Saturday, October 29, 2011

Economic Woes Affect Even the Most Entrenched Corporate Culture

I recently finished reading Jeffrey Liker's The Toyota Way. It's a very interesting look inside the company and process that has had many a corporation, big and small, trying to emulate Toyota's success, whether in manufacturing, or other industries. From a performance improvement perspective, the book's exposition on Toyota's culture and worldview makes an engaging case study.

One of the key points I readily recall from the book is Toyota's relationship with its suppliers. As a company, Toyota has typically taken a constructive, bridge-building approach that essentially brought their suppliers "with" them on their manufacturing journey, so to speak. If the supplier could not fulfill a need, Toyota would help them improve to meet that need, as well as adopt Toyota's 14-point process and outlook. In contrast, Toyota's other competitors, particularly the Big 3, took a carrot-and-stick approach to suppliers, acting punitively if problems arose.

It seems though that the economy is forcing even Toyota to start taking a harder line, as outlets like Autoblog and Autoline are now reporting that the company has taken to acting more like its competitors. Granted, Toyota's situation has not been good as of late, what with the tragic earthquake in Japan this past March, which appears to have hit Toyota's business more so than Honda's or Nissan's. Add to this the global economic woes, and perhaps the change in tune is to be expected. But, this seems to have been in the works for at least the last couple years now.

Nevertheless, it is disconcerting to see a company so known for its uniqueness amongst large manufacturers to be changing its tune, particularly since their human performance legacy has been one of remarkable success over the last 40 years.

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