TOYOTA UNDER FIRE

TOYOTA UNDER FIRE

Lessons for Turning Crisis Into Opportunity

     In Toyota, the capital really is the human.  Machines can be replaced quickly, this people are the largest bucket of appreciating assets in Toyota.  Toyota faced three crisis which caused them to be under fire, that is:
            i. The Oil Crisis (2008)
           ii. The Credit Market Crisis (2008)
          iii. The Recall Crisis (2009-2010)


     Toyota overcome the crisis by analysing the oil and credit market crisis, and by falling back on organizational culture.  Toyota’s culture can be clearly seen in
i. Toyota Business Practices (TBP).  TBP lays ant 8 steps that is
   Action     Steps
   Plan     1. Define problem relatives to idea
              2. Break down problem into management pieces
              3. Identify non causes
              4. Develop alternative solution
              5. Evaluate and select best solution
   Do       6. Implement solution
   Check   7. Check impact of solution
   Act       8. Adjust standardize and spread based on what has been learned
ii. Toyota way.  The two (2) pillars of Toyota way are respect for people and 
    continuous improvement. This two (2) pillars rest on five (5) core rules that 
    are:

    a. Spirit of challenge – willingness to tackle though problems at work at 

        them until they are solved.
    b. Kaizen mind – Mandate to consfaunty improve performance.  They are 
        two (2) types of Kaizen mind:
                         -  Maintenance Kaizen – reacting to
                         - Improvement Kaizen – includes the idea of perfection
    c.  Genchi Genbutsu (Go and See to Deeply understand).  Two main aspect 
       of this core value are
       - Decisions are made based on observed facts about the issue
       - Decisions should be print into the hands of those who are closest to 
         the problem
    d. Teamwork – which is drill into the promotion process and incentives for 
       performances
    e. Respect
 iii. Response and Recovery
     Phase 1:  React

     Phase ii:  Contain
     Phase iii:  Turning the Crisis into the Opportunity          


     The way Toyota response to the crisis has been embedded through Toyota way since the company began that is the Spirit of challenge, Respect for people, Genchi Genbutsu (go and see to understand), Kaizen mind, Teamwork, and A never ending cycle (Caring for customer - Recognizing problem - Taking immediate action - Following through to be sure customer concern were solves).
     Taking responsibility and solving problems in encouraged.  Thus expecting the company to do a better job of listening to customers and building trust.  Massive investment is required in order for everyone to learn and internalize the culture.  In globalizing culture, Toyota has to trust the leader’s to trained or the whole system won’t work.  The dedication to continuous improvements makes crisis become less an obstacle.
     Toyota to come up with the Guide: Our Attitude which includes Customers first, Challenge, Kiazen, Genchi Genbutsu (go and see to understand), Shitsujitsu goken (use money and time wisely and avoid waste), Teamwork, Ownership and responsibility, Humanility and gratitude, Integrity, and We love Toyota (joy and pride from working for Toyota).
     A strong corporate culture is an intangible asset and considered to be the key strategic resources.  It is also a source of sustainable competitive advantage.  Corporate culture is built over the times and emerges from a history of interactions inside and outside an organization.  It begins with a set of values and shaped by the action and choices of leaders at all levels.  Toyota’s approach to excellent was based on a philosophy and culture known as Toyota Way that demands:

   i. Commitment to culture and philosophy on continuous improvements;

   ii. Respect for people;

   iii.Contributing to society; and

   iv.Putting customers first

     Managers in Toyota’s are expected to be teachers and develop in their student the art of continuous improvement.  All employees are highly valued and respected in Toyota. Toyota’s strength are the continuous improvements, investing in people and trusting the people to find and implement solution that could cut costs and also improve quality and productivity.

     It was proved that turning crisis into opportunity is actually all about culture.  Toyota’s containment philosophy 'to apologize and take responsibility' really helps to rebuild Toyota’s reputation for putting customers first which also turned energy of employees towards continuous improvements.