New Toyota vs. Old Toyota – It’s All About Soul

I was recently sent a blog post by Peter De Lorenzo, “The AutoExtremist”, on Toyota’s recent recall woes, or as Peter put it: “Toyota’s got trouble alright…Trouble with a capital ‘T’.”

Let me share a few paragraphs:

“The harsh reality for Toyota is that it went too far overboard in striving to become the biggest, baddest car company on earth. And in the course of their quest they literally abandoned damn near everything that got them to the point of being a true corporate juggernaut to begin with.

The Toyota “Way”? It went right out the window as soon as they started planning new assembly facilities at the same time they were still finishing plants that weren’t even up and running yet. The “old” Toyota would never do that. The “old” Toyota would take their sweet time in making sure that a new facility was every bit as focused and dialed-in as their best facilities. If it wasn’t, it simply didn’t open until it was.

But the “new” Toyota started skipping steps and compressing timelines. And the details started slipping through the cracks. People – engineers, managers, manufacturing types – were schooled in the Toyota Way, but in the company’s breakneck, accelerated pace to eclipse GM as the world’s largest automaker it didn’t sink in. There simply wasn’t enough time to let it sink in either.

Communication broke down, both internally in Japan and externally to the troops in the U.S. The Toyota Way wasn’t the focus of the organization any longer. Classic Toyota descriptors such as “quality,” “reliability” and “durability” were replaced with words like “units,” “volume,” “production plan acceleration” and “domination” of markets.”

In today’s world, it does seem that many companies share the “bigger is better” philosophy. The faster one can grow the company, the better it will be for everyone. This is the attitude fostered by the “machine of production” paradigm where everything is measured in relation to dollars and volume.

The “new” Toyota, with its extreme focus on growth using metrics of volume and size killed the very thing that made it a great company – it lost its Soulful Purpose. The Toyota Way, like the HP Way, represented more than just a slick set of phrases or plaques hung on the walls. It was a symbol of something that was deeply felt at the very core or soul of the organization, and passed on like DNA generation after generation of managers and employees.

We are all for growth, and even accelerated growth, as long as the organization stays focused on its Soulful Purpose and ensures that this is at the center of everything it does. How fast is too fast? When growth is at a rate where it can no longer be effectively passed on to each new hire, carried out in each decision made by every manager, then the organization is simply growing at a faster rate than it will be able to sustain in the long run.

There is no one right rate of growth for every organization. The right rate of growth is strictly determined by how effectively it can propagate the Soulful Purpose to every new generation of employee. Companies undergoing large growth or expansion initiatives should heed Toyota’s recent downfall and take a very close look at their core values, ensuring that a “practice what we preach” philosophy remains intact at all levels of operation.

Is your culture one with purpose? Do all you employees agree on the culture. Download a free Cultural Assessment Tool and find out. CLICK HERE to download.

If you enjoyed this article consider joining our LinkedIn group How to Hire and Retain Top Talent. There are an extensive amount of resources on this topic. CLICK HERE to join.

To learn more about an organization’s Soulful Purpose and The Living Organization model, visit www.quantumleaders.com or download a white paper here.

- By Norman Wolfe, CEO Quantum Leaders, Inc.

Improving Bottom-Line Results: Applying The Living Organization® Model

We often hear from our clients, colleagues, and online audience: “Your model really resonates with my experience of business and it seems to help explain that which is often hard to explain, but does it produce real results?”

Of course, the results business leaders are talking about are the impacts to their organization’s bottom line. The question really is, “What can I expect in terms of increased revenue, lower expenses, higher profits and increased shareholder value by applying your model?

This is an extremely important question and one I will endeavor to address concisely here. (For those who are not familiar with The Living Organization® Model click here to download a short white paper).

First, let’s acknowledge that business is a time-based game. By this, I mean that time is a critical factor in determining successful results. Growing from $80 million in revenues to $200 million in 20 years is a far different level of organizational performance than achieving that same growth in just 3 years. Delivering an innovative new product to market in 6 months yields a better result than achieving that same goal in 24 months.

In other words, time is a critical dimension in producing bottom-line results. Basic results measures such as Return on Investment (ROI) incorporates time as one of the key variables in its calculation.

So, anything that reduces the time it takes to achieve desired goals will improve the bottom line. As one of our CEO clients has noted, “your model helps me increase the velocity of execution and that is why we are adopting it.”

What did he mean by “increase the velocity of execution” and how does The Living Organization® Model do that?

A company’s success is determined by the production and delivery of goods and services that are desired and adopted by the market it serves. A company’s strategy is a roadmap of how it plans to accomplish this objective. It consists of the organization’s understanding of the market, its vision of how its unique contribution will best serve the market, and the specific tactics and initiatives it needs to execute to realize its vision, goals and objectives. Therefore, the bottom line results will be determined by two factors: 1) how well the company has defined the right strategy, and 2) how well the company then executes that strategy.

At Quantum Leaders, we believe that execution is the more important of the two factors. A mediocre strategy that is well executed will out-perform an outstanding strategy that is poorly executed. Why? Because a well-executed strategy achieves its goals and objectives faster, or said another way, velocity of execution is increased.

What does it take to shorten the time to achieve the desired goals?

To achieve our goals we must take into account all the variables and forces that will either hinder our progress or propel us forward, minimizing the former and maximizing the later. We must understand all the forces impacting our ability to achieve our desired results, just as a ship’s captain must know how to power and maneuver his boat amid the invisible forces of wind and current.

What if the ship’s captain did not understand the way in which the forces of wind were impacting the ship’s progress? How quickly and effectively would the captain be able to arrive at the desired destination? How effective would you be if you did not understand – or were not even aware of – the invisible forces impacting your execution?

There are many forces impacting an organization’s execution. Some of these are easily identifiable such as those in the Activity field. But like the wind and the current, the forces in the Relationship and Context fields are not readily observable. Without a tool like The Living Organization® at your disposal crucial factors invariably remain in our blind spot. Simply put, we cannot improve what we cannot see.

The ARC Framework™ component of The Living Organization® model makes visible what has been heretofore mostly invisible. This tool maps the fields of Activity, Relationship and Context to the domains of Leadership, People, Process and Markets that allows us to better understand, identify and manage the flow of energy across the enterprise. With our tools, the organization’s leadership can more effectively diagnose the factors impeding execution. They can identify the clogs in the flow of energy within the organization, and develop specific actions to remove them.

In essence, when all the potential barriers to success have been laid bare before you, the shortest and most optimal path to reaching your goals becomes clear. You are therefore able to more quickly identify the most efficient roadmap to reach the desired goals, address all critical problems along the way and thereby increase the speed and efficiency of strategy execution.

The Living Organization® Model and the ARC Framework™ increases the velocity of execution, thereby improving your bottom-line results. It’s that simple!

This is the first in a series of installments on The Living Organization® Model. Be sure to read the next few weeks’ posts, in which we highlight specific applications of The Living Organization® within our clients’ companies, and the specific results they have achieved as a result!

About the Author:

 

Norman Wolfe, founder of Quantum Leaders, Inc., has spent over 35 years working with a variety of organizations from technology start ups to Fortune 500 companies. He is a published author, professional speaker, and leading expert on executing corporate strategy.

Norman is the creator and author of The Living Organization® – a breakthrough new business model designed to help today’s leaders understand the dynamic forces underlying business success and failure in the 21^st century. Today, he continues to write and expand upon The Living Organization’s® series of featured products, assessment tools, and books. Download a free white paper here. Visit www.quantumleaders.com for more information about Norman and Quantum Leaders.