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Archive for March, 2010

Making The Problem Visible

Tuesday, March 9th, 2010

One of the first steps in solving a silent problem (a problem that is being avoided, neglected or is going unnoticed) is to make the problem visible. This is what I refer to in the book Without Warning as a component of a CAP Initiative. And part of making the problem visible lies in putting forth a solution, since solutions are the truth serum of any problem. It tells you how important the problem is and puts in motion the resources and timetable to make it happen.

I therefore found this article about the growing concern about bank liquidity over at Bloomberg interesting and telling. Here are a few excerpts worth noting.

China plans to nullify all guarantees local governments have provided for loans taken by their financing vehicles as concerns about credit risks on such debt increases.

By striking the fear of God into lenders, regulators hope to get them to turn off the tap,” said Patrick Chovanec, a professor at Tsinghua University in Beijing.

China’s sending a very strong signal that this kind of financing is over,” said Chovanec, an associate professor in the School of Economics and Management at Tsinghua University. “It raises the specter that China’s banking system has a lot more risk in it than people previously thought.”

In effect, the Chinese Ministry of Finance is stating, “We have a problem and we’re concerned.” Second, the Ministry has escalated the problem by putting in place a solution “this kind of financing is over.” Prior to this, rhetoric surrounded the problem, but not a solution. Third, by putting in place a solution, the Ministry has made the problem visible, thereby declaring its importance.

Making the problem visible is a critical step in every problem-solving situation. By making the problem visible, it helps fosters a culture of candor and creates a place where the truth is encouraged to be spoken.  And when we make a problem visible, we state “this is really important.”

Bottom Line: Making a problem visible should go hand-in-hand with problem solving. Problems are an integral component to leadership development, critical thinking skills and personal growth.

What Did Toyota Really Know?

Sunday, March 7th, 2010

The last couple of months has been painful for Toyota. Several large recalls have been initiated. Toyota executives have appeared in front of a several congressional hearings.  Sales and customer loyalty numbers are declining. And now news that unintended acceleration in cars that have been fixed have been reported. What else could possibly go wrong?

If you’re a business leader, it doesn’t get any more challenging than this. The ship has a gaping hole in its fuselage, you’re taking on water, and your future is unsure. Which leads me to the question, “What did Toyota know about their problemn and when.  Was it 6-months ago? 1 year ago? Possibly 6-years ago?

When you look back at history, the story eventually surfaces through an autobiography, a whistleblower lawsuit, or an internal leak. And when the truth finally surfaces, I expect the findings will be revealing. What might we learn?

  1. We might learn the how, the why and the where the problem started.
  2. We might learn who made the decision and who supported it.
  3. We might learn how Toyota was able to keep it silenced for so long.
  4. We might learn what they hoped to achieve by their decision, and what they feared if it leaked out.
  5. We might learn that they were unable and unwilling to take on such huge problem.

The “What Did Toyota Really Know and When” questions are the basis for the congressional hearings about Toyota’s safety problems. So far, these hearings have achieved little in answering this question. Although the Toyota problem is now visible, and the pressure is on to get to the bottom of it. Eventually we will learn the answer, and when this emerges, a certain war analogy will likely sum up the findings.

Every military defeat can be explained by two words - “too late.” Too late in anticipating danger - too late in preparing for it - too late in taking action.

What Will You Be Remembered For?

Thursday, March 4th, 2010

Over the next 2 years, what do you believe you and your organization will be remembered for? Will you be remembered for the great customer service you deliver on a day-to-day basis? Maybe, but doubtful. Will you be remembered for a new product you delivered into the marketplace with great fanfare? Possibly. Will you be remembered for the 50 years you’ve been in business, despite enormous odds? Unlikely. Or, will you be remembered for how you handled a disaster? The odds are, it will be the latter.

I’ve told clients many times, “Your leadership/organization will be recognized more by how it handles disaster, than by how it managed success.” Does this resonate with you? It should, because every once in a while we encounter one of those defining “disaster” moments. Or what some might refer to as “A Moment of Truth” situation.

Several years ago I was working with a client with a Moment of Truth situation. They had experienced an unexpectant product failure. At first glance, they were looking for straws. What went wrong? When did it start to occur? How many clients does it potentially impact? And the most important question of all, “What should we do?” They took enormous steps to identify the problem, and more importantly, implement a sound solution. They didn’t take the easy way out, or the low cost way out. They took the path that was best for their clients, because this aligned with their corporate values. The fix was costly and the outcome was interesting. Their client loyalty did not suffer, it actually improved!!!

There are numerous high profile scenarios with similar outcomes. The most obvious being, the Tylenol scare back in the 80s. And being from Minnesota, the collapse and the rebuilding of the I35W bridge. These are stories where adversity was embraced and sound solutions to difficult problems implemented.

Unfortunately, too often companies and their leaders follow a “path of least resistance or cost” protocol. It in many respects is tactical, not strategic. It’s about how companies can still achieve their objectives and not get sidetracked along the way.

Such is the case of Toyota. They embraced and fostered silent problems (problems that were being avoided, neglected, going unnoticed or being intentionally silenced), and are now suffering the outcomes. Toyota’s President, Akio Toyoda has proclaimed repeatedly that the fix they are proceeding with has been tested and has assured customers, “this will fix any problems that could be associated with unintended acceleration.” Today, Toyota’s that have received the fix are still experiencing unintended acceleration.

