Toyota’s failure to act on the dots
February 28, 2010 Leave a comment
It seems that every few weeks we hear of another major series of tragedies leading to a crisis that could have been substantially mitigated, if not entirely prevented. Among the most disturbing to discover, and most costly, are those involving safety issues that either threaten or cause loss of life.
Often has been the case during the past decade when the organization involved has been a government agency, but this quarter Toyota wins the prize for failure to act on the digital dots in the enterprise (in fairness Toyota should share the prize with NHTSA—also the front runners for the annual prize—it’s still early in the year).
In the case of Toyota, we may never know how many digital red flags existed within the enterprise network, but the clear pattern in other cases suggests that the probabilities are high that warnings were common within communications, documents, and web servers indexed by enterprise search engines. Similar to previous events, these problems were known for years by the corporation and the agencies charged with regulation, yet they collectively failed to prevent loss of life, resulting in personal tragedy for a few and far reaching economic destruction in one of the world’s premier corporations.
While growing too fast may have contributed to this problem, it was organizational system design that allowed it to become one of the worst crises in the company’s history, and a serious threat to the future. Toyota has done a good job with innovation in product design compared to most of its competitors, but failed in adopting innovation in organizational management that would sustain their success.
When will leaders of the largest organizations finally understand that failing to invest in how organizations function is often the most expensive mistake executives will ever make? Given the size and impact of industry leaders, combined with the systemic nature of the global economy, these types of failures are unacceptable to growing numbers of communities, companies, and consumers.
An article in the WSJ sums it up well with this quote:
Liu Jiaxiang, a Toyota dealer in Shenzhen, said sales at his stores in southern China have been “steady” since late January. “What keeps me awake at night is a possible long-term erosion of customer confidence in the Toyota brand” because of the recall problem, he said.
Denial is a powerful force in humans, particularly when combined with peer pressure, social herding, politics, bureaucracy, contradictory information, and sheer inertia that seems unstoppable at times. It’s also true that cultures of invincibility have a consistent track record of experiencing crisis and decline soon thereafter.
Mr. Toyoda, if this post finds you, I invite your team to revisit our publications and jointly explore how our holistic semantic enterprise platform could have reduced or prevented this series of recalls. Even if Toyota had deployed Kyield when your domain first appeared in our Web logs, we almost certainly could have contained this event to a multi-million dollar product defect issue, rather than the multi-billion dollar corporate crisis that it has become.