Page 19 - Toyota Under Fire

PREF ACE

remarkably quickly. Even more noteworthy, it turned these cri-
ses into opportunities to further the company’s long-term goals.
There’s a widely held belief, often cited in business man-
agement circles, that the Chinese pictogram for the word crisis
is made up of characters meaning “danger” and “opportunity.”
This is certainly a comforting thought for managers who are fac-
ing hard times—that the dark clouds have a silver lining. Un-
fortunately, both literally and figuratively, this belief is a myth.
The meme about the Chinese character was started by a manage-
ment consultant who had been studying Chinese for only a few
months and as a result misinterpreted the characters. The idea
that a crisis is an opportunity is belied by the many businesses
that have only just scraped along during the recession, having
slashed jobs and investment in their future.
In fact, as John Shook warned me, looking at Toyota through
rose-colored glasses distorts the facts. The company did suffer
from the recession in the form of financial losses and from the
recall crisis both financially and in the form of loss of reputation.
When Toyota executives looked hard in the mirror, they found
some serious weaknesses in the company that had developed as
the company grew rapidly. Most important, they found that they
had lost the intense focus on understanding customer concerns
that had defined the company for most of its history. When cus-
tomer concerns were identified, it took too long to respond, as the
company had grown into a large global company with too much
bureaucracy. The bureaucracy and some decision making isolated
in Japan had also fueled the recall crisis and slowed Toyota’s re-
sponsiveness to legitimate complaints by customers and the U.S.
government.
Our investigations, and increasingly the data, suggest that as
a result of facing these problems with brutal honesty, Toyota has

xviii