Tom Asacker

Toyota and obsession

Akio Toyoda, president of Toyota and grandson of the company's founder, testified today in front of the House Committee on Oversight and Reform as lawmakers continue to examine Toyota's record recalls. During the proceedings Toyoda remarked:

“My name is on every car.”

I suppose that statement was intended to convey that, as a leader, nothing is more important to him than the customer (after all, a car brand is only as strong as its customers' feelings for the brand). Unfortunately for Toyoda, that's simply not the case.

In the past, Toyoda said, the company's priorities were safety and quality, and sales came last. But as Toyota grew to become the world's biggest carmaker, "these priorities became confused, and we were not able to stop, think and make improvements as much as possible."

Sure they were. It was a choice. Like every business, Toyota could have chosen to stop, think and make the right decisions. They chose not to.

By confusing the essence of his business with the numbers that essence produced, Akio Toyoda has dug himself into a very large hole. By turning Toyota's obsession from quality and reliability to sales and profitability, he may have unwittingly destroyed the reputation -- the brand -- that took four decades to create.

Akio Toyoda is not alone in this misguided business approach; this rigid, inside-out focus on the organization and its "numbers." Many leaders are losing their sense of empathy and becoming narcissistic; obsessed with their image as reflected by internal goals and measurements and by Wall Street analysts.

I've said it before, and I'll say it again and again and again: Business is not about numbers.  It's about people and their feelings. Numbers simply tell you how well you're doing with those feelings; with the contribution you're making to your customers' lives.

Why did so many Americans buy Toyota vehicles? Because we believed that the people at Toyota were obsessed. We believed that they cared deeply about us and our cars. We believed that they were passionately committed to the truth and to the pursuit of perfection. And so, we felt cared for and safe.

Now we're finding out that, indeed, they were obsessed.  But, like so many businesses today, they just weren't obsessed with us.

As usual Einstein was right, "Perfection of means and confusion of ends seem to characterize our age."

Bonus link: BMA's March 2010 podcast on the Toyota crisis

Crisis and obsession

According to the Wall Street Journal, a series of gambles put the energy company Constellation Energy Group's very existence in jeopardy. And it was their brush with bankruptcy that awakened their leader.

Prior to the company's crisis, CEO Mayo A. Shattuck III believed that leadership was all about mission, vision and motivation. Not any longer:

"I don't assume anymore that execution will simply happen because they're all really smart people -- which they are -- and wait to see the numbers after the fact. Now I question everything. I leaned too heavily on the notion that leadership was setting the vision and motivating people around it. Now I need to balance that with getting dirty with the details."

Question everything. Get dirty with the details. It's about time.

Crisis provides an opportunity for change and growth, or it causes regression and stagnation. It can put you further to sleep or, like a bucket of cold water in the face, it can wake you up.

It appears that Shattuck's organizational heart attack has awakened him to his true role as a leader. It has also created a bit of an obsession.

Obsession in and of itself isn't bad.  In fact, it's good if it advances your mission and brings meaning and happiness to your life and to the lives of others. It's bad, however, if it interferes with your growth; as an organization and as a fun-loving, compassionate human being.

Unfortunately, most organizational crises create paranoia and, as a result, micromanagers obsessed with procedural trivia. Getting dirty with the details is not the same thing.

Micromanagement is an obsession with the inconsequential details of people's work. It's a waste of time and results in disengagement, at best. On the other hand, getting dirty with the details is an obsession with one's brand; the strategic essence of the organization.

In his book, "It's Not What You Sell, It's What You Stand For," author and ad man Roy Spence, Jr. recounts a marketing meeting with Herb Kelleher where Spence lobbied passionately for Kelleher to give passengers something more to eat than peanuts:

"Herb, damn it, give the poor people a Snickers bar to bump up their blood sugar so they won't pass out and sue us."

Is a peanuts vs. candy bar decision a CEO's purview? It depends. Is it trivial or strategic? Here was Herb's response:

"Roy, let me share a simple thought since it seems that simple is all that you can understand. Here is a pack of peanuts. It costs 12 cents a pack to give out. Here is a Snickers bar. It costs 38 cents to serve -- not counting the overhead bin space that Snickers would take up over peanut bags, which I will get to in just a minute if you can follow this tiny little logic trail. So there is 20 cents difference between a bag of peanuts and a lousy Snickers bar. But what is 20 cents to an ad man, one might ask? Well to you it is only 20 cents -- to us it is twenty cents times 3 million customers, and that is $600,000 PLUS the overhead bin space and the extra weight which will cause us to burn more fuel and god knows how much that would be!"

Kelleher was obsessed . . . in the right way. He was obsessed with the value of his offering. Herb understood that, like an artist laying down globs of paint, it's the aggregation of small details and purpose-defining decisions that make great organizations great.

Many organizations are in crisis mode today. And there's nothing wrong with that, so long as the pressure-inducing situation creates the right obsession; an obsession with strategic differentiation.  An obsession with the details that matter to everyone and which will truly make a difference in the long-term essence of the offering, and in the improvement that it makes in people's lives.

Free teleconference

I'll be participating in a free teleconference this Thursday, February 18 at 4PM ET (1 PM Pacific). If you're interested, here's a link to the description page:

http://tinyurl.com/yfhk8au

Note: You'll find the registration link at the top right hand side of that page, and about half way down you can listen to a short interview I had with the host.

Blogosphere on Positioning

The very smart strategy consultant and Forbes columnist Sramana Mitra has published an interesting series on her site called the BlogoSphere on Positioning.

