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The Story

Feb 2010

“Toyota – Where did it all go wrong?”

Toyota recalls over 8 million vehicles after finally acknowledging a problem.
Beyond Competence

Toyota, one of most respected brands for quality and reliability in the world, has grown ‘beyond competence’ (by its own sorry admission). Management finally reclassified the SUA (Sudden Unintended Acceleration) problem which made cars race out of control as a ‘safety’ issue and called in over 8.5 million vehicles.

The cost of success
taken to excess

The bad publicity generated by the massive recall led to Toyota’s shares plummeting 20% in two weeks. Analysts estimate the damage could cost Toyota between $3bn and $6bn in lost sales, factory shut-downs, and litigation. Problems have been found with Toyota accelerators, brakes, and even power steering.

Huge problem
– causes uncertain
This SUA problem is allegedly linked to hundreds of accidents and over 50 deaths in America in a string of class-action lawsuits. Yet the root cause of the problem has yet to be identified with any certainty. Toyota has admitted that the solutions adopted so far, eg replacement floor mats and an extra piece of metal fixed to the accelerator pedal, may only cure a third of the problems.
So call in Nasa Nasa (the space agency) and the National Research Council in America have been called in to try to identify the root causes. But Toyota is adamant that the problem is not caused by the electronic throttle controls on their cars’ (despite complaints ever since their introduction in Toyota cars in 2001).
Watchdog, or Lapdog

The American highway safety regulator in 2007 investigated these ‘sticky’ accelerator complaints but somehow Toyota was required to recall only 55,000 cars to replace their floor mats.

Leadership kept
in the dark?
Toyota president Akio Toyoda gave evidence to an American Congressional hearing to explain the situation and said that he had only just become aware of the problem. At the same hearing the harrowing story was told of a driver calling the 911 emergency services saying “Our accelerator is stuck … there’s no brakes” before the car plunged into a canyon at 120 mph killing four people.
 

Analysis and Lessons

Design Thinking ... Safety Thinking ... Internal Communication ...
Customer Focus/Complaints ... Problem Locations Mystery ...
Real Causes ... Culture ... QA System ... Product Design ... Concorde 

Part solutions,
for the moment
The causes of the SUA problems are still being worked on. Nasa and the National Research Council have been given $3million to try to solve it. Toyota hopes that their findings don’t blame the electronics, which would be a massive cost to rectify. Immediate solutions being implemented include new floor mats, welded bits to pedals, and for new cars, a ‘black-box’ recorder (to spot the causes) and additional software to make the brakes override the accelerator.
Fundamental safety system design

Are brakes designed to stop a car on full throttle
Several other carmakers have now decided to follow Toyota’s example of adding software to make the brakes override the accelerator, in the unlikely event of both pedals being pressed together. We would have thought that this should have been a fundamental aspect of design, that the brakes should override the engine fuel injection no matter what the cause (eg stuck-down accelerator pedal). This is basic design of safety systems, especially with electronic systems.

The Institute of Advanced Motorists told us that car brakes can ‘fade’ and cease being effective on prolonged application. This could account for some drivers reporting that braking had little effect on their runaway cars.
The real causes
of the problem
According to some reports these problems have been known for years, at least at regional ‘shop-floor’ level and at watchdog level in America. The president has said he wasn’t told about them until recently. He has now admitted that communications in Toyota were not adequate, particularly regarding customer complaints. American executives have said that the ‘overpowering control exerted by head office had been a key factor in the crisis’.
Problem Locations mystery There seems to be huge differences in the effects of the problem between countries. Japan has been relatively unconcerned, continental Europe has had 26 complaints and no accidents, UK has had 260 complaints. However America’s score so far is hundreds (possibly thousands) of complaints, claimed links to over 50 deaths, 27 law suits, and 82 class-action cases.

One reason for the different levels of complaint could be that the cars may be different in different countries – different markets often have different specifications. But clearly, American customers are more litigious than most other markets. And the US media more active and unforgiving than in most other nations. The Japanese media will be very tolerant of Toyota.
The real causes
of the reputation crisis
Two key reasons – Toyota didn’t adequately deal with complaints and it took too long to act once the story came out. It even took the president two weeks to make a public apology and agree to attend the US Congressional hearing. The crisis story just kept growing - out of control, like its cars in some cases.
  But the Root Causes of the problem were/are:
Centralised control and communications By its own admission, head office has too much power. The result is that communications are predominantly one way, from the regions to top management in Japan. But it would seem that those communications didn’t always get all the way to the President, which is a mystery.
Cultural differences? National cultural differences may have contributed to the problem. I worked with Japanese clients once and was struck by their tendency to say ‘Yes’ to everything in meetings but often later announce the opposite or a need for ‘clarification’. This wasn’t a language issue, it was cultural differences. Confrontation avoidance.
Poor Customer Focus

… feedback blockage is a very common problem, presumably unknown to most top management
An effective customer complaints system and responsiveness to customer concerns are critical aspects of Customer Focus. Reports of Toyota virtually ignoring customer complaints, and especially for so long a period (if true) must have contributed to the crisis. You can only ignore customers for so long.

Our research indicates that Toyota is not alone. We see many instances of feedback barriers/blockage while senior management presumably think that their feedback and complaints systems are working satisfactorily (or are just a hassle). Some large organisations even have no-names policies which seem designed to put barriers in the way of feedback and ideas for improvement. “You can tell me your feedback” (when customers ring Customer Services) is a highly unsatisfactory system. Complaints and ideas somehow just disappear into the system. Most feedback systems are badly designed or are not evaluated.
Poor Quality Assurance system Toyota virtually wrote the book on this subject. Yet it would seem that their QA system - designed to ensure that quality checks actually work - is not as robust as it once was. Too many things are going wrong. This is a systems design error.
Product Design errors

(+ story update April 2010)
Having to fix a bit of metal to an accelerator pedal and reposition floor mats sounds very Heath Robinson. The implication here is that the pedals, and floor mats, were incorrectly designed. And the use of electronic controls brings in whole new aspects of design, reliability, and safety. Software can have glitches.

As an update to this story (April) Toyota has now suspended sales of a new Lexus model in America after a consumer magazine said the car could roll over during sideways slides before the electronic stability controls could prevent it.
Lobbying too effective Toyota’s skill in influencing governments and watchdogs ultimately worked against it in a situation where the watchdog failed to halt the problem growing to massive proportions. Controls can be beneficial.
Ignoring the problem.
Remember Concorde?
Continental Airlines was blamed for the Concorde crash in Paris in 2000. But, in fact, the problem with tyre blowouts etc impacting on Concorde’s fuel tanks had been known for many years before this disaster killed off a fine aeroplane.
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