Toyota leaders were expected to possess integrity and energy while remaining open-minded. By developing its leadership model, the company hoped that by engaging all employees throughout its organization in continuous improvement initiatives it could foster engagement across its operations.
The Toyota Way values established by the founders of Toyoda Automatic Loom Works and Kiichiro are founded upon respecting people, continuous improvement and seeing conditions first-hand (genchi genbutsu). These values foster an environment conducive to experimentation and innovation.
Origins
Toyota is one of the world’s most respected businesses, due to an unmatched production system approach passed down from generations of Toyoda family leaders. Beginning with founder Sakichi Toyoda’s establishment of Toyoda Automatic Loom Works as a world-renowned loom manufacturer and his son Kiichiro Toyoda expanding Toyota Motor Corporation from textile production into automobile manufacturing in 1933 – Toyota has grown into an unrivalled player in its automotive sector today.
Toyota’s production systems are guided by the Japanese concept known as genchi genbutsu, or “go see for yourself,” which literally translates to “go witness for yourself.” This principle asserts that tacit knowledge can only be acquired through direct experience, hence why Toyota senior executives regularly visit factories and dealerships to see firsthand how their cars are manufactured; this practice demonstrates to employees that leadership at Toyota really understands the product they’re offering rather than simply talking the talk.
Toyota goes above and beyond commitments to genchi genbutsu to build strong customer and dealer relationships. That is why the Toyota Way emphasizes respect for customers and dealers, going to great lengths to maintain relationships with its customers such as offering free maintenance or loaner vehicles, while dealers are trained to offer exceptional customer service and help find vehicles best-suited to customers’ needs. Furthermore, localizing production and design in its markets of operation has allowed the company to establish long-term relationships with suppliers as well as creating jobs in communities where its products are sold.
Localization also helps Toyota respond more readily to the diverse needs of its consumers, such as manufacturing their trucks in the US to avoid high import tariffs and make them more affordable to American drivers. Furthermore, Toyota combines innovative technologies with new designs in hybrid and advanced safety vehicles; constantly adapting and improving offerings in response to consumer feedback while striving to become an automotive innovator.
Innovation
Toyota understands the significance of innovation as a cornerstone of their success, striving to improve existing products while creating new ones – this strategy has allowed them to outshout rival car companies and become one of the premier car makers globally.
Kiichiro Toyoda, founder of Toyota, had a vision to produce cars in Japan without using imported technologies – something even his formidable zaibatsu did not consider possible at that time. Yet Kiichiro believed in himself and his product and motivated his team to break free from old routines in order to reach for something impossible – this incredible persistence cemented Kiichiro as a legendary figure and gave birth to Toyota Production System.
The company takes an innovative approach to innovation that sets them apart from other car manufacturers in that it emphasizes employee involvement in creating innovative ideas, rather than solely depending on management for these efforts. Employees are encouraged to express their ideas and opinions regarding ways of making things better – this process being made very open so as to allow for honest disagreement that can spark new innovations.
As these ideas are implemented into reality, heijunka becomes the cornerstone of Toyota’s lean and agile manufacturing process, with production decisions becoming more flexible in response to changes in the market, thus keeping costs at minimum for its supply chain.
Additionally, this company places great emphasis on customer satisfaction and has established strong bonds with both dealers and customers alike. Their aim is to understand their customers’ needs and desires thoroughly and go out of their way to build relationships even on the factory floor itself.
The company embraces an integrative design philosophy, where design encompasses both technical and emotional elements of its product. Therefore, several studios are involved in crafting designs for its cars to ensure each has the potential to connect with buyers and become successful.
Continuous Improvement
Toyota’s continuous improvement efforts arose out of its culture and set of management principles, codified by former Vice President Shinichi Shimoyama in 1982. These include an emphasis on problem identification, quick implementation of consensus-based decisions made through democratic processes, continual reflection and improvement via Kaizen and reflection for further refinement and growth.
Toyota places great emphasis on experimentation and learning from both successes and failures, leading to its employees trying out new ideas frequently – contributing significantly to its ongoing success.
Toyota’s unfailing optimism and willingness to experiment is what propelled it into becoming the world’s top automaker by 2020. Toyota always looks to innovate, whether that be through testing new production methods or changing vehicle names from Made in Japan to Made by Toyota. Through this constant pursuit of improvement has come TPS: Toyota Production System
TPS may have originated in the 1950s, but its roots stretch much deeper. TPS was founded upon jidoka production techniques created in 1920s by Toyota founder Sakichi Toyoda for automating quality control on automatic looming machines to increase productivity and decrease defects.
Toyota first applied its Jidoka manufacturing concept to car production with the Toyopet Crown, the country’s inaugural domestically made passenger vehicle, produced between 1956 and 1957. Since then, however, groundbreaking technologies such as self-driving cars and the iQ–a compact car with interior features of large luxury sedans–have been introduced by this innovative car maker.
Toyota remains an incomprehensible entity to outsiders even today; the company pays low dividends and hoards cash, seemingly out of inefficiency. Yet these practices are part of an overall plan: Toyota managers advance slowly through its hierarchy; its executive vice presidents aged on average between 60-61 in 2006. Such gradual development helps maintain an inclusive corporate culture for Toyota.
Leadership
Successful businesses require much more than simply producing quality products; visionary leadership is necessary to shape its future and motivate others to alter it. Toyota leaders have shown these characteristics throughout its history, especially during the challenging 2000s when environmental concerns and increased competition forced the company into change. Hiroshi Okuda stood out during this era as an innovative strategist whose foresight and innovative strategies helped set them on their current course toward automotive dominance.
Toyota follows other great companies’ practices of cultivating its leaders from within by hiring from across its enterprise; employees promoted into senior positions come from all areas such as sales, engineering, marketing and manufacturing rather than just one division or area of operation. This helps ensure employees gain a complete understanding of the product as a whole as well as how its components come together; further enabling them to identify areas for improvements more easily.
Toyota systems also foster a culture of teamwork among their workers. Employees are encouraged to collaborate on quality circles outside of working hours, which has contributed to Toyota vehicles becoming the most reliable and fuel efficient vehicles on the market. Employees are rewarded for their hard work with bonuses exceeding industry averages.
Toyota values its employees but also pushes them. Their Toyota Production System (TPS), with no time buffers or inventory to hide behind, demands that employees think on their feet and find solutions themselves rather than waiting for a superior to make a decision. This translates directly to their workplace where employees have freedom to find solutions themselves rather than waiting on an order from above.
Toyota leadership excels at cultivating humility. When an employee is promoted, they are informed that many others were within an inch or two of getting their new job. When workers receive compliments or praise for their hard work and improvements made, these accolades don’t act as bragging or showpiece praise – rather they serve to encourage further improvements that benefit customers first and treat employees with dignity. This all forms part of Toyota’s company culture which puts customers first while treating its employees with respect and dignity.