You probably know my views on positioning: 

"It is not the position, but the disposition." - Susan Sontag

And here's the dated view, from Ries' and Trout's seminal book of the same name:

“The basic approach of positioning is not to create something new and different, but to manipulate what's already up there in the mind, to retie the connections that already exist."

Spirit and character, created through one's actions.  Or manipulation through words and images.  Your choice.

What dat?

What a game! Who dat, indeed! And those Super Bowl commercials? What dat?

A Doritos ninja? Men singing in an open field about wearing no pants? Men being men again through the purchase of muscle cars and big screen TVs? Dove for men?

Dozens of advertisers paid upwards of $3 million dollars for 30-second spots, which they believed would generate pre-game buzz, inspire post-game water cooler conversations and media mentions, and create further engagement with their commercials, web sites, products and services.

So did they get their money's worth? 

Who cares? Really? I don't. You don't. And I don't think they really do either? The marketers funded an amazing piece of choreography and drama: the game itself. And if you love football, like I do, you should be thankful. (I was also thankful to learn that Abe Vigoda is still alive).

So change your routine for a day and show your thanks by Googling your nearest Denny's for breakfast, grabbing a Bud and a bag of Doritos for a mid-morning snack, swinging your test drive Audi into McDonald's for lunch, washing down a Snickers bar with a Coke and Dr. Pepper for an afternoon boost, and enjoying a relaxing dinner at Taco Bell dressed in your brand new Dockers.

Amazon, Macmillan, Apple and the future of books

Last week a temporary cease-fire went into effect amidst a brewing battle between Amazon.com and Macmillan, a unit of Germany's Verlagsgruppe Georg von Holtzbrinck GMBH and one of the largest publishers in the US.

The battle was over the price of ebooks on Amazon's site.  Macmillan insisted upon -- and eventually received -- a 30-50% increase over the $9.99 loss leader price for new releases that helped build Amazon's dominant position in the ebook market. But only after an attempt by Amazon to wield its distribution power to force Macmillan to back down. (You can read the details at this link).

Most pricing disputes are about slicing the pie. This one is about the future of the pie. There's a lot in play, and at stake.

Amazon and Apple are hoping to create preference for their devices (Kindle, iPad) and ecosystems of ebook stores and supplier relationships.

The suppliers -- big publishers at this time -- are trying to prevent the collapse of their primary competitive advantage: their supply chain.

Want to know what's going to happen?

Amazon will continue to build relationships with their customers by working, primarily, to keep convenience high and prices low (that's their nature). Mind you, they'll certainly try to keep up on the tech front.

Apple will leverage the relationship with their customers by continuing to innovate on the product front, while developing relatively high margin relationships with partners (it's in their DNA).

Big publishers will exert their supply chain power to slow the collapse of their legacy model (they can't help it). 

And out of nowhere, entrepreneurs will spring forth with new business models that will offer unique bundles of value for both authors and readers. Perhaps an ebook/content model similar to cell phone contracts (sign up for two years worth of content at x dollars per month and get the reader free).

The evolution of the ebook market (which is the future of books) is going to be exciting to watch, as well as a strategic study in marketplace transparency, supply chain disintermediation, pricing, and innovation.  The winners will be those who emerge with a superior bundle of value for the two primary players of the value exchange game -- authors and their fans. 

And price, as always, will be a signal; a function of expectations, scarcity and value. If a book's value is enhanced via an ebook platform experience, the price will be higher than its physical counterpart not lower.

The Hole in the Soul of Business

That's the title of a recent blog post by management author and consultant Gary Hamel. He blames this hole, which "bleeds the vitality and enthusiasm out of people at work," on a "paucity of purpose."

Near the end of his rant, Hamel quotes the Austrian neurologist and concentration camp survivor Viktor Frankl from Frankl's life-affirming book "Man's Search for Meaning:"

“For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended consequence of one’s personal dedication to a cause greater than oneself . . .”

"A cause greater than oneself." 

Many today would lead you to believe that the road to success is to make oneself "the cause," through the pursuit of celebrity, power, influence and money. And that may be true . . . for you. If so, God speed. But please spare the people you work with, spare us all, and go it alone.

People are not inspired by your pursuits or your status.  They're inspired -- and come to life -- by their pursuits. They want their work and their lives to be stimulating, meaningful and to make a difference to others.

Lately, I've had many candid conversations with friends and associates who are leaders at well-known firms. And without exception, they are losing their passion and spirit. In fact, their psychological reactions to their work environments remind me of what Frankl found in the concentration camps:

1. Shock at the situation;
2. Apathy after becoming accustomed to organizational existence, in which the inmate values only that which helps himself and his friends survive; and
3. Reactions of depersonalization, bitterness, and disillusionment if she survives.

Nietzsch wrote, "He who has a why to live can bear with almost any how."

Without a why -- a why to reach and stretch, a why to proffer ideas, a why to treat customers and coworkers with love and respect, a why to go the extra mile, a why to be committed to excellence, a why to go to work in the morning -- all the hows, whats, whens, and what fors, become empty rhetoric.

Worse, they come to represent the inmates' situations; to be tolerated and gamed for the survival of themselves and their friends.

Leaders: Please wake up before it's too late.

P.S. You know it's getting bad when "happiness coaching" appears in the workplace.

"I don't know what your destiny will be, but one thing I do know: the only ones among you who will be really happy are those who have sought and found how to serve." -- Albert Schweitzer