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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

Posted February 24, 2010
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