How Toyota Became #1: Leadership Lessons from the World's Greatest Car Company Review

How Toyota Became #1: Leadership Lessons from the World's Greatest Car Company
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How Toyota Became #1: Leadership Lessons from the World's Greatest Car Company ReviewThe subtitle of this book, "Leadership Lessons from the World's Greatest Car Company", let's the reader know that this is really a book targeted to the insatiable market for people looking to develop their business leadership skills rather than a scholarly analysis of Toyota's rise to leadership in the auto industry suggested by the title. We don't get a penetrating analysis of the automobile markets or how the national markets have developed into a global market over the past 50 years or a deep look at the macroeconomic conditions facing the American versus the Japanese (or the European) car makers. Nor do we get a consistent set of measures that capture the shifting ups and downs among the various car companies over decades.
Basically, we get a hagiography of Toyota that does everything right for noble reasons that are justly rewarded by the marketplace and a bunch of bumbling and undeserving American car companies get the pounding they deserve. While those of us who have grown up in Detroit over the past decades know very well that the Big 3 have made huge mistakes and have persisted in behaviors that have exacerbated their decline, we also know there are additional reasons helping Toyota and hurting Detroit. For example, do we even get a simple comparison between the demographics, pay, and benefits in the Japanese plants in America versus the plants of GM, Ford, and Chrysler? Nothing much beyond the $2,500 cost advantage Toyota enjoys and blaming the union contracts with the UAW.
Certainly, there is truth in blaming the US auto companies and praising Toyota, but not much beyond Toyota's ethos is explained in this book. When we did automotive case studies while I was in business school, it became clear that Toyota had earned its success and does do things better than any other car company in the world. However, the book does not discuss this year's explosion on recalls by Toyota and the concerns being raised about Toyota's quality this year. What went wrong? Where were the hallowed principles and the company culture? Who wasn't pulling the cord and why? Why was Toyota management called on the carpet by the Japanese government?
These misgivings aside, we do get a popular history of the development of the firm from its origins as a loom manufacturer. Much of the text focuses on the Toyota Production System and examples of how Toyota has benefited when living its principles and found difficulties when it hasn't. We are told about the power in the more egalitarian ethos of the Japanese executives, the daily striving to find new improvements in quality and finding waste to eliminate. The benefits of long-term investment and building customer trust are highlighted as are importance of learning from mistakes, executing big plans by paying attention to even the tiniest details, why management by example rather than command is more effective, and so on. The appendices cover Toyota's seven guiding principles, a bulleted summary of The Toyota Way, a glossary of Japanese terms used in the Toyota Production System, and a few charts comparing the favorable trends of Toyota's share price, revenue, and net income versus GM and Ford.
If you aren't already a student of Toyota and its production system or the principles that make up its culture, you will find this book an informative and well written overview of what the company is trying to do each and every day. However, if you are already familiar with the TPS and the auto industry, this will likely seem a bit on the light side. And if you work for GM or Ford, even as frustrated as you likely are with the past couple of decades, the way your companies are depicted in this book will likely be more than irritating to you.
I do believe that business leaders who follow the principles stated in this book will do better than those who don't. However, the principles also need to be supported by the corporate culture and there is a bit of a chicken and egg problem. How do you get the culture without people who live these principles? And how do you get people to live these principles if the corporate culture doesn't support and reinforce them? These are important questions to answer and the discussion of NUMMI in the book is not encouraging to the notion that the principles can be transplanted to another company.
I liked the book, but wished for things the book didn't offer. That is not really the author's problem, but mine. He wrote his book and I thank him for it. However, I am still looking for something more.
Reviewed by Craig Matteson, Ann Arbor, MIHow Toyota Became #1: Leadership Lessons from the World's Greatest Car Company Overview

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