Wednesday, June 24, 2009

Shoichiro Toyoda Ridicules Toyota Management - Change Or Die

I'll never forget the week Toyota's stock price peaked this past cycle. I remember reading a very popular financial blogger's remarks about why Toyota was one of his favorite investments. After perusing his thesis, filled with incredibly erroneous conclusions and a clear lack of understanding of the auto business, well and business in general, I decided to put up a contrary post stating why Toyota's stock was priced to perfection and the major pitfalls facing the company.

Now honorary chairman Toyoda is speaking out about many of Toyota's strategy failures we have talked about on here. Toyota's crisis is a study in hubris and the globalization of a management that chucked its conservative well-proven ideals. Frankly, to a certain extent, it failed because its management became too Americanized. Not in the sense that Americans were running the company but in the sense that the business mumbo jumbo taught in American universities and adopted by many American businesses started to infiltrate Toyota. Ironically, it seems as though our businesses were better off before we had professionally trained management heading many of our firms. But then America didn't become the world's mightiest industrial nation through the group think taught in our business schools. It did so because we embraced entrepreneurialism, creativity, individuality and individual freedoms.

American companies pioneered the management disciplines which made Toyota successful. Something we have talked of on here. We also wrote that Ford, as an example, was coming full circle by embracing the Toyota way that was ironically based on the Ford way of one hundred years ago. We'll see more of this across economics and business as time goes by - relearning the lost art of successful business management.

We'll see it because we must. Timeless ideals of success will be forced back upon society and a new generation that will learn to replace the horrendous mistakes of this generation. Just like post 1929 when a new generation had change thrust upon it whether it wanted change or not. Off the top of my head I can't recall whom, but I believe it was Schumpeter who hypothesized substantial economic change could never be instituted until the current generation was out of power. I believe there is ample evidence this is indeed a key determinant of economic calamities. This is why I continually harp that we should not be listening to anyone in charge of business or politics for ideas out of this crisis. Yet, they have nearly exclusive access to the microphone. They are the voices the President is relying on. It's the faulty ideology of these fools that landed us in this crisis. That means society has two choices. 1) Live through this hell for another ten or so years while we try every worthless idea a generation of economic dunces wants to use to resuscitate economic growth or 2) Boot their asses out of office and positions of authority and replace them with a generation not beholden to economic witchcraft.

Change or die. I guarantee you Toyota understands the stakes and unlike Wall Street as an example, they will change of their own free will. Change or die. I guarantee you the majority of American people get it as well. The winds of change are blowing and the politicians are still living in their bubble. For now.
posted by TimingLogic at 9:27 AM