Page 42 - Toyota Under Fire

THE MOST ADMIRED COMP ANY IN THE WORLD

As management thinkers like Peter Drucker, Tom Peters, Jim
Collins, and Peter Senge have demonstrated in their research and
writing over the years, achieving consistent excellence is extraordi-
narily difficult and rare. Excellence, where it does occur, is a result
of culture rather than just processes. Every company and every pro-
cess is subject to the laws of entropy—things simply degrade over
time. That can happen because people grow complacent or because
circumstances change and yesterday’s solutions no longer apply in
today’s context. For many companies, performance declines as a
company grows beyond its founders and their passion.
The only way to combat the pervasive disease of entropy
is culture—building an organization that constantly renews its
commitment to excellence and to its core principles, an organiza-
tion that can instill those principles and the founders’ passion in
each new generation of employees and leaders.
As demonstrated by its remarkably consistent growth and
profitability, Toyota has built a culture that does exactly that. For
most of Toyota’s history, that culture was not formally codified
or given an official name. It was simply handed down from em-
ployee to employee—a process that was possible because all of
Toyota’s leaders had spent their entire careers at the company.
The model for training was the master-apprentice relationship.
As Toyota grew globally, though, spreading the culture one-on-
one with daily mentoring was not enough. There simply were not
enough master trainers who had grown up in the culture avail-
able for all the new hires. In 2001, then president Fujio Cho, a
student of Ohno and the first president of Toyota’s Georgetown,
Kentucky, plant, introduced the document formally defining the
Toyota Way. This wasn’t a new direction for Toyota; it was a codi-
fication of the culture that had been created by Sakichi and Ki-
ichiro Toyoda and extended by leaders like Taiichi Ohno.

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