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Lessons from Toyota

By Robert Fritz

It is interesting how Toyota turned itself into General Motors as they aspired to become the largest car company in the world, something they achieved two years ago. The lessons that we can learn from this are not limited to corporations. They can apply to any of us as we pursue our goals. So, while I'll be talking about the specific case of Toyota, the very same pattern can be seen in the lives of individuals, couples, teams, groups, and, of course, organizations.

First, there was what made Toyota great. A simple idea, really – make cars that are very well built. After years of having to endure lousy American cars made in the 60's and 70's, with such terms as "planned obsolescence" being described as a useful business concept (translation: the car falls apart just after it goes out of warranty), people were given a chance to buy cars that were reliable, safe, and lasted a long time. This was a good business strategy on Toyota’s part.

But it is easy to say build cars with great quality. It is another thing to do it. And for years, Toyota’s focus was on building in quality to their manufacturing lines, just as Dr. Deming had taught them. When Toyota first became a force in America, I saw a documentary on the company. The workers on the line had great allegiance and alignment to the company, a sense of belonging, of membership in something larger than themselves to which they were dedicated.

The way it was expressed, the sense of loyalty, or whatever it is that the employees explained, was not a typical Western notion. Yet there was something very personal – call it pride, call it professionalism, call it feudalism as many people did at the time – that seemed to help make quality cars. There was an overriding vision that people shared. And in this case, it was a REAL vision, not just a platitude. Here was a company that knew its competitive advantage was making cars that matched what their customers wanted.

That is a strategy that the high paid executives at General Motors never quite seem to get. If they had figured that out, they would have done what the Toyota people had done for years: plan ahead, invest in the future, make the types of changes they needed to, anticipate what will happen after the current period, and after the period after that. There is a lot of creative work to do if you want to build cars people want to buy. There is also a lot of technical and managerial work that has to be done.

Toyota did that work and it paid off.

But over time they lost their vision. Or they forgot what made the company work. Their management techniques moved from a way of making things more thoughtful, to bureaucratic rituals that became more and more mindless. The more ambitious they became in relationship to market share, the more they lost their soul.

Now there is nothing wrong with having high ambition. But there is something wrong with mindless ambition. You lose touch with the deeper reason you are doing what you are doing. Sometimes you see this pattern happen to great and talented film and rock stars who lose touch with their own art. They become parodies of themselves. They seem not to connect to the same creative source they once had. It is sad when that happens.

The good news is that when people lose their soul, they can get it back. But to do so, they must discover or rediscover the deeper reason why they are doing what they are doing. Purpose is not a cliché. And not all purposes are created equal.

Many companies have been sold a bill of goods about what Wall Street thinks their purpose should be: Shareholders’ return on investment. Well, why do we have shareholders in the first place? In other words, if we owned a company, why would we sell parts of it (shares) to other people? The reason is so that we can raise money to fund our purpose. Therefore, our purpose can never be shareholders' return on investment. (That's our shareholders' purpose, not ours.) If we thought that were true, we could lose touch with our customers' desires, values, and needs. In addition, we form a structural conflict between serving the customers, which usually mean investing in things that are good for them, versus serving our shareholders, which means holding off on investments if they take away from the bottom line.

There are many ways to lose one's way. There is only one way to stay on track, and that is to be in touch with what really matters to you, being true to your vision and values, learning along the way, not letting success go to your head, not letting failure take you off course, being both open and steadfast, being honest with yourself to a fault. And as you look at this list, it sounds a little like the advice you may get in a fortune cookie. But, beyond the slogan quality of these thoughts, they are a pretty good description of the principles that will keep you aware of your deeper purpose as you pursue your aspirations.

But there is more. To grow a business or a life, investment is needed. It may be financial, or it might be energy, or focus, or learning, or blood, sweat, and tears. And for the business organization, while there is nothing wrong with trying to run operations with an eye toward economy of means, a line is crossed when it is just a matter of trying to under-invest in needed capacity simply to satisfy those who only care about their own pockets, and not the customers being served.

On the personal level, "investment" often means making any necessary strategic secondary choices that support your primary choices. And making any fundamental choices that are consistent with your deepest values.

What are the lessons here? One is how easy it is to get distracted by the glitter of success and the arbitrary symbol and mindless ambition of being the biggest versus the best. This may have been Toyota’s critical flaw that so blinded it to its own foundation. And there is a universal principle here that is helpful to us all: be mindful of the deeper reasons of your creative process.

© Robert Fritz 2010

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Updated: 10/24/10