Page 231 - Toyota Under Fire

TOYOT A UNDER FIRE

We’ve attempted to engage in hansei from an outsider’s per-
spective to draw lessons for others from Toyota’s experiences over
the last three years. What did Toyota do right, and what did it
do wrong? What mistakes did Toyota make that contributed to
the crises? What drove positive responses, and what opportuni-
ties were missed? What can others learn from Toyota about crisis
management and turning crisis into opportunity?
One conclusion rises to the top: turning crisis into oppor-
tunity is all about culture. It’s not about PR strategies, or char-
ismatic leadership, or vision, or any specific action by any indi-
vidual. It’s not about policies or procedures or risk mitigation
processes. It’s about the actions that have been programmed into
the individuals and teams that make up a company before the cri-
sis starts. In our estimation, Toyota’s most important decision in
handling the recession crisis was to keep a conservative balance
sheet, lots of cash on hand, and an excellent credit rating during
the boom years before the recession. Toyota’s financial position
was what allowed it to keep investing in people and processes
even while it was operating at a $4 billion loss. The most impor-
tant decision for the recall crisis was not to lay anyone off during
the recession, but instead to take that time and invest in devel-
oping people and deepening the Toyota Way culture. The only
big decision that Akio Toyoda had to make in approaching the
recall crisis was to go “back to the basics,” acting on and further
deepening the Toyota Way, a process that had already started in
many parts of the company during the global recession. The deci-
sions that made the most difference during the crises were made
well before the crises took place. These decisions weren’t hap-
penstance, luck, or the insight of a particularly wise individ-
ual. They were reflections of how Toyota has always done busi-
ness. They were a reflection of culture.

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