Toyota's Crisis Managment

Two fascinating looks at the way Toyota is handling the management of its sudden acceleration crisis.

The first, by Richard Tedlow, a professor at Harvard Business School and the author of Denial: Why Business Leaders Fail to Look Facts in the Face. His commentary just appeared in BusinessWeek (you can find it here). A key quote:

What on earth were they thinking? Did they believe that the failure of this most public of products would pass by unnoticed?

I believe I know the answers to these questions. Toyota's top people were in denial, just as the public was. By denial, I mean that they stopped being honest with one another. And they stopped being honest with themselves. If Toyota's products were as fatally flawed as they were, that would be too awful to be true. Therefore, the awful truth was brushed away. I've seen this happen in so many companies that I was compelled to write a book about it.

Second, from Modern Healthcare (registration may be required for this one), comes from an unlikely source: the hospital industry. David Shulkin, a professor of medicine at the Albert Einstein College of Medicine in New York, argues here that Toyota could learn a thing or two from the way hospitals have learned to handle mistakes:

Hospitals have worked in recent years to create new systems for the rapid identification of problems when they occur. Healthcare workers are encouraged to report both errors and potential errors, using incident reports and other reporting systems. Medical staffs use peer review processes to examine safety concerns or deviations from standard practices. Insurers have begun “pay for performance” systems that work with hospitals to monitor quality data and change payments based on improvements in quality data. Data on hospital quality is now increasingly reported to the public through government and private initiatives and is accessible on the Web through numerous commercial companies...

As we have learned in healthcare, introspection, accountability and transparency of information is the best path toward healing. Sometimes, making a mistake, learning from it and implementing changes to make the system better is just what the doctor ordered.

Both articles offer fascinating takes on where Toyota went wrong, and what it should be learning from this mess. Give their recent public posture, however, one wonders if Toyota is truly listening.