Today I’m wondering, will Akio Toyoda be known for how he mishandled a disaster, and the crumbles that are yet to come.

Are Toyota’s Safe

Tuesday, March 2nd, 2010

A USA Today/Gallop poll recently asked the “Are Toyota’s Safe” question to Toyota owners and prospective buyers. Depending on how you look at the data, it’s either encouraging or discouraging.

Thirty-one percent of Americans now think Toyota and Lexus vehicles are not safe to ride, while 55 percent say the carmaker dragged its feet in responding to potential safety defects, according to a poll published on Tuesday. The USA Today/Gallup survey of 2,021 adults showed fewer doubts among current Toyota owners, with only 14 percent saying the cars are unsafe. A large majority of owners — 74 percent — say they have not lost confidence in the vehicles.

Pollsters said findings also suggest enduring loyalty to Toyota vehicles among prospective U.S. car buyers generally. While 17 percent of prospective buyers said they would no longer consider a Toyota vehicle, 53 percent said they would.

Interestingly, this closely aligns with what I projected on February 8th in the article Can You Trust Toyota? I made the following prediction.

The reason these “Can Toyota be trusted…” questions are important relates to Toyota’s future success or failure. As I read countless news articles relating to Toyota’s problems, it apparent that current Toyota customers fall into 3-categories.

  1. Faithful Toyota Followers: This group love their Toyota’s, and the many years of dependability, quality and service they have grown to love. This group likely comprises upwards of 50 - 60% of all current Toyota owners.
  2. Concerned Toyota Owners: This group loved their Toyota, but aren’t quite sure what to think now and they’re concerned. They’re asking the question, “Can Toyota be trusted…” This group likely comprises 20-30% of Toyota owners.
  3. Discouraged Toyota Owners: This group feels they’ve been betrayed. They’re reading the news reports and are concerned and possibly frightened. They don’t feel like Toyota has been true to the image they portrayed. This group comprises 10-20% of Toyota owners, and is growing.

The next couple of months is critically important for Toyota if they are to revive their brand and their business. It will not be an easy task, especially considering that new recalls are being announced (another 1.6 million autos will need to have leaky oil hoses fixed) and the potential for deepening recalls is possible (The NY Times recently completed an investigation suggesting that Camry’s prior  to 2007 might also be at risk of a recall). All of this is transpiring while worldwide auto sales is increasing and Toyota is suffering from a lapse in quality, transparency and safety.

Toyota’s silent problem (icebox variety) is now known. How the Toyota silent problem became visible is somewhat typical. The cost to the Toyota brand, cost of repairs, lost revenue from weak sales and fresh incentives to stimulate sales will likely top $50 Billion. And this is the real challenge that Toyota is facing. Its cash position is hemoraging quickly, which will make it more difficult to revive the brand and its quality position.

The Feel of an Organization

Monday, March 1st, 2010

It’s been a couple of days since Steve Holcomb piloted his 4-man Bobsled team to a gold medal at the Winter Olympics in Vancouver. I don’t know about you, but bobsledding at 90+ mph down an ice chute with twists and turns with gravitational forces approaching 4Gs is simply unbelievable. How do they do it?

Following Team USAs Gold Medal victory, NBC had a “Return to Bobsledding” story about Steve. It appears that Steve had been suffering from a degenerative eye condition and in 2009 he informed his coach that he would have to give up the sport he loved, and had excelled at. He could no longer see the track well enough to pilot his sled safely or competitively. His coach gave Steve some advice and encouraged him to consider a not-yet-approved by the FDA procedure that might correct Steve’s condition. Steve had the operation and his eyesight was restored to 20-20. Obviously, this was an important element in USAs Gold Medal victory, or was it?

And now for the rest of the story. Following Steve’s return, it appears that his now perfect 20-20 vision was an asset and a liability. In the past, Steve would compensate for his poor eyesight with “the feel” of the sled and the track. It was the feel that guided him to smoothly transition between the various physical characteristics of a course at 90 mph. But now with perfect eyesight, Steve became more dependent on his eyesight. He found himself crashing more often, because he was losing the ”feel” component of being a successful bobsled driver. His solution? He scratches the visor on his helmet to slightly distort his vision, which in turn forces him to “feel” his way through the course. The end of the story - a Gold Medal.

As an executive coach and business consultant, I’m convinced that business leaders at times are too dependant on sight (what they see), and not enough on the “feel” of an organization. In turn, they miss some of the important signals that their organization is sending their direction. They miss those subtle nuances that help create the picture. The net result - they at times expose their organizations to risks that could have been avoided. Here are a couple of suggestions to help you reestablish the feel of your organization.

  • Listen for weak signals: They may be the subtle cues you’re really looking for.
  • Ask insightful questions and then shut-up: People love to talk if you just let them. You may have to sit through some painful prose, yet in the middle some insightful words of wisdom often emerges.
  • Management by walking around: Close your eyes - what do you really see?
  • Shadow employees: Does it make as much sense on paper as it does in real life?
  • Create a culture of candor: Let your employees tell you what they’re feeling and what is really going on.

“Feel” is one attribute leaders need to possess. So go out there, scratch up you lenses, and get a feel for your organization.

Yes at times, 20-20 vision is part of the problem, because it only delivers part of the picture.

Be the one to see it coming!

The first leadership book to point out the problem, then hand-deliver the solution.

Without Warning - Rondey Johnson

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