A Time For Self-Reflection

Toyotas new CEO, Kiichiro Toyoda, recently took his company to task for following Detroit on the dead-end strategy of building large, gas-guzzling trucks and SUVs, a decision that has contributed to plunging sales. Toyota, he said, forgot who its customers were. Before announcing cost cuts, one of the first things Toyoda did was to cut his own salary by 30 percent.

Toyoda was engaging in hansei, or self-reflection. Its a strong cultural norm in Japan where CEOs have even been known to commit suicide to take responsibility for their failures.

Suicide may be taking things too far, but would it be asking too much to expect more American CEOs to take responsibility for their actions by engaging in a little self-reflection?

Wouldnt it be refreshing to hear Wall Street financiers admit that they screwed up instead of pointing their fingers at irresponsible borrowers, poor government regulations andunbelievablyexcessive savings in China? How nice it would have been to hear General Motors executives admit that they should have learned their lessons from the 1973 and 1979 oil crises.

Here in our backyard, Boeing is a company that could do with some self-reflection. Certainly, the recent machinists union strike was a blow to the company and caused some delays. And most local business executives agree that the state needs to do more to keep Boeing jobs in Washington. But Boeing management is beginning to sound a lot like the old GM in the way it blames everyone else for its poor performance.

Boeings own management record in recent years has hardly been stellar. In the early 1990s, the company tried to ramp up too fast to respond to large orders, resulting in massive production problems. Early in this decade, Boeing lost a tanker deal worth tens of billions of dollars after it made poor decisions that led to corruption charges. And during the past two years, Boeing has lost credibility by repeatedly overpromising and underdelivering on the production of its new 787 aircraft.

The strength of American companies is the result, in many respects, of their executives willingness to take risks. It took a lot of guts for Boeing to make the decision to build a commercial plane from plastic. Boeing should be praised for that decision, which will ultimately result in a far more fuel-efficient airplane. But was it really wise to spread the design and production of the aircraft across so many suppliers in so many locations? That decision was directly responsible for the delays the company is experiencing today. Boeing has time to fix its problems before it faces emerging competition from China, one of its key customers and suppliers. The first step is for the company to stop pointing fingers at others and start taking a closer look at its own management decisions.

A little self-reflection is in order.