Total Recall: The Toyota Story

I just watched the BBC2 Money Programme episode about the recent problems for Toyota, which you can now watch on iPlayer (though readers not in the UK may not be able to see this). It seems it will be repeated on 31st March 2010.

The programme described the current travails of Toyota, telling of the accidents and reported incidents that led to the recall and the testimony to Congress in the US. There was a history of Toyota as a loom company before starting a motor division in the 1930s.

There was a nice little description of the Toyota Way and in less detail, the Toyota Production System.

The basic thrust of the message was that Toyota grew on the principle of quality and that in the last few years has lost sight of that to pursue the goal of growth. This led to quality standards not being maintained since fast expansion means that it was more difficult to keep the culture solid as they spread out quickly.

Given that most of us are not manufacturing cars, what can we learn from this story?

1) It shows that even if you are an example to others (and Toyota has been an inspiration to organisations in virtually all sectors across the globe in the past thirty years) it doesn’t mean you are infallible.

2) Culture is a slippery thing. It is something that is hard to get right and even when it is right, it will fizzle away if you don’t look after it.

3) Culture comes from purpose. They changed their purpose from quality to growth and the behaviour changed accordingly. In a sense, with that change in purpose, some trouble was inevitable.

4) We learn from mistakes. Toyota’s principle of continuous improvement is based upon that. Bring the faults to the surface as early as possible so they can be learned from. This mistake is a big one. If it had been caught early in line with Toyota’s ethos, it could have been dealt with easily, but because they didn’t deal with it quickly enough, it has now ballooned into massive damage to Toyota’s reputation. Hopefully we learn the most from the big mistakes.

5) Purpose is everything. To paraphrase Russell Ackoff, “It is better to do the right thing badly than do the wrong thing well.”

I bet that the other car makers around the world are a little bit glad that Toyota has been slowed down by this. However, they have the history of decades of quality behind them and while they will take a hit as fewer people trust their product for a while, they are in a much better position to learn from times like these than many other companies would be.

The final lesson is that in order to not to have to learn from the big mistakes you need to get very good at continuously learning from the small mistakes and then implementing what you have learned.

Best,

Rob

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