Archive for April, 2010

Benefit from the Economic Recovery

Monday, April 26th, 2010

Realtors are reporting an increase in housing sales. Car sales are up, car dealers are hiring, GM has paid off their bail-out loan 5 years early and even Chrysler is doing better. Unemployment figures are improving. The stock market is up. Yes, the recovery is here and steadily getting stronger.

Admittedly, things are not perfect and it has not returned to the way it was 4 or 5 years ago but the economy is improving steadily. Our clients, colleagues and friends who are positive and optimistic have been weathering the economic storm much better than those who are pessimistic and have bought into all of the negative headlines.

Regardless of whether you are an entrepreneur, CEO, business owner, employee or unemployed, I recommend that you follow the advice of my colleague, Dr. Alan Weis by “interacting and associating with those people who are positive and optimistic and who are comfortable with an abundance mentality. Stay away from those who would have you believe that we are all victims”. The next year can make or break your business based on YOUR decisions, not those of others.

Stay positive, be an optimist.

Lessons Learned From Toyota

Tuesday, April 20th, 2010

Undoubtedly, in recent months you have heard the news reports concerning Toyota. Stories have range from floor mat problems to unintended acceleration, deaths, potential rollover of SUVs, denial of the defects and massive fines.

It may surprise you to hear that the biggest failure in the Toyota debacle is not due to the defects but it relates to the steps taken by Toyota management and their loss of vision. The reality is that all cars have benefited from significant technical advances. Most car companies use similar technology in at least part of their product line all car companies suffer from technical issues or defects from time to time. This is validated by the many technical service bulletins that are issued by car companies to their car dealers and service departments to assist in diagnosing customer complaints.

The Toyota episode teaches several lessons that every entrepreneur, CEO and business owner should learn regardless of the size of their company or their industry.

1. Always keep sight of your vision. Toyota has long been known as a quality focused company. In recent years Toyota has made it clear, in no uncertain terms, that their goal is to be the largest car manufacturer in the world. At some point the priorities of that goal became blurred relative to the strategic vision of the company. Keep in mind that clear thinking about mission, vision and strategy is most important when your business is facing challenges. In fact the mission vision and strategy guide the business actions that are necessary when faced with challenges.
2. When you make a mistake, own it from the minute that you realize there is a problem. Toyota allegedly knew about these problems for several years and even made some fixes in the cars that were being built and sold in Japan. If they had made the same fixes in the U.S., their customers may be more sympathetic.
3. Always be responsible to and accountable to your customers. It is most troubling that Toyota’s marketing has always been focused on the link between the quality of their vehicles and the satisfaction of their customers but that customer focus became blurred. Toyota’s handling of the customer complaints is unacceptable. Toyota responded to some customer complaints with accusations of poor car maintenance by the customer, poor driving habits, or they inferred that the customer was imagining the problems; however, internal communications appear to validate allegations that Toyota was not only fully aware of the problem but that Toyota employees warned senior management that the problems must be addressed and disclosed to their customers.

I expect that Toyota will suffer financially in the short term but they will recover and survive as a wiser, more responsible company in the long-term. This will be a tough lesson for Toyota but it is a strong reminder and beneficial lesson for all businesses:

Regardless of your success, don’t fall in love with your story.
Keep sight of your mission vision and strategy.
Mistakes happen — your reaction to a mistake will define your success.
Be true to your customers — without customers your company will cease to exist.