The ongoing Toyota fiasco and investigations is an interesting case study from which all organizations, and especially your own staff can learn a lot about how we run our projects, products & business.
Stated briefly the issue is that there was unmitigated acceleration in several Toyota cars and models - so when the accelerated pedal was released the vehicle did not decelerate but kept accelerating on.The issue led to atleast 2200 car crashes and 26 deaths according to reuters - http://www.reuters.com/
While we have got used to such numbers and statistics here is the actual traumatic , fatal 911 call of a lexus that led to the discovery of Toyota's massive cover-up.
For Toyota the issue has led to huge recalls around the world - Atleast 12 million cars are expected to be affected according to some sources leading to expenses of billions of dollars for Toyota. Toyota stock price will be driven down and so the company's worth will go down with it.
Toyota has to face the music in the US , China, Japan , elsewhere and has had to face government investigations. It will also now have to face numerous and costly litigations. Brand has taken a hit and that has long term implications.
Here are 3 questions , pertinent to running our own businesses :
1) Was Toyota Corp in denial mode ?
Toyota had clearly been in denial that such a 'bug' existed. It even deflected agency investigations about the issue. This issue had been happening atleast since 2002 : for 8 years they had been able to deny the bug while damage was being done !!. Often accident victims were blamed by Toyota for their driving, instead of the product. In other words it took 2200 accidents and 26 deaths for Toyota and the government departments to wake up to what maybe happening. If they had not been busy denying and looked into the bug earlier would it have saved them the billions they are forced to spend now ?
2) Quality was made-up :
The fact that quality had been overruled in the company was given away when Mr.Toyoda, the president of Toyota Corp, immediately restructured the quality department to report to him directly. Who was the quality department reporting to till then ? And its not too difficult to guess what kind of reporting they must have done.
When sales imperatives or project management take precedence over quality usually disaster is waiting to happen ( hello subprime crisis !). But even more likely, the issue was spotted and known to some grassroot level quality worker whose protests and notices were smothered by a mass of seniors like product managers, quality managers and vice presidents. Quality becomes a cliched word and, often stage managed in many projects. The Quality department is looked on as an hinderance as if otherwise operations are always smooth. Very few managers know the history of quality and what used to happen in industry before the quality movement came in the 1940's.
Sometimes the level of risk in IT projects cause me to shudder - lack of testing, buggy code, numerous patches, poor project management, ambiguous requirements, limited resources, duplicate systems, redundant data.......a single line of buggy code can cause millions of dollars in actual damage. We need to know always what is important and what is not to the project and the business, and not flinch away from keeping to those standards ever. Thats is the hallmark of a great , trustworthy consultant.
3) Changing circumstances :
What finally bought up the issue to speed ? It is very interesting that the issue comes to light when the global economy has suddenly collapsed and shrunk. The good thing about the ongoing recession is that several poor -quality businesses have been flushed out into the open : eg..those that ran on poor liquidity (Madoff, Satyam) : those whose mistakes may have been overlooked or even forgiven during better times. And we often have no control over circumstances when they change. We have only ourselves to blame if we were not better prepared for it.
