In the papers this week, it has been reported that the US Federal Housing Finance Agency has put the process in place to sue 17 banks over the subprime mortgage crisis – a key element which arguably lead to the global recession, a term we are all now very acquainted with. It made me think about the topic above linked to our recent themed discussions on the connection between diversity and business strategy. We all have our opinions and theories on what actually lead to the global economic crisis, but I think there is something more endemic that ought to be pointed out…
Let’s re-look at the Toyota case discussed in our last posting: On the 11th of February, 2010, the Economist in an article entitled: ‘Toyota – Accelerating into trouble’, reported the woes of Toyota showing the failure of the Japanese Board to spot a mechanical fault with the new Toyota Prius’ run-away acceleration and braking system. The fault lead to customer complaints and law suits that is reported to total approximately $5 billion, with Toyota having to recall approximately 8 million vehicles world wide. The overall market value loss totalled approximately $30 billion according to recent figures. In its overall evaluation of what might have gone wrong with Toyota, the Economist highlighted a cultural issue where leadership was based on “a rigid system of seniority and hierarchy” which prevented “new ideas” to questioning “the way things worked”.
The lessons learnt from the Toyota experience, I think, can be applied to assist understand what ‘suggestively’ facilitated the global economic crisis, the aim being to discover what ‘thought leadership’ actually means within this context. Indeed, what is core to both terms, ‘thought’ and ‘leadership’, and why is it important that to get leadership right?
Looked from an organisational viewpoint, thought is about thinking – creatively, leadership – a people-centred specific skill, is about the ability to provide inspiration, vision and direction – to all staff. The two terms are inextricably linked, one necessarily leading to the other, both facilitating innovation within the workplace resulting in a competitive and profitable business. Continue reading