I was recently sent a blog post by Peter De Lorenzo, “The AutoExtremist”, on Toyota’s recent recall woes, or as Peter put it: “Toyota’s got trouble alright…Trouble with a capital ‘T’.”
Let me share a few paragraphs:
The harsh reality for Toyota is that it went too far overboard in striving to become the biggest, baddest car company on earth. And in the course of their quest they literally abandoned damn near everything that got them to the point of being a true corporate juggernaut to begin with.
The Toyota “Way”? It went right out the window as soon as they started planning new assembly facilities at the same time they were still finishing plants that weren’t even up and running yet. The “old” Toyota would never do that. The “old” Toyota would take their sweet time in making sure that a new facility was every bit as focused and dialed-in as their best facilities. If it wasn’t, it simply didn’t open until it was.
But the “new” Toyota started skipping steps and compressing timelines. And the details started slipping through the cracks. People – engineers, managers, manufacturing types – were schooled in the Toyota Way, but in the company’s breakneck, accelerated pace to eclipse GM as the world’s largest automaker it didn’t sink in. There simply wasn’t enough time to let it sink in either.
Communication broke down, both internally in Japan and externally to the troops in the U.S. The Toyota Way wasn’t the focus of the organization any longer. Classic Toyota descriptors such as “quality,” “reliability” and “durability” were replaced with words like “units,” “volume,” “production plan acceleration” and “domination” of markets.”
In today’s world, it does seem that many companies share the “bigger is better” philosophy. The faster one can grow the company, the better it will be for everyone. This is the attitude fostered by the “machine of production” paradigm where everything is measured in relation to dollars and volume.
The “new” Toyota, with its extreme focus on growth using metrics of volume and size killed the very thing that made it a great company – it lost its Soulful Purpose. The Toyota Way, like the HP Way, represented more than just a slick set of phrases or plaques hung on the walls. It was a symbol of something that was deeply felt at the very core or soul of the organization, and passed on like DNA generation after generation of managers and employees.
We are all for growth, and even accelerated growth, as long as the organization stays focused on its Soulful Purpose and ensures that this is at the center of everything it does. How fast is too fast? When growth is at a rate where it can no longer be effectively passed on to each new hire, carried out in each decision made by every manager, then the organization is simply growing at a faster rate than it will be able to sustain in the long run.
There is no one right rate of growth for every organization. The right rate of growth is strictly determined by how effectively it can propagate the Soulful Purpose to every new generation of employee. Companies undergoing large growth or expansion initiatives should heed Toyota’s recent downfall and take a very close look at their core values, ensuring that a “practice what we preach” philosophy remains intact at all levels of operation.