Happy New Year, and Genchi Gembutsu

I don’t mean to be lazy about crafting a New Year’s message, but once again the good people at Toyota have made my job easy.
This is the first New Year for Mr. Watanabe as Toyota’s new President. In a memo titled New Years Greetings from Toyota President Watanabe gives us a view of what’s in store for the de facto number one automobile manufacturer.
In his message Watanabe begins by stating that to grow in hyper-competitive market, technology and localization are the keys. Technology development is the domain of innovation, R&D and things to come. Watanabe uses language more familiar to followers of kaizen when talking of localization. He says Toyota will take actions along three lines to make sure the foundation for growth is stable. These three things are built-in quality, raising cost-competitiveness, and the reinforcement of core competencies – their flexible production system, their people, and the gemba kaizen.
“We will also use the principle of genchi genbutsu, or “going to the source” to evaluate our strengths and weaknesses, identifying problems and bringing them to the foreground.” Here the emphasis on the first part of the sentence is Watanabe’s. It is significant that he is calling on everyone at Toyota to go back to the gemba to find and fix problems.
I’ve heard it stated from Toyota people that becoming the number one automobile company presents a problem for them. The concern stated is “Once they are on top will we lose our drive to improve?” Several years ago fearing that their success was making Toyota complacent, Chairman Okuda of Toyota said on national television in Japan “I want everyone to change. Failure to change is a vice.”
There is a hint of the long-term plan of Toyota in Watanabe’s closing paragraph.
“As I have stated in the past, as the presence of automobiles increases and societal demands intensify, Toyota’s very reason for existing is coming into question. Consequently, I hope to honestly, steadfastly and earnestly move ahead, taking another leap forward so that Toyota’s continued existence and its business activities help lead to happiness for people all over the world.”
Toyota’s very reason for existing is coming into question. Those are heavy words for a Happy New Year message. How many company presidents who are faced with becoming number one in the world would say something like that to your employees worldwide on the first day of the year? Watanabe is saying “Happy New Year. I have bad news. We’re going to be number one. This means we have to a tougher job. Get out of the office and go back to the gemba. Genchi gembutsu.”

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