When you think of quality manufacturing, one name likely to pop into your head is Toyota. The Japanese automaker built quality cars for years and became so good at quality that it set the standards not just for other automakers but for other manufacturers.
So imagine my surprise when I read that Toyota is having trouble maintaining its level of quality, for the same reason that many growing businesses falter — success. Toyota’s success caused it to outgrow its ability to manage and control the most important reason why people buy Toyota’s cars.
To grow successfully, business owners must understand why customers buy from them instead of the competition. This will help you identify your company’s critical success factors, which must be maintained to retain customers. When a critical success factor, such as Toyota’s quality, disappears because the company outgrows its ability to provide it, the customer doesn’t care why it’s happening.
The combination of unhappy customers and aggressive competition will hamper growth.
But outgrowing your ability to maintain critical success factors doesn’t have to mean the end of your business. If acted upon quickly, it can actually cause operational improvements that can enable you to build and strengthen your business’ success factors. Toyota seems to be doing just that; rather than denying the problem, it looked for its cause and attacked it.
Restoring a company’s ability to maintain critical success factors can be expensive. But with what quality means to Toyota, what amount would be too much to maintain its leadership position? And, how much would be too much for you to maintain your market and customer strength?
In a fast-growth situation, response time is critical to limiting the damage and the cost to fix it. Fast response, however, is only possible when management is aware of what its company’s critical success factors are and how well they are being delivered.
Through continuous monitoring, then acceptance of reality when it seems that standards have slipped, timely repairs can be made. This can keep costs to a minimum and, more important, ensure customers remain satisfied and growth is maintained.
Joel Strom ([email protected]) is director of Joel Strom Associates LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.