The Toyota disaster - or rather string of disasters - came as a severe shock, not only to car owners, but to those who believe good management can be enduring.
Among all the superstars of the Japanese post-War rise to market dominance in key industries, Toyota had the best story. Family owned and professionally managed, Toyota invented a management culture that steadily transformed the business from obscurity to world leadership. Before disaster struck, Toyota had achieved what must have been its dream for decades - ousting General Motors from the lead position in what is still the most important manufacturing industry.
All the Japanese triumphs were personified by Toyota, including, of course, the worldwide drive to setting new standards of production engineering that left Detroit far behind. The foundation of the engineers’ breakthroughs was quality. Americans had seen the promise of a new philosophy of raising quality standards by systematic approaches. The pioneering hero, W. Edwards Deming, was credited with exporting these new ideas to Japan. They were just as valid for US use and would have won the same painless rewards. But Detroit didn’t want to know - a wilful ignorance repeated time and again in industry after industry.
The Toyota Production System became the world standard, bringing fame to a simple engineer named Ohno whose pupils demonstrated their methods without any fear of successful imitation from the West.
It was easier, it seemed, to write off the Japanese revolutions as products of a different culture which was inimical to Western ways. That was nonsense. The cultural advantage, put simply, lay in defining what needed to be done and working out better systems of doing it. That included rigorous methods for checking that the task was indeed better designed and done.
At Toyota, the recalls of cars and vans to check on faulty brakes and accelerators represent a staggering failure of this basic philosophy. There must have been a breakdown in the mental conditioning at the Toyota factories, resulting in design and production faults that were as systemic as the traditional hit-or-miss performance of the Western rivals. Since these are beset by troubles enough of their own, such as GM’s sorry bankruptcy, there is no room for self-congratulation.
Toyota’s fall isn’t just a Japanese incident, but rather a sign that management in general is failing to deliver.
If the management knew about the problems, did it fail to identify the root causes? If the causes had been identified correctly, was the reaction delayed while the company ignored the damage to its market status? If Toyota was capable of timely repair, why wasn’t this put in hand? Remember the simple problem-solving rules:
• Identify the task that needs to be done.
• Work out systematically better ways of doing it.
• Employ rigorous methods for checking that the task is better designed and executed.
The Toyota affair emphasises some basic points of management. First, any company, no matter how large and how famous for its merits, can stumble into grave error. Second, damaged pride and nervous fear make it difficult to correct the error in good time. Third, management decisions should normally never be taken on the basis of profit forecasts alone.
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