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Lessons from Toyota

The recent spate of problem with Toyota caused me to think. While the news is still coming out, it does seem that the folks at Toyota were not as forthcoming as they could (and should) have been about the problem with the accelerator pedals. It is also clear that the company may have been so focused on keeping costs down that they may have lost sight of their strong commitment to quality. No matter what, I do think we can learn something from the Toyota experience... Here are some of the things I’ve learned.

Worry about complacency. Complacency is your enemy. When things seem to be too good to be true, that may be when you need to be most on your guard. I think Toyota was complacent and that allowed them to become lazy about their legendary quality and customer standards. It is interesting that both Tom Peters and John Kotter also speak about the perils of complacency (in a number of different videos, book and articles). You need to be on your guard and always be asking yourself, "Are we living up to our highest standards - and upholding our reputation?"

The bottom line isn’t the bottom line: The true bottom line is the customer. If you don’t have customers, you don’t have anything. I think that Toyota may have become so focused on keeping costs down that they may have compromised quality. The American car companies had this problem in earlier decades (and we know what happened to them). It is important to focus in the bottom line, but you also need to be equally committed to maintaining your standards. If you compromise your standards for short-term gain, you will suffer... eventually. It might take some time, but the problems will arise.

Reputations are hard to build and easy to lose. Toyota has taken a big hit in the press. For decades they worked very hard to maintain the highest standards. They had an iron clad reputation. And the barrage of problems with car mats, accelerator pedals, and runaway acceleration (compounded by the reporting delays) has hit them hard. They are the butt of jokes on late night television. Sales are down and people are concerned. All of this happened in a matter of weeks. Think about it: Decades to build a reputation and weeks to damage it. Toyota may (and most likely will) regain its reputation, but it will take the company a while to do it.

Posted under Miscellaneous Thoughts, Leadership, Management, Corporate Strategy by Stewart on Apr 16, 2010 | Comments: 0 | Post a comment»

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