It is interesting to trace the connection between Toyota’s recent troubles and faulty strategic self-perception. As a Prius owner myself, I had already discovered the slight electronic glitches on ice and over potholes, but they seemed relatively insignificant and I had shrugged them off (although admittedly my car is the earlier version).
A bigger part of the problem in my estimation is that Toyota does not know what to do after ultimate success. Having become the world’s biggest carmaker in 2008, by October 2009 president Akio Toyoda said in a speech that the company was one step away from ‘capitulation to irrelevance or death.’ He was quoting the final stage of Jim Collins’ five step framework in How the Mighty Fall.
If your overriding goal is to be number one, you are in danger of losing your way if you succeed. Like NASA after landing a man on the moon, you will have no idea what to do for an encore. Toyota would have been better off heeding one of Jim Collins' earlier books, in which he suggested that a company’s goal should be a combination of star and mountain. The star is the enduring purpose that provides lasting direction, while the mountain is a challenge to be achieved.
Toyota seems to have taken the mountain for a star, and having reached the summit did not know what to do next. From there it was a short step to strategic suicide. Toyoda’s speech was not so much a signal that something really bad had happened, to quote a recent column in the FT, but was itself a spell-like invocation of doom.