Yesterday witnessed Akio Toyoda, Toyota's president and chief executive, doing the perp walk in front of the US House Oversight and Government Reform committee in Washington. Subjecting the leader of the world's largest automobile maker to the political theater that is known as a congressional hearing is ripe for opining upon. What interests me more, however, are the comments Akio Toyoda made about why these problems may have occurred. The February 24th edition of the Financial Times carried excerpts from his written testimony. Here are a few that caught my attention:
"I fear the pace at which we have grown may have been too quick..."
"We pursued growth over the speed at which we were able to develop our people and our organization, and we should sincerely be mindful of that..."
He also commented that the company's priorities became "confused" and that the company "lost way" in its rapid rise.
What an interesting parable! Although Toyota is one of the world's largest companies, the events leading up to its current predicament could take place in any size organization. How many of us aren't under constant pressue to grow and expand market share? Who would feel comfortable raising one's hand and saying "hey guys, I think we should slow down and get things right." That can be a career killing argument! There are undoubtedly more than enough gung ho, aggressive, hubristic folks that would take that opening and run with it to your detriment. I can't tell you how many times I have heard statements like "it's a nice problem to have" or "we'll figure it out later - just go get it done." I can also say with confidence that most of those situations didn't end well.
So, what's the solution to prevent the wheels from falling off as growth accelerates? Certainly we want options other than growing less.
The companies I have observed who have handle growth well embrace planning and preparation. They plan early and often -- they prepare early and often. Equally important, they have a holistic view of the organization and the individual functional parts participate, communicate and coordinate with discipline. The smart companies realize that growth is not just the domain of sales and marketing.
Conversely, the companies that get into trouble have disjointed planning and communications processes, with the sales and marketing functions typically operating in a vacuum. As one can imagine, as growth kicks in the other areas of the company are unprepared as they had no visibility on what to expect. Manufacturing is caught flat footed, customer service is overwhelmed, HR is scrambling and accounting can't bill and invoice fast enough. Delays and mistakes begin to take place, customers get angry, the wheels begin to wobble. If the company is lucky, it can throw a ton of resources at the problem (sound efficient?) to keep the wheels from falling off. If the company was smart to begin with it is comfortably enjoying it growth and already planning and preparing on how to take it to the next level. Success in preparation begets succes in growth and expansion.
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