Takata recall - Quality more than just an airbag of hot air

We often take it for granted in the 21^st century that if a product is presented in a “new box” or a service at “new location” quality is inherent or explicit. The case of Takata airbag recall refutes this premise.

Takata supplies automotive safety systems controlling 22% of the global automotive airbag market. The company’s mission statement emphasises their commitment to quality which is to “Develop innovative products and provide superlative quality and services to achieve total customer satisfaction”.

 

This emphasis on quality is reinforced by an organisational approach the “Takata Way” that supports open effective communication openly and effectively and an adherence to Sangen-shugi the exploration of three “realities” which is comprised of Gen-ba or going to the location of the activity/problem e.g. the factory floor, Gen-butsu looking at problem first hand and Gen-jitsu gathering the facts to make a decision - realitybased decision making.

Despite this organisational philosophy Takata finds itself asleep at the wheel. Its flagship automotive airbag has allegedly been linked with the deaths of at least five motorists and over 139 injuries. The problem being a product defect that is only realised during the deployment of the airbag resulting in the rupturing of the inflator, sending metal fragments that have fatally injured unsuspecting users it was intended to protect. Potential causes for the airbag defects range from poor product handling, incorrect gas specifications, humid conditions, faulty welding to malfunctioning manufacturing equipment. 

The company was fully aware of the potential for the airbag to rupture during deployment 10 years prior to the recall but opted not to face the “reality” subsequently requesting the destruction of in-house test results and disposal of any evidence in essence creating a climate of fear amongst employees. Top management rather than implementing corrective action chose a default strategy of “do nothing” focusing on the bottom line not the triple bottom-line.

This strategic decision has resulted in the recall of over 14 million airbags from 11 different automakers and the allocation of over $655 million for quality costs. The reputational damage suffered by Takata is contributing to investor unease arising from reduced profit outlook and customer dissatisfaction with market share set to decline to 11% by 2020. Fortunately Takata has decided to “wake up to reality” taking steps to refocus the organisation efforts on quality by constituting an expert panel to examine the quality and safety issues. Quality not perception is reality.

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Chief Sustainability Officer - Where's the beef Chief...

The 21st century has seen the emergence of a new chief on the block - the Chief Sustainability Officer. A well heeled recruitment consultancy recently produced a report heralding the arrival of the Chief Sustainability Officer (CSO) to the "C suite" along with the emergence of sustainability and corporate social responsibility to the strategic agenda. Sadly the recent spate of high profile resignations US and in UK the imprisonment of former members of parliament for unethical conduct paints a less rosy picture of the importance of social responsibility  amongst the business and political elite.
The concept and use of the prefix "Chief" is a truly American phenomena in the United Kingdom and the Commonwealth the term Director is preferred. Therefore depending on the corporate culture of your organisation Chief Executive Officer or it's British equivalent Managing Director is used to describe the same role.
 The tribe of the corporate suite or "C suite" in the last 20 yeras has undergone an extraordinary expansion of "Chiefs" such as Chief Information Officer average salary £76000 responsible for the development and implementation of information technology strategy within the firm but so also does the Chief Technology Officer average salary £86000 and who can forget the Chief Web Officer. The aforementioned chiefs have emerged through the proliferation of the information technology, internet use and dare I say the lack of insight amongst some Chief Executives Officers in the 1990s to envisage the change being created by a then very young Internet.
Information technology concerns aside the "C suite" has seen it's share of exotic "Chiefs" such as Chief Visionary Officer, Chief Customer Officer and Chief Creative Officer. In terms of their value added contribution to strategic growth the question can be asked Where is the beef chief?
There is a danger that the new chief on the block the Chief Sustainability Officer may go the way of some of the other chiefs a mere title consigned to irrelevance. Sustainability is the key opportunity facing corporations in the 21st century and by nature should be the sole domain of the Chief Executive Officer as the firm's principal strategist. The advent of the Chief Sustainability Officer is an attempt to delegate the sustainability agenda and normalise it's role within existing paradigm of the corporate structure. Sustainability by its very mandate to incorporate the survival of future generations into present economic decisions is by nature inherently disruptive. The dynamics of the corporate structures are not designed to adjust to disruptive change. In order for sustainability to take root in organisations we need more sustainability warriors and champions not any more chiefs. As simple as it may seem lets make the philosophy of sustainability chief in the new capitalist model for the 21st century.

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