Tuesday, February 23, 2010

Causality and the Toyota Recall

Toyota has been under fire lately with its never ending recall notices.  The President of the company commented today saying,

We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that

 I cannot figure out what that means.  I think what they are saying is that the recalls are because of Toyota's speedy growth. However, the real truth is that Toyota failed to stick to its quality standards and messed up.  There is no universal rule which says quality needs to suffer with an increase in size.  Toyota flinched from its legendary focus on engineering and design and probably sought to keep its costs low.  

Further, it is also clear from the memos that came out yesterday that its North American executives were more intent on misleading NHTSA over negotiating recalls rather than focusing on their core values - good engineering and reliability.  I am sure a bunch of lawyers also made money convincing Toyota's leadership that money can be saved by "convincing" NHTSA rather than try and address a design problem.

Toyota's case will probably be unique in automotive history. It stands naked and no longer invincible - not because it could not make quality cars, but because it chose not to.

3 comments:

Jayarama Krishnan said...

I think what the President has said makes sense and tries to go to the core of the problem - that they focused just on growth, without paying heed to the development of the organization and the people in the organization - the enablers which drive sustainable growth.

Not focusing on the organization reduced focus on its core values of quality engineering. Not focusing on people led to losing focus on the enablers of quality engineering - a good dedicated workforce / engineers.

And per the president, that is the problem. They forgot to water the plant while plucking the fruits. And some time later, when the fruits were withering, someone (the lawyers) told them that they could probably hide the rot and continue to sell the rotting fruits, rather than water the plants.

So in that sense, what the president admits only corroborates what you're saying, and I feel is good in the sense that the problem is atleast identified.

Now to address it. Easier said than done!

Anonymous said...

You wrote, a bit harshly I thought, "It stands naked and no longer invincible - not because it could not make quality cars, but because it chose not to." While I agree with you that there is no 'universal rule,' "There is no universal rule which says quality needs to suffer with an increase in size," the point is that quality DOES suffer. The focus shifts to growth and other values, once precious shibboleths, are forgotten. The lesson we learn from this incident is that no one can lower their gaurd- not even the invincible Toyota.

Girish Mallapragada said...

Point taken. What underlies the debacle is probably best understood by what the Red Queen told Alice - "if you need to stay in the same place you need to run, if you want to move ahead, you need to run faster".