What About Toyota?
We lean consultants have had to answer many embarrassing questions about Toyota's recent performance since their massive recalls were announced earlier this year. How could this have happened to the company that embraced Taichi Ohno, and then revolutionized how we think about cost and quality?
An article in the current issue of BusinessWeek, "The Humbling of Toyota" explains what went wrong under the leadership of Fujio Cho (1999-2005) and Katsuaki Watanabe (2005-2009): rapid expansion and aggressive cost-cutting that strained the company's celebrated systems to the breaking point.
Jim Press, once the only North American on Toyota's board, spared no words in describing the damage:
The company has already taken action. In June of 2009, Akio Toyoda, the grandson of Toyota Motor Corporation's founder, took over in a move that seemed to point towards a restoration of Toyota's core values and a return to the company's cultural traditions.
The good news/bad news for them is that their systems are built from the ground up to respond. When Watanabe was in charge, he wanted cost-cutting and that's what he got. Now that Toyota realizes how foolish that path was, it will not take long to restore the quality of their designs.
However, it will take years to restore Toyota's image with the public. They spent decades building a highly profitable business based upon cars that were solidly built and long lasting, if not the flashiest. The financial pirates threw that reputation overboard in a quest for fast growth and higher profits.
In the meantime, what do we lean consultants do? It's pushing us to do what we should have been doing already for at least the last five years: Stop holding up Toyota as the shining city on the hill, perfect and therefore unattainable.
Instead, we should spend more time drawing upon the experiences from companies in a wide range of industries where lean thinking has produced dramatic performance gains.
An article in the current issue of BusinessWeek, "The Humbling of Toyota" explains what went wrong under the leadership of Fujio Cho (1999-2005) and Katsuaki Watanabe (2005-2009): rapid expansion and aggressive cost-cutting that strained the company's celebrated systems to the breaking point.
Jim Press, once the only North American on Toyota's board, spared no words in describing the damage:
"The root cause of their problems is that the company was hijacked, some years ago, by anti-[Toyoda] family, financially oriented pirates," Press charged in a recent interview with Bloomberg News. . .The financial pirates, he said, "didn't have the character necessary to maintain a customer-first focus."
The company has already taken action. In June of 2009, Akio Toyoda, the grandson of Toyota Motor Corporation's founder, took over in a move that seemed to point towards a restoration of Toyota's core values and a return to the company's cultural traditions.
The good news/bad news for them is that their systems are built from the ground up to respond. When Watanabe was in charge, he wanted cost-cutting and that's what he got. Now that Toyota realizes how foolish that path was, it will not take long to restore the quality of their designs.
However, it will take years to restore Toyota's image with the public. They spent decades building a highly profitable business based upon cars that were solidly built and long lasting, if not the flashiest. The financial pirates threw that reputation overboard in a quest for fast growth and higher profits.
In the meantime, what do we lean consultants do? It's pushing us to do what we should have been doing already for at least the last five years: Stop holding up Toyota as the shining city on the hill, perfect and therefore unattainable.
Instead, we should spend more time drawing upon the experiences from companies in a wide range of industries where lean thinking has produced dramatic performance gains.
posted by Katherine Radeka
at
3:35 PM
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