Thursday, February 09, 2012

Toyota is Smart Enough to Stick with What Works, Right?

I don't believe Toyota is foolish enough to have "dramatically changed the way the company is managed." If so Toyota will suffer and the big 3 will be given their chance to dominate once again.

Akio Toyoda: Toyota's comeback kid paints the typical American magazine picture of radical CEO doing radical things to shake up company and general be heroic.  They don't seem to like to say, Toyota refocused on what has made it great for decades.  They updated a few things to deal with the current state of the company.  And they will continue to do use thee same great management concepts they did for the last 30 years for the next 30.  And American executives don't want to be seen that way - they want to be portrayed as heros.  Hopefully Akio Toyoda hasn't adopted that narcissistic tendency from his American peers.

I imagine (and hope) that it is just like all the stories talking about the Toyota crisis that wasn't.  The story of Toyota has been great management for 50 years.  They haven't been so foolish as to drop that at any other time.  I doubt Akio Toyoda is that foolish today.

Yes, Toyota needs to constantly question if they are failing to perform as they should, if they are slipping...  And they need to constantly improve not just the factory but the management processes.  Doing so is not dramatically changing, that is continuing what has been done.

American companies are so concerned with financial rewards and making themselves seem like heros they have to present everything as dramatic changes.  If Akio Toyoda has fallen to that American narcissistic disease Toyota's long term future is no better than any other car companies (and worse than Honda's).  But I don't think Toyota or Toyoda are that foolish.

As I said a few years ago, and still believe, Toyota's crisis was not a crisis.  Toyota did seem to slip a bit in trying to get away with shortcuts to quick results.  It was a fairly minor slip and all they needed to do was return to what had worked so well for decades.

Related: Toyota Stops Lines – Lots of Lines - Akio Toyoda’s Message Shows Real Leadership - Toyota Execution Not Close to Being Copied

Comment on the post from Jeff Liker:

I met with Akio Toyoda twice for a total of 4 hours and have been watching his actions closely. His philosophy is very simple:  "back to the basics of the Toyota Way."  That is all he says and all he does.  On the other hand he believes Toyota has become too bureaucratic and needs more regional autonomy and more entrepreneurial-like innovation.  In the Toyota Way 2001 they cite his Great, Great grandfather, Sakichi Toyoda, as saying: 'it is a big world out there, open the window."
So Akio Toyoda has taken actions to open up the company more to the outside world, including various partnerships, and a more intense focus on listening to the customer and innovating to stay ahead of the competition.  He also learned in the recall crisis that Toyota was slow to respond to media attacks and thus in some cases needs faster decision making leading which led to cutting the board of directors in half…. A good thing for Toyota in my view.

I do believe Toyota could do a better job of listening to the customer.  A big part of customer issues is the very customer unfriendly dealer process - pricing based on how foolish or lazy the customer is.  I doubt Toyota is willing to try and tackle this though.  It is easier to let the customer lose and keep the politicians happy.  Politicians are paid a great deal by dealers to create legal framework that makes it very hard for car companies to provide make customers value the top priority.  The dealers essentially pay politicians to allow dealers to prosper at the expense of customers; the business practices that close to noone would say are in citizen's interests.  Yes it is hard to deal with this.  Toyota has been doing what it can to accept the current system and reduce some of the negative impacts on customers.  But it is still the most obvious area of significant systemic failure to customers I believe.

I think the bureaucratic issues do need to be addressed.  And increasing the speed at which strategic/critical decisions get made is wise.  Opening up to the outside world is wise.  It is also dangerous if you start accepting the latest fads without thinking.  Obviously no-one intentionally does this.  But it happens a great deal.