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Akio Toyoda to testify in Washington: maybe he’s finally waking up to the fact that he runs a global company and has to behave that way. – Tweet by Michael Schuman, Correspondent Time magazine – 18/2/10
As most of us know (If you follow movies), there is some lead time involved before ‘The man’, turns into a Werewolf (only when there is a full moon). Well, Toyota (the werewolf) had known about the complaints ranging from unintended acceleration to brake failure in 2002 (US regulators informed 2004). Even Steve Wozniak, mentioned his Prius problems and indicated that the problem was software based in an interview in early February. The transitional phase had started for Toyota to become a werewolf. All Toyota had to wait for was nightfall. The dreaded night for the werewolf came in January and by the end of that night, the werewolf had killed an estimated 19 people in the US alone, recalled 8.5 million cars, sales had fallen by 16% in January alone and an inquiry launched into Toyota Corolla’s power steering problems. The Toyota that had won the Japanese quality award for 1980 had been consumed by the powerful werewolf that was now the largest car maker in the world since 2008.
The damage had been done! The werewolf awoke the following morning and realised that it had to remedy the situation. As we know, the remedies for werewolves are painful (not mentioning the silver bullet). As Japan sped up its car recall system, the US knew it could not live with a werewolf amongst its midst and congressman Edolphus Towns, told Toyoda in a letter that American drivers were “unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it.” The latest news is that the werewolf’s representative (the boss himself) has agreed to attend the Congress hearing.
The werewolf is trying hard to fix its problems, including the infamous sticky accelerator problem – Click here – (excellent interactive graphical courtesy of the Guardian) with a brake-override system in all future models. The werewolf had hugely underestimated the problem as in the winter of 2008-09 it had reports of “stiff” pedals.
President Akio Toyoda, grandson of Toyota acknowledged on 17/2 for the first time that the firm had expanded too fast in its quest to increase profits and overtake General Motors as the world’s biggest carmaker, a feat it achieved two years ago, according to the Guardian website. He acknowledged in an opinion piece he wrote for The Washington Post recently that the company had “failed to connect the dots” between the sticky pedals in Europe, surfacing as early as December 2008, and those in the U.S. that culminated in the massive recalls. He also said, “The Company needed to improve sharing important quality and safety information across our global operations.” The werewolf believed it to be a “quality” not a “safety” issue. Steven C. McNeely. Manager, SMS , in his article, Lesson Learned from Toyota, argues that, “safety is an unspoken and unwritten quality expectation of our customers, and you cannot separate the two. You can have a quality product or service, as defined by the ISO standards, and still not have a safe product or service. Toyotas’ problem clearly accentuates this point”.
“Toyota managers did not respond to the early signals. That’s when they should have identified the root causes,” said Sharma, who teaches Toyota production methods to businesses. “If the Toyota brand no longer stands for quality, what does it stand for?” – Anand Sharma, chief executive of TBM Consulting Group, based in Durham, North Carolina, told The Associated Press
“Toyota drivers have gone from being customers of the company to being wards of the government,” says Jim Cain, senior vice president of Quell Group, a marketing-communications firm in Detroit, and a former Ford media-relations executive. ” according to Time.
“As far as we know, Toyota is still the best manufacturing company in the world when it comes to production management,” Michael A. Cusumano, professor at the MIT Sloan School of Management, the gas pedal and floor-mat defects were design errors in supplier parts, and the faulty braking in hybrid models was caused by a software glitch. They weren’t manufacturing errors, the kinds of defects workers at plants have been trained to pick out — a piece that doesn’t fit, a crack in a part, something that diverges from the design.
“Toyota has been exemplary at surfacing problems in the factory and stopping production before a crisis was reached,” said Jeffrey Liker, professor of Industrial and Operations Engineering at the University of Michigan, who has written books on the Toyota Way.
“Failure to follow all the principles of the Toyota Way led to this crisis. Now the Toyota Way is the only way out of it,” said Liker.
CIOs and IT Management can learn from the Toyota debacle. The most important question I had to ask myself when I heard of Toyota’s woes was a simple one. Do I unlearn everything about Just In Time (JIT), lean management, Total Quality Management (TQM) and ‘The Toyota Way’ and start over? I will leave that question open, for now!
The key lessons for CIOs are:
- Acknowledge and fix the problem with any process, system or project as soon as it is highlighted by stakeholders. Do not allow it to spiral out of control.
- Listen, listen, and listen again.
- Isolate the issue(s) and ensure that it is not a part of a much larger problem.
- Everybody within the company is an ambassador for the company, including the IT department. If the IT dept spot a non IT issue that affects the company, take 100% responsibility for it and get it addressed.
- Use social media (SM) channels such as LinkedIn, facebook and Twitter to monitor your user community by proactively listening, anticipating problems and getting involved with these communities.
- Do not hide/shy away from social media (SM) and use it to create competitive advantage.
- Brand reputation can be enhanced or irreparably damaged on SM. Be there to get your message across
Related Article on Toyota pay the price for not connecting the dots