Monday, May 20, 2013
What can we learn from Toyota
On SNLs (Saturday Night Live) March 13th airing, they ripped Toyota a new one with the hilarious reenactment of a Prius going out of control. Cast member, Kenan Thompson, was driving the accelerator-stuck, green machine as it crashed through the woods all the while cussing the car at the top of his lungs. I laughed uncontrollably. Toyota is really taking it on the chin as of late; so bad that my 8-year daughter made me "pinky-promise" her that I would never ever, ever buy a Toyota. I asked her why, and she said "because I love you daddy and I dont want you to crash." YES Toyota, your PR has been that bad.
To some this story may already be old news...we are more concerned with the oil spill and economy than we are with Toyotas problems; however, there are huge lessons than we can learn. All of us in the business community have been affected by the down turn economy, but like Toyota we cant focus on the past. We must look ahead to the light at the end of the tunnel...just as long as that light is not the head lamps of an out of control Prius!
Most failures or financial set backs in todays economy are unforgivable. All of us have whined about the competition at some point. ["They are doing the work at cost!"] That is a dangerous game to play in my industry and for contractors one false move while operating at break even highly increases safety concerns and major financial risk. But what happens when your business takes a step back due to a product failure like Toyota? For most American businessmen and women, failure comes with risk and sometimes thats part of the game we play.
Jonathan Ortmans, writer for Entrenpenuer.org writes:
"The United States enjoys a longstanding belief that failure is merely a pit stop on the way to success. Thomas Edison conducted more than 10,000 failed experiments before turning on the first incandescent light bulb. Milton Hershey faced three unsuccessful starts before satisfying the American sweet tooth. Even Steven Jobs confronted failure when Apple fired him from the company he created-only to welcome him back to transform the marketplace once again, this time with the iPod and iPhone. Unfortunately, similar stories are far too infrequent around the world. Failure-and the economic growth that its lessons stimulate-is not an option in every culture."
In Japan, many of your large corporations and the government employ most Japanese workers. And in these large corporations such as Toyota, they too embrace the business philosophy: failure as opportunity. Which leaves me, wondering when rather than if Toyota will survive. Even though most of us have already forgotten about the floor mat sticking Prius, the Toyota brand is in serious trouble. After recalling, correcting, dropping prices and dropping interest rates, people still arent buying. Why?
At a press conference following the first Toyota recall, CEO Akio Toyoda didnt take the initial recall as serious as maybe he should have. His presence and demeanor suggested that he had scoffed at traditional Japanese business ethics, and thought we Americans had blown the whole thing out of proportion. Just before the press started with questions, Akio Toyoda addressed everyone with a mere 40-degree bow. In Japan the bow is a very important and sacred means of respect and humility. The lower the bow the more humble and respectable one is to his foremost audience. Due to present circumstances and the future of Toyota automobiles, everyone expected the full 90-degree bow called the saikeirei, which exemplifies the fullest veneration or humility. Shortly after the press conference Toyota mandated a 60-degree bow minimum for employees.
Why a lack of respect on Akios part? Has Toyota become too arrogant? The half hearted or half-bow would suggest so. Peter Brown, Publisher of Automotive News suggests that Toyota is experiencing what is called big company disease. Peter was quoted numerous times on the recently aired documentary about Toyotas failure entitled Total Recall on CNBC. Toyotas success had become the blueprint for manufacturing across the globe, so the documentary proclaimed. In the beginning, Toyotas growth was rich in Japanese tradition and whose foundational building blocks are quality, quality and quality. But in the past decade, their fast growth and success had soon become a recipe for greed.
To give some indicator as to just how successful Toyota had become, lets compare them to the worlds largest automaker GM. In 2007, Toyota profits had reached 14 billion while GM was facing 39 billion in losses. Toyota would soon surpass GM. They wanted to be number one...bad. And the birth of the little green machine called a Prius, driven by Hollywood stars such as Julia Roberts, Leonardo DiCaprio and Ryan Gosling, would soon get them to the top spot. But all the success, race for number one and riding the green wave would all come to a screeching halt as the 911 caller died behind the wheel of an accelerator stuck Prius. By now most of us have heard the horrifying 911 call from California on August 28th, 2009...a day that would forever live in infamy for Toyota.
Time will only tell their survival, but before you toss out Toyotas problems with yesterdays news, I beg you not to miss this lesson of humility. Toyota is still working on a final resolve for the sticking accelerator, but not after 8 million cars had been recalled. For folks like Peter Brown, Toyotas failure would be due in part to the 50% increase in manufacturing in just 5 years. A growth that would be unprecedented for most manufacturers let alone automakers. Whatever the solution is to repair the accelerators and rebuild the Toyota brand, CEO Akio Toyoda must go back to basics. This failure is an opportunity...an opportunity to refocus on the original success of Toyota, which is quality, quality and more quality. Now is the time for Toyota to redeem, and humble themselves before their core client base. Its time for the saikeirei bow...the full 90 degree bow. Failure is just another pit stop to opportunity.
Unfortunately in this economy very few are experiencing too much success as did Toyota before August of last year. Many of us have been in survival mode. Buried deep in the nightly news transcripts below the latest American Idol updates, NBA playoffs and the oil spill in the gulf, there are stories of businesses succeeding against all odds. They are turning their own economy around. Those companies are those who have focused on quality, quality and more quality at a fair price. Those companies are also those who view failure as an opportunity.
Just as Toyota mandated the 60-degree bow for employees during this setback, we too must mandate humility and respect in our own business ethics. We must focus on quality, humility and honesty. And when failure happens, whether its a product or deal lost, or tenant moves out, remember this: A true entrepreneurial economy can thrive only in a culture that allows people to make mistakes, learn and try anew. As Henry Ford once said: "Failure is simply the opportunity to begin again, this time more intelligently."
Wrap Up:
So what can we learn about Toyota? I take away three things:
1. Toyota built their empire on three things: Quality, Quality and Quality. They (As we say in the South) should, "Dance with the one that brung ya." They need to switch their focus on being the best not the biggest.
2. Humility. In business there are ups and downs. Taking the top spot from GM was a major up for Toyota. But getting to the top is not the hardest part...its staying there. And to be at the top, you must learn humility. For Toyota this starts with the mandatory 60 degree bow. The next time CEO Toyoda is faced with such a travesty press conference, I am sure we will all see the full 90 degree saikeirei.
3. Failure as Opportunity. Back to the basics for Toyota. They should embrace Japanese business ethics and treat this unfortunate event as an opportunity to begin again, this time more intelligently.
I am confident that Toyota will be back. If I know anything about Americans its that we have short memories...and we suck at history. I hope you have enjoyed this edition of Mechanical Matters. Yes, not much was said about the mechanical industry or buildings, but as businessmen and women reading this article there is much to be learned from Toyota. I know I needed to hear it. My article wouldnt be complete if I didnt include some humor. Go to my website MechanicalMatters.com to view this entire article and the video. I stumbled across this video on Twitter (follow me @jimmyveteto). In the video an American family has used their Toyota SE mini-van as the hook line of a rap called the Swagger Wagon. The rap and video is very well done and considering Toyotas rep right now, it wouldnt be a bad idea for them to embrace this video and pay to have it played across national television. The American family would appreciate the humor and the subliminal message implying that Toyota is a safe and quality made vehicle for a family. Enjoy.
