This is more than about the problems with Toyota.

The Economist is a newspaper.  It was first published in September 1843 which, of itself, makes it a notable newspaper.  Many years ago, more than I can recall just now, I became a subscriber to the newsprint version of this weekly paper.  It has become such a companion, so to speak, that when I left the UK in September 2008 to come to Mexico I made arrangements to continue receiving The Economist each week.

However, the Mexican postal system, despite being thoroughly reliable, is rather slow and, rather logically if you muse on it, the postman always only delivers when there is more than one item.  Thus the particular copy of The Economist that carried the story about Toyota arrived late and with three other editions!

Let me turn to the point of this article.

The Leader in that edition discusses the situation in which Toyota find themselves and also refers to the book written by Jim Collins, “How the Mighty Fall“.  As the Leader says:

Mr Collins advocates old-fashioned management virtues such as determination, discipline, calmness under pressure and strategic decision-making based on careful sifting of the evidence.

Later The Economist goes on to say;

All three [HP, Motorola, IBM] faced the problem of having to adapt their businesses to the rise of the internet.  HP and Motorola, in their efforts to remake themselves, hired bosses in from the outside and reorganised themselves repeatedly.  Luckily for HP, it pulled itself together in the nick of time under Mark Hurd, a very different boss from his predecessor, Carly Fiorina, who was fired in 2005 after a wild five-year ride.  Eschewing her game-changing acquisitions and grand strategies, Mr Hurd concentrated on operating efficiency, execution, financial performance and customers.

Concentrating on customers! Wow, that’s a novel idea!

The Leader concludes by discussing Akio Toyoda, Toyota’s newly installed boss, and the grandson of the founder, in these words:

Mr Toyoda’s approach is not visionary.  It is simple, incremental and requires painstaking attention to what the customers want.  That is its virtue.

Amen to that. The current doom and gloom will have plenty of silver linings and recessions often bring about wonderful innovations. If this current recession causes businesses to return to core values and fundamental truths about how to succeed then our children and grandchildren will be the beneficiaries of that. And there is nothing more fundamental than knowing what your customers want, and then supplying that profitably.

By Paul Handover

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