The Toyota Way

TOKYO, JAPAN – In a decade of crisis management and corporate deniability, many companies are prone to play the blame game, sweep things under the rug, or resolve problems on a hush-hush basis.

But what should a company do when the problem is as large and as noisy as an elephant?

In the case of Toyota Motor Corporation, the problem was not only about the elephant in the room but the circus that followed it, no thanks to international media and politics.

As a company known for quality and safety, Toyota’s corporate serenity was seriously disrupted by a series of quality and safety issues that occurred in increasing numbers and gravity beginning in 2009.

In response, company officials in the affected areas in America and Canada instituted recall proceedings for specific vehicle models to avert further risks and to correct the problems.

Unfortunately the recalls were immediately picked up by western media and subsequently turned into a matter of political interest in the United States where homegrown US automakers were closer to bankruptcy and in dire need of government bailouts.

For the first time since the giant automaker came to being, they had very serious problems. After the embarrassing recalls that affected sales in the US, their President Akio Toyoda was formally asked to testify in front of a US Congressional Committee investigating the safety issues.

What Mr. Toyoda said to the committee and to their worldwide market was certainly uncustomary, but what is very interesting is how the entire organization immediately put into action what their leader had verbalized.

On February 24, 2009, Mr. Toyoda candidly expressed his sentiments at the US congressional hearing by saying, “All Toyota vehicles bear my name. For me when the cars are damaged, it is as though I am as well. I more than anyone, wish for Toyota’s cars to be safe and for our customers to feel safe when they use our vehicles.”

Mr. Toyoda also confronted their fault head on by adding, “We pursued growth over the speed at which we were able to develop our people and our organization and we should be sincerely mindful of that.”

What may have seemed like a polite apology for cynics turned out to be a company directive of the President that was to be acted upon the Toyota way.

Within a month, the global leaders of Toyota Motor Corporation gathered on March 30, 2009 to establish their Special Committee for Global Quality. Mr. Akio Toyoda personally took charge as Chairman and brought in senior quality control experts representing Toyota in North America, Europe, China, Asia Pacific, Middle East, and South and Central America.

In sum total two major conferences were held with a total of 150 company officers and experts in attendance.

Emphasis was placed on Early Detection Early Resolution or EDER. Moving away from the mind set of organizational dependence the committee placed a new emphasis on customer engagement.

Since then, Toyota has placed priority on enhancing information research by investigating and analyzing actual customer vehicle on site. Aside from the standard technical support people in the area, Toyota has also assigned 40 Safety Engineers as part of their global response team to investigate or analyze any reported safety issues worldwide.

Rather than traditional reliance on dealer information or data, the new policy is for Toyota to prioritize customer information or reports on quality or safety concerns since in the end the customer really knows best.

From a history where vehicles were evaluated based on engineering standards, the new philosophy shifted product evaluation towards how customers actually use their cars. This, in effect, will now create a car that considers a wider range of users as well as their actual environment and not just engineering design data.

To address the safety issues head on, Toyota has also extended the time or how long test vehicles undergo evaluation, as well as adding even more test vehicles in order to increase the probability of discovering any possible concerns.

Veering away from the dependence on the exclusive opinion of engineering and product development experts, the company has now incorporated a product quality audit, based on customer inputs and satisfaction. In addition, there is a current move to harness more external sources of expertise to validate if the company and its directions are in sync beyond the company facilities.

To further increase their information gathering regarding quality concerns, a new information technology group has been tasked to monitor and submit all data to the concerned department.

From Early Detection, the next order was Early Resolution or addressing any and all problems concerning quality and safety immediately. But rather than making remedies, the Committee for Global Safety has also instructed their quality and safety officials to input all information to their engineering and development process.

In so doing the solutions can then be incorporated to product development and insure that such problems no longer occur in future or in similar models.

Having reaffirmed the sentiments of their leader’s concerning the importance of their customer’s sense of safety and expectations of quality, Toyota quickly moved to address the issue of developing the organization and their people.

In the past, the management model had a ratio of one team leader or manager to 10 team members, in the new model the Committee for Global Quality has one over all leader on top of two new team leaders who each has 5 team members. In other words the new ratio is 1:2:10. More attention and investment has also been made for OJT or on the job training.

If Toyota’s actions now speak louder than words, nothing could be louder in reaffirming their commitment to quality and safety than their decision to dedicate additional man-hours from 1,000 employees towards quality innovation activity and assigning an entire division to be dedicated to “Design Quality Innovation and Development”.

Having done all these and more, Toyota recently did something that even veteran motoring journalists claim it has never been done before. The company actually invited and opened different laboratories and facilities that used to be restricted access especially to the media.

In hosting the Asia Regional Journalist event, Toyota showed members of the media what they have put into work in terms of improved technology as well as attitude.

Journalists experienced the use and purpose of their high technology simulator used to study various driver habits and responses. I can proudly say that only our designated driver Tito Hermoso passed the test without killing a pedestrian or running over a motorcycle.

We saw close up crash test dummies that cost 8 million yen a piece, because they were so sophisticated they could simulate fractures, brain injuries or damage to internal organs.

While the simulator test may have been the funniest as we watched fellow journalists “kill” pedestrians, the most traumatic exercise for the Pinoys must have been the actual off-set head-on 140 km/h collision test between a brand new multi-million peso Crown Magenta versus a Yaris.

Imagine destroying two brand new cars just to make a point!

As expected, the Yaris got yari by the crown, but as predicted, the dummies in both cars showed no damage, the doors of both cars immediately opened and proved that even at 140 km/h, when safely strapped, you’re safe in a Toyota.