Of course, management always thinks process is for those “beneath them.” It’s hard to imagine anyone of “Director” rank or higher (never mind the VP level) submitting to having their own work and decision-making influenced by process guidance, except with respect to production quality principles.
But Outside-In is process of a different color. It can and sometimes does provide management guidance for decision-making affecting customers. On more than several occasions C-level execs have adopted our O-I mantra – “Adding value to customers in ways that add value back to the company.” And when they start saying it, they start thinking it – especially when we’ve managed to involve them in a strategic planning process designed to produce customer-centric outcomes.
Driving this question is Toyota – which would have a much brighter near to mid-term future had a pervasive, customers-first process culture guided strategic planning and strategic decision-making, both of which became progressively more customer-insensitive over the past 10 years (at least). And despite those saying Toyota has only to straighten out production to rebound, I don’t think they’ll get much bounce without changing a culture that supports hiding known mechanical problems from customers (and regulators), which resulted in destruction of life and property.
But do you believe that a customer-first process culture – especially one that identifies customer needs, preferences and opportunities before going to literal “process”- can penetrate management thinking on a widespread basis? And if “yes,” what will it take?
Hi Dick
I have refrained from commenting on your various posts attacking Toyota for its current ills. But this post provides a good opportunity to correct a few misconceptions about Toyota.
Toyota’s current problems stem not from the Toyota Production System, nor from Lean Thinking, nor from its Toyota Way culture. As The Economist pointed out in its leader and a longer article on February 11th, Toyota’s problems are largely those of governance, particularly in the Japanese parent company. Toyota has handled the multiple recalls appallingly, with senior Japanese management going missing for far too long, particularly at the start of heated press coverage. And Toyota has rightly been pilloried for it.
As you know, I have both consulted with and worked for Toyota over a number of years in the past. I leaned more from Toyota about hands-on customer-centricity in those few years, than I had done from working with some of the biggest names in auto manufacturing, telecoms, financial services, aviation and utilities in the previous 20 years of management consulting. Of all the auto manufacturers I have worked with, including a number of the majors, none had anything like the customer-centricity that Toyota has. I never had meetings in the other manufacturers specifically to talk about what customers valued during a dealership service contacts. Or about how to give customers the tools to pull value through from the dealer on-demand. Or to pore over independent customer satisfaction reports looking at ways to increase value for customers. I did at Toyota. And these meetings were with ordinary staff responsible for putting improvements in value delivery into practice, not just management.
Toyota does have serious problems with the recalls, anyone can see that. And Toyota’s Japanese management has been found badly wanting. Nobody would deny that either. But the problems are largely those of governence, rather than about how Toyota runs its daily business. We will have to wait and see just how Toyota uses its own Kaizen methods to improve itself.
My current Toyota has over 165,000 miles on the clock. In that time I have had zero problems with it; no breakdowns, no niggly defects, not even a warning light. My next car will also be a Toyota. Not out of loyalty to an ex-employer, but because it will be one of the best cars on the road. Period.
Graham Hill
Customer-centric Innovator
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It seems that the threads on Toyota have taken two positions – 1) its a failure in PR and management and, while bungled, should blow over, or 2) its a bigger long term failure in that they lost their focus on the customer and chose to focus on growth leading to quality issues, destroying customer loyalty.
Given the documented leadership Toyota has had in instilling a customer focus throughout the organization, its hard to see this issue as sudden company-wide break down in customer-centricity. However, its also hard to see this as only “bungled PR problem”.
What resonated for me was seeing ABC News, posing as a customer caller to a Toyota CCR and the rep bungling the call in a big way. I can only imagine the thousands of calls repeated like this each day, making the customer base even more unsure. And what is the dealer network doing? More mixed messages?
Even the most well run PR campaign does not have the ability to fix these types of front line customer issues (which ironically was also broadcasted on national TV). And, IMO, “PR only” approaches are legacy ways to manage issues like this. PR increasingly is not effective in isolation when the “mass media” channel is shrinking in importance, and is only one out of many customer touchpoints for evaluation.
But, at the same time, its a major stretch to say their current issues means Toyota has lost their company-wide focus on customer-centricity… that’s huge jump IMO. It’s been central to their company strategy as Graham mentions. Moreover, to my knowledge, it does not seem that there were other indicators that they “took their eye of the ball” on customer-centriciy in recent history.
However, I am not a Toyota analyst, so if there are more data points to show that this indeed has been a growing trend inside Toyota, then that argument holds up, and the recall storyline weaves into this narrative.
But if this line of argument is solely based on the recall, then that’s really not sufficient to make sweeping claims about Toyota’s loss of customer centricity.
Sean
I heard on BBC radio a similar story of a TV reporter trying to catch Toyota out in the UK. The reporter talked to customers waiting for their cars to be repaired at a dealer as part of the recall. The big differenece was that no matter how hard the reporter tried, customers were loath to criticise Toyota for what has happened. Yes, they were inconvenienced. But no, they didn’t feel their safety was in danger. And no, they weren’t unhappy with Toyota either. Strange thing cognitive dissonance!
You might be interested in Jamie Flinchbaugh’s excellent roundup of commentaries about Toyota and the recall problem. He points out that we currently do not know the root-cause of the recall problems, nor what countermeasures Toyota will put in place to fix them.
Jamie Flinchbaugh
The Fall of Mighty Toyota
http://tinyurl.com/ye7ynz5
Graham Hill
Customer-centric Innovator
Follow me on Twitter
Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.
Graham – forgot the link: http://hbswk.hbs.edu/item/6201.html. I’m sure you’ll find it interesting.
Graham – “forget” the link? I don’t know what the hell I was saying, but I hope you’ll click the link and read the piece. I suspect you’ll agree with it.
As far as Toyota goes, I do respect your loyalty to Toyota, and perhaps I’ve thrown a bit of a red flag in front to you. But you’re missing my points on two key counts.
First, I absolutely agree that TPS and Lean bear no responsibility for Toyota recalls, except in the sense that Toyota partially abandoned them by expanding manufacturing and especially engineering beyond its span of control. However, contrary to response to my several posts here and elsewhere about Toyota, TPS and Lean alone do not institute customer-centric thinking at the management level. Outside-In does when fully implemented, because O-I is a fusion of strategy and process. That’s why I bring up TPS and Lean.
Second, I’m paying less attention to the damage the quality issue will cause Toyota with customers (which is already appreciable here in the U.S. because of all the deaths that have occured) than to the damage cause by management failure to deal honestly with the consuming public. It’s true Ford did as badly during the Firestone tire problem, but the public’s expectations of Ford were so low that customers mostly shrugged off the whole situation. The U.S. market’s expectations of Toyota are so much higher (sort of a Tiger Woods scenario), that the backlash is already far stronger than directed at Ford and will get worse, I suspect much worse, because Toyota continues to let the bad news drible out a revelation at a time.
Kind regards,
Dick
Thanks for the mention and link to my blog post.
Jamie