Toyota's Fall from Grace
Toyota's Fall from Grace
Toyota’s fall from grace is one of the most spectacular corporate disasters we’ve ever seen.Toyota’s fall from grace is one of the most spectacular corporate disasters we’ve ever seen.
It’s not just the inept handling of the crisis, nor the $2 Billion the company is predicted to lose in repairs and lost sales that we should be worried about. More it’s the fact that Toyota is not just famous for its cars – it also pioneered Kaizen, also known as “continuous improvement” a management system which has been adopted by thousands of organisations across the globe, including the British government.
The idea is to empower workers to improve production which, in theory, continuously makes a business more efficient.
But it would appear this system has failed in the most comprehensive and humiliating fashion possible. It’s hard to imagine more damaging faults in a vehicle than ones that affect accelerators and brakes.
Some of the problem lies with Toyota deciding it would be more efficient to build different parts of each car at 75 plants all over the world. That’s why the brake fault extends to both the Lexus hybrid and the Prius and why instead of a local problem it’s global.
However the malaise is much deeper than that. When customers first started complaining about problems with acceleration back in 2002 Toyota dismissed any suggestion that the accelerator could have been at fault – instead it blamed customers for not fitting floor mats correctly.
If this was the result of corporate arrogance it is likely to prove very expensive indeed. There are estimated to have been 2,262 instances of unintended acceleration in Toyotas in the US leading to at least 819 crashes and 26 deaths since 1999. The lawyers are salivating.
The net result has been that the good name of the world’s leading car manufacturer has been severely damaged overnight. Re-sale values of the used cars have plummeted and it’s hard to imagine a rapid recovery – especially given the length of time it will take to repair and modify affected vehicles.
But that could be just the beginning of the problem. For many years management consultants everywhere have been pushing Toyota’s famous Kaizen system to the extent that it has been almost universally adopted.
Consumers will need reassurance that other continuous improvement systems, do work and that the Toyota experience will not be replicated elsewhere.
Over the next few weeks and months organizations will need to rigorously check their own systems to ensure that the “eternal quest for improvement” has not left them vulnerable to the sort of disaster that Toyota now faces.
0 comments
Blog post currently doesn't have any comments.
other blog posts
For sheer greed and its determination to rip off the consumer there is no beating the aviation industry.
Posted:
06 July, 2010
One of the biggest and most dangerous myths perpetuated by politicians and the media is that the best way to protect the health of the population is by protecting healthcare budgets, whilst cutting...
Posted:
25 June, 2010
There has been much talk of unionist unity this week – and the prospect of some kind of accommodation between the two main unionist parties grows stronger by the day.
Posted:
04 June, 2010
When I was a cub reporter the most prestigious job you could get on a decent sized paper was industrial correspondent.
Posted:
21 May, 2010
It was an Election Night that ended as it started – in shambles.
Posted:
07 May, 2010
more blogs »