2010
Lessons from Toyota
For the past few decades, people around the world have flocked to Toyota plants to study their greatly admired quality processes. Now the tables are turned, and people are beginning to study Toyota to understand just the opposite—what went wrong?
As I read the newspapers and listen to stories about Toyota on NPR, I filter these analyses through the framework that my co-authors and I are using as we write The Worthiness Era. We use five separate criteria for quantifying the “worthiness” of companies.
Based on the currently available evidence, my hypothesis is that despite all of the public accolades, Toyota has had serious (and heretofore largely unexposed) deficiencies on three of the criteria: worthy employer, customer focus, and (absence of) greed.
I’ve used our People Index® to help me think through how Toyota measures up on the first category, worthy employer. The facts strongly suggest that Toyota has had serious deficiencies in multiple areas:
- Working conditions (too much focus on cost cutting and too little focus on responding to customer input)
- Accountability (building in true accountability for delivering on Toyota’s promise to its customers)
- Leadership behaviors (actions that are inconsistent with Toyota’s stated values)
The second category – customer focus – speaks for itself. Toyota is now paying an extraordinary price for consistently downplaying or flat out ignoring input from its customers.
At the root of this must be the third category: greed. In its quest for growth through cost cutting, Toyota has sacrificed the lives of some of it customers.
In so doing, it has now put its very existence in jeopardy. As one of my psychologist friends is fond of saying, “It’s what you get away with in life that kills you.”
Toyota was suffering from an undiagnosed organizational cancer. The old saw that “an ounce of prevention is better than a pound of cure” is applicable.
Those who want to learn from Toyota should be seeking diagnostics that enable a rigorous, clear-eyed assessment of their organization’s health.
Tagged customer focus, greed, lessons, Toyota, worthy employer
AnonymousFebruary 19, 2010 at 2:53 pm
I enjoyed Laurie’s Toyota commentary of today. The Economist leader on Toyota from this week’s issue might be of interest:
http://www.economist.com/opinion/displaystory.cfm?story_id=15498249
David CreelmanFebruary 20, 2010 at 11:37 am
One factor that led to Toyota’s undoing was their realization that they could surplant GM as the world’s biggest car company. In achieving this ‘prize’ they unwittingly became the new GM.
We have got to push away this idea that rapid growth is the real measure of success.
Herb RubensteinFebruary 21, 2010 at 6:55 pm
Great blog!
One question I would raise is how do companies that are “worthy” publicize this and use it to enhance their reputation capital. It seems like we cannot assume that just because a company is “worthy” that it will translate into increased sales, increased employee applications, or increased profits unless the world knows about this aspect of its competitive advantage.
Herb Rubenstein
michael reddyFebruary 23, 2010 at 3:04 pm
I warmly welcome this new McBassi initiative. Haven’t read the Economist piece yet but am fascinated by how this will play out. There is a time when hubris begins to infect a successful business, when complacency overrides alertness and a Company begins to believe its own propaganda. Every auto manufacturer has recalls but Toyota’s response that training was to blame is naive. Training shortfalls can only be the effect of more systemic flaws. Their PR has been pathetic so far, they have things to learn from Perrier for example who manged to claw their way out of brand damage.
Dan McMurrerFebruary 24, 2010 at 3:38 pm
Herb’s comment (2/21/10) raises an interesting issue – what’s the mechanism through which worthiness will translate into organizational success (financial and otherwise).
One of the key hypotheses of our new book is that people are increasingly demanding more of the companies in their lives – AND that they now have the power and tools needed to make those demands matter. Social networking tools like Twitter, user ratings, and YouTube all make it possible to broadly “get the word out” if you’re satisfied or dissatisfied with an organization’s behavior.
Laurie BassiMarch 3, 2010 at 8:50 pmAuthor
Well said, David. That sums up the situation in a nutshell!