Toyota Motor Corp. was built on two principles: that the customer always comes first; and, a Zen-like passion for excellence, using a systematic approach to manufacturing and production - The Toyota Production System (TPS).
The TPS is now a world-renowned system. It is followed, in varying iterations, across a myriad of sectors of society; it is utilized in hospitals, multi-national sales organizations and even governments cull bits and pieces of this ingenious system that strives for excellence one small fix at a time. 'Continuous Improvement' is the goal - not every week or even every day, but every minute.
From Bombay to Buenos Aires, the TPS has increased productivity, decreased cost and, more importantly, increased quality. Over one-hundred books have been published on the subject.
Japanese engineer Taiichi Ohno is the pioneer who developed the system. And Eiiji Toyoda, the Japanese industrialist who would champion and lead the "Toyota Way,' would encourage such philosophies.
Flash forward to now. Toyota is facing what was once thought of as inconceivable - failure. Failure of quality, failure of safety and failure of one of the most important tenets of the Toyota philosophy - failure to protect the customer because of the lack of problem solving. In fact, Toyota's system of waste elimination, just-in-time delivery, visual management and built-in-quality has always been so good that they rarely have had to deal with such a public relations and management crisis.
4.5 million vehicles have been recalled across the globe. Worse, the original problem of gas pedals sticking because of improperly designed floor mats, has morphed into an actual mechanical problem with the pedal mechanism itself. At times, it seemed as though the grand masters of engineering and problem solving weren't exactly sure what the problem was. And before Toyota's team could get out in front of the story, the problem became what advertisers refer to as going 'virile.'
Now the venerable icon of smart engineering and green technology - the Prius - is having brake problems. Toyota sold 270,000 Prius' last year, but has yet to announce an official recall.
Talk about stop-and-go marketing.
Toyota has been clawing to become the world's No. 1 automaker for over a decade. They tirelessly did everything possible to ascend to the crown which General Motors held for more than half a century. Toyota now sees the torment in what was their unwavering redlining to draft the Chevy's and Pontiac's for so long. Toyota has slingshoted themselves into the lead. But at what cost?
The 'Quiet' Giant Speaks
Toyota President Akio Toyoda finally addressed the media regarding the recalled vehicle crisis. Even the Japanese media and government have voiced their displeasure with Toyota's handling of the problem.
The top Nikkei business daily said in a editorial that "words are not enough." The reporter also said that "The company's crisis management ability is being subjected to severe scrutiny." Another criticism came from the nationwide Asahi newspaper which calls Toyota's delayed reaction to the crisis "Utterly too late." It says, "The entire world is watching how Toyota can humbly learn from its series of recent failures and make safe cars."
Mr. Toyoda promised to beef up its quality control and said he would head a special committee to review quality checks, go over consumer complaints and listen to outside experts to develop a fix. That last comment is unprecedented. Imagine the President of Toyota Motor Corp. asking for 'outside help?' In the annals of engineering and problem solving, for Toyota to have to ask for help is heresy. The Japanese just don't make blunders such as these.
To be sure, this will be a leadership moment for Toyota. They have a unique opportunity to show the world what real leadership is. Remember how Johnson & Johnson dealt with the Tylenol crisis? It was genius - tell the truth, do what's in the best interest of the customer and develop a robust containment plan - a Toyota Commission of sorts - to answer any and all critics. After all, the best defense is a good offense.
Since its founding in the early part of the 20th century, Toyota has been anything but a stalwart company - it has redefined entrepreneurship and innovation. A whole South Korean automobile industry has grown out of Toyota's trailblazing efforts. In fact, Toyota's simple, but disciplined approach to manufacturing and production has changed the world in many ways
Thus, only by keeping the customer first and by learning from a large-scale failure, Toyota will hold true to its overriding principles: 'People' and 'Quality.' Hopefully Mr. Toyoda can live up to this 'Leadership Moment.'