https://toyotatimes.jp/en/toyota_news/1054.html#index01
I think many of us have read from 3rd party articles on how Akio Toyoda fought against the old, corrupt management structure and saved the company after a string of unfortunate events that almost brought down TMC. But here's the first time he spoke about the story himself. Here's a summary:
>> When he first got into the company, he carried the stigma of being the "princeling". In East Asian culture, we tend to think descendants of successful business people as spoiled and incompetent and will run their parent's company into the ground. This stigma prevented people in the company from working with him.
>> That's why he chose to work at the Genba ("the actual place", i.e. the factory floor) since the frontline workers are the most pragmatic and approachable. These people represent the true spirit of the TPS philosophy.
>> He later got transferred to managing domestic sales, and what he saw was a complete mess. While the factory was hard at work minimizing lead times and inventory, cars would sit on dealer lots for weeks without being touched, completely negating the benefit of JIT. There was no communication between production and sales. And that's when he decided to completely reform Toyota's domestic dealership network (which is arguably one of his biggest achievements apart from TNGA and GR).
>> Gazoo Racing received no official support from HQ because they criticized it as "Akio's hobby" (yeah, otherwise how are they going to fund the poorly managed 1 billion Euro F1 program?), so they had to race two second-hand Altezzas. He was very frustrated when other manufacturer's sports cars flew past them and realized Toyota didn't have any sports car offerings at the time.
>> During the Global Financial Crisis, TMC fell into the red for the first time, and people within the company waited for him to crumble under pressure. So they made him a scapegoat for the sticking pedal hearings at the U.S. Congress.
>> Back then, the company operated under the "Global Master Plan". The strategy is centered on "profitable cars for profitable regions" and maximization of volume and scale. We often call this the "beancounter era". Akio was really shocked when he heard about an American journalist commenting "Lexus is boring - a sales channel, not a brand". That's when he realized TMC has lost the plot: instead of a car maker, it turned into a profit-maximizing machine.
>> One of the key pillars of his reforms was the "in-house company system". This separates the main corporation into 5 individual companies (Lexus, Compact, Mid-size, Commercial/Vans, and GR) so each company could focus on delivering diverse products for different regions of the world and become the only car company to offer "full lineup" globally. Previously under the GMP, products were created mainly for the U.S. market first, then decontented for the international market.
>> Akio certainly isn't afraid of saying the company needs an "ultimate authority" which is often disliked by investors. As the Master Driver, every new product need to receive greenlight after he test drives it (which matches the story that the LC-F was not approved because he felt it wasn't fast enough).
>> Finally, he talked about the "executive reforms". When he became the president, there were 79 executives and 67 "senior advisors", all of which older than 62 years old. Most of these people had no clue how the Genba works, and most of the titles were completely redundant. After the "reform", only 14 executives remained and there were no "senior advisors". This encouraged individuals to thinks independently and act with initiative, instead of waiting for instructions from above. By doing so, the authority was brought back to the Genba and away from corporate HQ, so the engineers and workers have more say on how products need to be designed and manufactured.
I think many of us have read from 3rd party articles on how Akio Toyoda fought against the old, corrupt management structure and saved the company after a string of unfortunate events that almost brought down TMC. But here's the first time he spoke about the story himself. Here's a summary:
>> When he first got into the company, he carried the stigma of being the "princeling". In East Asian culture, we tend to think descendants of successful business people as spoiled and incompetent and will run their parent's company into the ground. This stigma prevented people in the company from working with him.
>> That's why he chose to work at the Genba ("the actual place", i.e. the factory floor) since the frontline workers are the most pragmatic and approachable. These people represent the true spirit of the TPS philosophy.
>> He later got transferred to managing domestic sales, and what he saw was a complete mess. While the factory was hard at work minimizing lead times and inventory, cars would sit on dealer lots for weeks without being touched, completely negating the benefit of JIT. There was no communication between production and sales. And that's when he decided to completely reform Toyota's domestic dealership network (which is arguably one of his biggest achievements apart from TNGA and GR).
>> Gazoo Racing received no official support from HQ because they criticized it as "Akio's hobby" (yeah, otherwise how are they going to fund the poorly managed 1 billion Euro F1 program?), so they had to race two second-hand Altezzas. He was very frustrated when other manufacturer's sports cars flew past them and realized Toyota didn't have any sports car offerings at the time.
>> During the Global Financial Crisis, TMC fell into the red for the first time, and people within the company waited for him to crumble under pressure. So they made him a scapegoat for the sticking pedal hearings at the U.S. Congress.
>> Back then, the company operated under the "Global Master Plan". The strategy is centered on "profitable cars for profitable regions" and maximization of volume and scale. We often call this the "beancounter era". Akio was really shocked when he heard about an American journalist commenting "Lexus is boring - a sales channel, not a brand". That's when he realized TMC has lost the plot: instead of a car maker, it turned into a profit-maximizing machine.
>> One of the key pillars of his reforms was the "in-house company system". This separates the main corporation into 5 individual companies (Lexus, Compact, Mid-size, Commercial/Vans, and GR) so each company could focus on delivering diverse products for different regions of the world and become the only car company to offer "full lineup" globally. Previously under the GMP, products were created mainly for the U.S. market first, then decontented for the international market.
>> Akio certainly isn't afraid of saying the company needs an "ultimate authority" which is often disliked by investors. As the Master Driver, every new product need to receive greenlight after he test drives it (which matches the story that the LC-F was not approved because he felt it wasn't fast enough).
>> Finally, he talked about the "executive reforms". When he became the president, there were 79 executives and 67 "senior advisors", all of which older than 62 years old. Most of these people had no clue how the Genba works, and most of the titles were completely redundant. After the "reform", only 14 executives remained and there were no "senior advisors". This encouraged individuals to thinks independently and act with initiative, instead of waiting for instructions from above. By doing so, the authority was brought back to the Genba and away from corporate HQ, so the engineers and workers have more say on how products need to be designed and manufactured.
