The New Year’s message to Toyota employees on January 8, 2019 by CEO Akio Toyoda’s was that times are changing. The automotive industry is in a once-in-a-century technological revolution. Products will need CASE: Connectivity, Autonomous, Sharing, Electrified. This requires new knowledge, skills, technology. The talk of change, bridging today to the future, is never abstract or visionary. Toyoda goes back to fundamentals and gets real. Here are some highlights.
Let’s be pros. What does Toyoda mean by “professionals”? He put up a slide with two Japanese words: specialization or “outstanding expertise in a specific area” and human ability. What special skill or ability do you bring? How good are you at working with other people?
Let’s talk real world. The two-phrase explanation of their real world is Toyota Production System and cost-reduction. This is about business excellence and remaining competitive. This is the foundation.
Let’s get real about the future. Toyoda has no pretense about his company’s approach to product innovation. A slide shows an upward arrows from Imitation to Improvement to Innovation. Yes, the CASE revolution requires innovation, but he essentially says, “Let’s do what we do well, improve incrementally, and innovation will come,” rather than announcing big bets on new technology or chasing trends.
Let’s go to the real place. Toyoda spends a lot of time talking about the gemba. He stresses that he considers any “flesh-and-blood” （血が通ってる職場）workplace to be a gemba even if it is an office. This expression can mean means physical rather than abstract, humane rather than mechanical, warm and compassionate rather than formal and bureaucratic. It is interesting that what Toyoda considers a “gemba” is not primarily “where we add value to the customer” or “where the work gets done” but where the best of humanity is in evidence.
Let’s be real about respect. After showing a video of networking dinner of senior gemba leaders from across Toyota, he says that immediate mutual respect between them is possible because they “speak a common technical language and are genuine professionals.” They understand the shared struggle to gain technical skill. “In the face of technical skill, we can all become humble.” There is always a higher level of skill, we can always learn more, and develop higher levels of technology. It is a humble reminder that scientific knowledge and technical skill are greater than any one of us.
What is a real Toyota leader? The current culture at Toyota is that they value a leader as someone who manages rather than takes action themselves, as a person who has very few weaknesses rather than a person with an extraordinary ability, as a person who brings years of service rather than youth and skill. He wants to change this. He envisions Toyota as a company in which everyone strives to improve themselves and become a “white cap”. The white caps are Chief Leaders who oversee 3 to 4 Group Leaders (who themselves oversee 5 to 8 Team Leaders). The CLs are responsible for maintaining a high level of technical know-how and developing those below them. Toyota has been reviewing this structure, roles and responsibilities, and how to bring more young people into the CL roles over the past five years.
Let’s be real about your career. Toyoda’s message is refreshingly honest. “You’re doing this for you, not for Toyota.” Everyone in the room recognizes that lifelong guaranteed employment is no longer a reality. He does not ask the employees to sacrifice and dedicate themselves to the growth of Toyota, with the promise of long-term mutual benefit. He says, “Develop yourselves for your own benefit,” and “Aim to become a professional who can compete outside of Toyota, even without using our name.” In other words, use your time at Toyota as a stepping stone to further your own life and career goals. At the same time he says, “Toyota management will strive to build an environment that will make people want to work at Toyota from the bottom of their hearts.” This is a new spin on Taiichi Ohno’s “game of wits” or friendly competition between leader and worker, towards a common goal. Employees improve their skills and employability while management improves the desirability and opportunities to grow at Toyota.
Akio Toyoda continues to take Toyota the “back to basics”, laying out a vision for the future by reflecting deeply on their guiding principles. We are familiar with the importance of gemba, which derives from the principle of genchi genbutsu (going to the scene to confirm for ourselves). Even this comes from a deeper principle that we can only change our reality for the better if we get real, face the truth, speak plainly and engage people as individuals.