“Toyota under fire” by Jeffrey K. Liker and Timothy N. Ogden is an elaborate account of what went on inside Toyota in recent years and in the wake of the economic crisis and various quality issues leading to the recall of more than 10 million vehicles globally. Toyota – arguably the world’s most acclaimed company – showed remarkable perseverance during this time by going back to its core principles of ‘respecting people’ and ‘continuous improvement’ as well as adhering to a core Japanese virtue: the principle of Gaman. Gaman refers to the ability to endure something unpleasant that one has no control over. While Gaman refers to patience and endurance carrying a passive connotation, Kaizen refers to active engagement in continuously improving work around us. The two go hand in hand. Liker and Ogden get it right concluding their book by stating that “turning crisis into opportunity is all about culture” (p. 200). Toyota’s actions (and patience) during the crisis best signify her adherence to the Toyota culture and the five core values of the Toyota Way published by the company in 2001: Genchi Genbutsu, Kaizen, Challenge, Teamwork and Respect for everyone.
There were stark contrasts between BP’s finger pointing attitude during the Gulf of Mexico oil spill and Toyota’s responsibility assuming approach during the recession and the quality and recall problems, even though Toyota’s issues were miniscule compared to the destruction of the Gulf of Mexico. The timing of the recall crisis could not have been any worse for Toyota. Just as it was recovering from the recession in August 2009, the Saylor family accident happened on 28th August. This tragic accident, found to be the result of the dealer improperly installing an oversized all-weather floor mat, quickly snowballed into numerous claims about runaway cars due to electronic problems, huge safety allegations and mounting pressures from the media almost exclusively in the US. “Toyota bashing”had simply become fashionable. The allegations were – by and large – unfounded and Toyota was officially exonerated when NASA published its verdict ruling out electronic technical faults causing Sudden Unintended Acceleration in Toyota vehicles in February 2011. Yet, Toyota never resorted to evading the issues or blaming others (even hinting at the likely fact that plaintiff lawyers suing Toyota were actively feeding the frenzy). Akio Toyoda, chairman and grandson of the founder of the company, went in front a Congressional committee and apologised for any ‘potential damage’ to customers while making a pledge to continue to improve quality and work vigorously to restore customer trust. Toyota under fire is a perfect account of how and why, at no point Toyota attempted to point fingers and showed respect to everyone; and I mean everyone. Not just Toyota customers, Toyota employees and Toyota suppliers but even those who had a clear stake in taking Toyota down.
“Toyota ’s Gaman is the principle of resilience to get through hardship”
Toyota through intensive self reflection found many opportunities for improvement, problems that did not necessarily cause the recalls. Arguably as Toyota grew rapidly it did not find a way to make sure every employee was intimately familiar with its core principles. Moreover, the recall crisis showed how the sales, after sales and quality functions needed to rethink how they worked together to adhere to the principle of Genchi Genbutsu. In this case Toyota decision making was too centralized in Japan and they needed to give more influence to those closer to the customers and get their concerns directly to the point where someone could take action even if it was a matter of customer perception and not objectively a quality control or safety issue.
Furthermore, I may add an additional point to Liker and Ogden’s account of how culture drove Toyota’s decisions. Toyota is not only the exemplar company in creating a culture of scientific continuous improvement and respect for people, but the holy grail of systems thinkers too. Between 2008 and 2011, Toyota demonstrated that it truly understands the interconnectedness of unevenness (Mura), over burden (Muri) and waste (Muda) at a macro level as well as in daily operation of its manufacturing plants. Prudent spending during the heydays and keeping generous cash reserves – for which she had often been criticised if not penalised by the financial community – meant that Toyota could cope with reductions in sales and plant idle time without great financial difficulties and without laying off regular team members. Also, her ability to quickly up-skill employees and her agility in end-to-end operations meant that she could flex resources and adapt to changes in demand with remarkable speed and at minimum cost. Toyota’s systemic thinking underpins the principles of the Toyota Way such as Gaman and Kaizen which in turn breed systems thinkers at all levels of leadership within Toyota.
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