Toyota has been making the news a lot recently because they are expected to become the world’s largest auto maker this year, passing GM’s sales and bumping GM from the world’s largest perch that GM has held for the past 75 years. Even though many of those Toyotas are designed, engineered, and built by Americans on American soil, this is a big deal. The US has dominated the world auto market as long as cars have been around, and now a Japanese firm is going to take a turn as the market dominator.
We know why Toyota is doing so well; they make really good cars. Specifically, they make better cars than GM. Actually they made better cars than GM… these days GM and Ford are getting rated well, right in the mix with Toyota and Honda, when it comes to quality. Unfortunately bad is worse than good is good, and US automakers have to overcome a couple of decades of making some really crummy cars in order to win back customers.
I saw part of an interview with one of the executives at GM that made it clear that they know what they are facing. He explained that they know that they can’t merely be as good as a Toyota to take back the lead; they have to be better than Toyota to get customers to come back to GM (actually, he said they have to be more Catholic than the Pope… which made me laugh). It is going to take ongoing improvements that have been underway for the past several years, but it appears that they will endeavor to stick with the change that is underway and take back the lead. As a kid from the Midwest who grew up in the shadows of smokestacks, I’m rooting for them.
Although in miniscule proportions when compared to GM, I’ve been around positive organizational change. I’ve happened upon problems in which everyone seemed unhappy: Board, customers, leaders, influencers, and employees.
In all of the reports I have seen on the Toyota story, I have never once heard anyone say that Toyota’s advertising has much to do with their overall success. Everyone understands that good marketing and advertising is important, and Toyota couldn’t be where they are without it, but it is something else that makes the difference, especially in the long haul.
This is one of the lessons I’ve learned, the hard way. I’ve found myself convinced that I could change an institution from the outside in. So, with little regard for the insiders, I worked hard to change perceptions. We had some success, real success that we could measure in revenue… but we were running into problems that had little to do with our PR and marketing efforts. We had internal relationships and systems that needed to be fixed before we could see any further successes.
Our changes in governance have not only made people feel better about their place in the organization; these changes have made it so that people are working smarter and making more meaningful contributions to our strategies that will shape our future. Our systems have changed, and so have our attitudes and approaches. Our relationships inside the organization are better, stronger, and more productive. It is working.
GM, although obviously way larger and more complicated than any organization of which I have played a part, is on the same path. Their old ways of treating employees like part of the machinery are out moded; today they know that the experiments they started with Saturn must overtake the whole organization. They’ll retake the lead from Toyota as they continue to change the way they work with their own people. Maybe, in some ways, they’ll be more Japanese than Toyota.