Why Toyota needs to refresh its culture

Toyota is headline news this week for all the wrong reasons. It is accused of putting profit ahead of people, not just people but customers and their safety, the ultimate business sin. It has been described as slow moving, secretive and perceived as trying to cover up problems rather than address them head on.

It points to a number of cultural problems that appear to have developed as Toyota has grown aggressively on the back of what has been a very successful market-driven strategy which involved putting customers at the center of their business and constantly innovating and improving quality. In fact Toyota has been until very recently held up as a great example of what the Detroit manufacturers should have been doing all these years.

So what went wrong?

At some stage poor decisions have been made that have resulted in a very serious problem developing known as unintended sudden acceleration (Lawyers even have a website dedicated to the problem….). What happened at Toyota to create the environment that made those decisions possible? Was there a subtle shift in the focus from customer first to growth/be number 1 in car sales? Did this cause additional pressure to cut costs to reach price points that would drive volume?

We won’t know for sure but certainly something has gone wrong in a major way and it has been going wrong for a number of years by the many accounts from customers of these problems surfacing as long as 2006/2007 see this video testimony from a Lexus customer today

CEO, Toyoda will need to redouble efforts to revitalize Toyota’s old strong customer first culture to make sure he does not reinforce the culture that created these unprecedented (for Toyota) and very damaging customer and PR issues.