Five ways Toyota is getting it wrong

February 10, 2010

In contrast to the Saints’ great 2010 Super Bowl story, how did Toyota get it so wrong?

Here are five key ways they’ve created their current situation:

1. They believed their own press.

Observant, in-control Toyota.

Invincible, untouchable, always high-quality Toyota.

Or so we were led to believe.

Their cars have been, in so many ways, customer-pleasing (they have been for our family, too – we own two Toyotas).

As a result, Toyota and Lexus owners thought their cars were as safe as the company wanted us to believe.

Until we heard the terrified 911 call from the off-duty California Highway Patrol officer who died with three other members of his family in a Lexus he couldn’t stop.

2. They ignored the facts.

Perhaps Toyota saw what was going on with various product quality problems.

And perhaps they didn’t even look, or they couldn’t see.

Whatever the case, seeing the facts and responding appropriately to those facts could have helped them prevent the mess they’re in now. And to do that means they’d have to be able to see facts – whatever they are – as a good thing, ultimately.

3. They counted on past performance as an indicator of current performance.

Toyota has learned, hopefully, that you can’t just rest on your laurels, and your past performance.

A reputation for quality based on past performance does not guarantee quality in current performance.

You still have to check what the quality is on the production line, and coming off the line and going out to customers.

And you have to correct errors, whenever they are found, whatever is causing them.

4. No news was better than bad news inside the company.

The more we learn about the culture and dynamics at Toyota, the more it appears that when the waters were troubled, they didn’t go below the surface to see what they could see.

Bad news wasn’t wanted, or allowed.

Customer frustration and safety were, it seems, lower priorities than keeping internal peace, and supporting decisions that had been made by consensus.

Cage rattlers were not encouraged, even if customers’ safety was at risk.

5. They didn’t create a system that could support their growth goals.

The more we learn, the more it is apparent that Toyota’s success in the past had a lot to do with their system of careful apprenticeship, with new employees’ learning from others who had prior experience.

In recent years, the growth they sought did not allow them to maintain that careful system of learning, appropriate and attentive oversight and skill mastery.

They’re paying the price for trying to grow beyond their readiness to perform consistently and safely at desired volumes.

There are other problems in play in the mess that Toyota has made.

Hopefully, they’ll be able to resurrect their once-legendary quality, and rise above the now low expectations they’ve created.

The steps ahead for Toyota will surely focus on creating a system and processes to once again ensure that product design, testing, production, quality control and customer-responsive service and support are worthy of the customer loyalty that they took so much  for granted.

They will have to work very hard to earn customers’ business and referrals again.

It’s an important lesson, and a cautionary tale, for many companies and industries.

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