Page 253 - Toyota Under Fire

TOYOT A UNDER FIRE

express the True North for the country. The Toyota Way func-
tions in the same way for Toyota, with its True North of excel-
lence and service to society. Thus, when the weaknesses in the
company were exposed, there was a clear guide and will to right
the ship.
Akio Toyoda often cites Jim Collins’s book How the Mighty
Fall to remind listeners that Toyota is not immune from mistakes
and problems; without constant vigilance, the company is in dan-
ger of a downfall. Collins’s model of downfall has five stages, sev-
eral of which could be applied at some level to Toyota in the lead-
up to the crises: hubris born of success; undisciplined pursuit of
more; denial of risk and peril; grasping for salvation; and capitu-
lation to irrelevance and death. The fourth stage of the model de-
scribes the steps that many once-successful companies take when a
crisis strikes deep: making a big acquisition in an attempt to
transform the business at a single stroke; embarking on a program
of such radical change that the business’s underlying strengths
are forgotten or abandoned; destroying momentum by constant
restructuring; pinning hopes on unproven strategies, such as
dramatic leaps into new technologies or businesses; or hiring a
visionary leader from the outside who has little understanding of
what made the company great in the first place. That fourth stage
is where Toyota’s actions diverge from Collins’s model. Those are
the actions of a company that does not have, or does not have
faith in, a strong culture. Toyota did not do any of these things.
What Toyota has done is follow the recipe that Collins advo-
cates: old-fashioned management virtues such as determination,
discipline, calmness under pressure, and strategic decision mak-
ing based on careful sifting of the evidence. He suggests that the
leader who is best able to halt a downward spiral will be an in-
sider who knows how to build on proven strengths while simul-

222