Had a good chat to my Dad earlier today about Toyota being the world’s number-one car maker in 2005, beating General Motors. We then ate lunch at a mall, remarking how we had joined those who were there to socialize—how young people these days just hung out instead of getting fresh air or reading a book. We had, he felt, spoiled them with products, all while robbing their souls and their chance of some introspection.
   They are interesting remarks, as we don’t get to hang out much in public. His remark about the first matter, of Toyota, is not unlike what the authors of Beyond Branding and I have uttered for ages. It is impossible for the CEO of a large American corporation that is so obsessed with share prices to maintain a long-term vision, and that any strate­gic movement is inherent­ly tied to Wall Street. Japanese shareholders, on the flip side, aren’t going to call for blood if they can understand a long-term vision behind decisions. In Toyota’s case, it’s about being able to spot the next trend—the hybrid car—and not being so stuck on trucks and SUVs that when consumers change, there’s nothing to catch them.
   It’s the third time in my life­time where I’ve seen Detroit caught with its pants down. In 1999, I was already writing about the dangers of gas-guzzling and how the SUV was dead; I was a few years early. But someone must have heard me. Toyota will have a Camry Hybrid shortly, and already has a Kluger (High­lander SUV) Hybrid in its home market, complementing the Prius. Lexus hybrids are not far away. Honda has its Insight, Civic and Accord hybrids. And once upon a time, New Zealand had natural gas–gaso­line hybrids—at least between 1979 and 1995. Like Detroit, the New Zealand government took its eye off the ball.
   These two Japanese companies will do with hybrids what they did with the Corolla and Civic in the 1970s. People then exited their Ford LTDs, Buick Electras, and 8·2-litre Cadil­lac Eldor­ados for vehicles which just made more sense. Now they are abandoning Ford Excur­sions and Hummers. All Detroit really has is the Ford Escape and Mercury Mariner hybrids—thanks to Mazda. Just like Chrysler once had its Dodge Colt and General Motors its Buick–Opel.
   But there is no immediate solution. This time, the over­taking is very notice­able—to the point where I don’t think GM will claw back its crown for many years, if ever. It will lose economies of scale and will need to look at emotive cars—but Toyota is master­ing emotion very well, thank you, with the addition of westerners to its boardroom, some­thing it didn’t do in the 1970s. The board back in Toyota City knows just what will push consumers’ buttons.
   GM—and for that matter, corporate America—can only help itself by looking long-term again, and to begin valuing its companies using more sensible measures. This can range from informal networks to social respon­sibility. Chris Macrae, the other regular contributor to this blog, has had much to say on the topic, but it took GM to present a big enough case which may wake people up. Winners in America, too, are those that have grown gradually, as Jim Collins found in his Good to Great—not those that have celebrity CEOs that sparkle and fizzle out. Until we change our thinking, or, rather, adapt the thinking that we already know, this quarterly obsession remains dangerous—and ruinous.
   What of the mall kids? They might not know just how good we had it once, because no one tells them. They think hanging around in malls and spending money they don’t have is the norm. It is, once again, an obses­sion with the now, and instant gratifi­cation. Someone will some day make a lot of money with self-help books, if we let them.
   If we don’t change our thinking for the sake of commerce, we should at least change our thinking for the sake of setting an example for tomorrow’s generation. Hard work, and not demanding a star­ring role when you walk in to the audition, will get you to the top. Toyota knows it, as does its shareholders. posted by Jack Yan, 4:18 AM  permalink