Call it the curse of 10 million.
Each of the three automakers battling for global sales leadership has reached for the 10 million-vehicle mark. Each took a punch in the gut.
In 2007, Toyota announced a goal of 10.4 million annual sales by 2009. In 2008, it unseated General Motors to become global sales king. In 2009? Bam! The unintended-acceleration scandal broke: years of lawsuits, regulatory probes, massive fines, management shake-ups and damaged credibility.
In 2013, GM sold 9.71 million vehicles, and 10 million looked attainable in 2014. Wham! Faulty ignition switch scandal. GM finished third, with 9.92 million sales.
Volkswagen closed in on Toyota for years — and topped 10 million in 2014, a close second. Halfway through 2015, VW actually led Toyota: 5.04 million to 5.02 million. Pow! VW got caught deliberately cheating on diesel emissions. Toyota retook the lead and finished atop on sales; VW fell back below 10 million in 2015, No. 2 again.
These stumbles were not coincidental.
Let’s make a distinction between what an auto company can control and what it can’t.
Global automakers operate in dozens of countries. Every year, some markets will be up and others down.
Similarly, outside events exert influence. The Great Recession affected the global sales race, as did the 2011 Japanese earthquake and tsunami. Companies can only react to unforeseen events.
But for Toyota, GM and VW, the big disruptors to reaching and retaining 10 million were unforced errors, not external stress. Like Greek tragic characters, their own flaws caused their downfall.
Maybe shooting for 10 million is blinding. Upon reflection, Toyota changed procedures to spot product flaws sooner. GM revamped its quality structure. VW replaced its CEO and other executives and is scrambling to remake its culture.
Let’s face it, setting goals gets tricky in this league. I’m awed by anybody selling 10 million vehicles a year. I can create oddball ways to digest the scale — enough vehicles to stretch 30,000 miles lined up bumper to bumper or enough seating for the population of Spain. But the impressive bit is running a business with dozens of cultures, scores of factories, thousands of dealerships.
All that bulk and diversity makes setting goals pretty tricky. A corporate goal must be simple enough for everybody to grasp but not so stressed that employees ignore basic principles.
Everybody must be focused on the main target. At the same time, employees must spot problems early — and be willing to warn their bosses. Managers must be willing to hear bad news.
At Toyota, at GM, at VW, that didn’t happen until things went bang.
That’s the curse of 10 million. To get big, you must dare big. To dare big, you must execute big. But to execute well, you must listen and hear.