Your email address will not be published. Required fields are marked *

  1. while most western visitors to Nagoya would firstly plan a visit to the Toyota factory east of the city, right in the centre of town is what I found more fascinating – a museum showing the origins of Toyoda/Toyota – from a tuft of wool – to spinning by hand – to machines – to ever more complex – the sequence was amazing to me – anyone interested in the development of technology would probably also find it interesting

  2. The construction industry has tried to hide for too long and left itself wide open for disruption (they are not alone in this approach, just ask taxi drivers). Let’s hope that this inevitable disruption happens in a positive way rather than in a negative destructive way as we seem to be seeing in many industries with the rise of mega monopolies like Amazon. With every day that passes we seem to be heading closer to a fork in the road…

  3. As the other comment suggests a return to both planned public, social or cooperatively developed rental housing, in addition to more modest and affordable private housing vs. oversized houses designed for families.

    Further. I would politely disagree with:

    ‘The Detroit model of business had its origins in a now obsolete early 20th century school-of-thought called scientific management, developed by the late Frederick Winslow Taylor’

    We may not see large production line manufacturing employing significant numbers of workers (now fewer but with more varied work due to robots and automation?), but it’s not obsolete, and can be found in many service and/or white collar sectors including higher education.

  4. Bang on target Martin.
    We have to bounce forward not back!
    Forward into a housing production model that appears to work in Vienna, Berlin and Zurich – yes state- or city-sponsored Co-operative housing – that delivers a quality housing rental system that is fundamentally equitable and dignified, not commodified and rapacious.
    There is definitely a crisis of under supply of affordable housing in the cities at the moment and everything has to be on the table.
    “There can be no return to normal because normal was the problem in the first place.” Hong Kong graffiti 2020