Monday, 8 February 2010

Toyota: lost in translation

How has one of the most respected car companies in the world apparently managed to drop the ball in such a big way?
One thing's for sure: Toyota hasn't suddenly stopped making very reliable cars.
What's left it looking like an athlete stuck in quicksand is a mix of its own management methods and differences between Japanese and Western culture.
Right now, it seems like it's taken too long to act on what feels like a big risk. But has it?
Now, risk is a factor big companies examine regularly because there's a lot at stake. There's even a formula which allows them to calculate it: probability times consequences.
In other words, how many times are things likely to go wrong and what will happen if they do?
For example, you can calculate the risk of flying by multiplying the number of accidents by the injuries or fatalities. Divide it by the total number of flights and you have a statistical risk factor.
What that number won't flag up is factors seemingly unconnected to an activity. Go back to that flying example: statistically, the most dangerous part of air travel is not take off or landing but driving to and from the airport.
Which brings us back to cars. Like most car firms Toyota often tweaks its car designs when feedback from service departments suggests something isn't operating as well as it could.
In the case of those accelerators, it saw feedback last year which said some drivers were finding their pedals weren't going up and down smoothly. Checks highlighted moisture and wear in a small component so it did a redesign.
What that feedback didn't flag up, Toyota says, was a risk that the accelerator might actually stick in position.
We don't know what process Toyota followed with this problem. But it will have been a set process - the company is famous for a strict, step-by-step approach to the job known as the Toyota Production System.
It has served the firm well for decades, but there's evidence it isn't perfect for situations where you have to think on your feet.
In Formula One motor racing, Toyota spent billions but won nothing, the sport's insiders blaming what was, by their standards, a laborious management system which didn't give engineers and designers free rein.
Has the same inflexibility cropped up with the recall of hundreds of thousands of cars around the globe? Toyota will be well aware of the exact scale of the risk posed by the accelerator problem. In pure statistical terms the risk posed by driving a Toyota is, infact, tiny.
But risk is not just about statistical fact. It's also about fear - perceived risk rather than reality - and reputation.
People have heard about an accident in California involving a Toyota-made Lexus where people died. It may be one accident in millions of journeys (one not caused by the same accelerator fault), but they'll naturally notice the one fatal accident they've just heard about not the journeys where nothing happens.
So the perceived risk is of a clear and present danger.
And reputation? In Japanese culture, admission of guilt doesn't come easy, there are degrees of saying sorry, and it is entirely honourable to pick a particular sorry for a particular situation.
To Westerners that risks being seen as grudging, calculating and insensitive.
The reality? There have been accidents and worried drivers because of a faulty component which Toyota has already phased out. It has recalled the cars affected that are still out there. It has publicly taken responsibility and - eventually - said sorry.
In Japan, it will recover ground quickly. In the UK, its long-established reputation for reliability will eventually overcome the effect of a recall. In the US, armies of personal injury lawyers and vested interests in the country's own auto industry will make sure it pays a price for years.
Toyota may ultimately have done all it could. But its own way of doing the right thing seems to have got lost in translation.