Rachelle White
Leading Change in Organizations
Final Project
12-15-11
Toyota
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Abstract
This paper will explore the corporation of Toyota and the factors that make it successful
throughout their longstanding years and, more currently, in these tough economic times. This
will include talking about their culture, strategies, vision, values, change processes, and
leadership. In addition, I will include information on change processes, strategic initiatives, and
vision within this industry, a broader scope nationally, and a very narrow look within my own
change processes.
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Toyota
The economy has wreaked havoc on many companies and governments within the last
few years. Very few have been exempt from this and yet it also has been an opportunity to really
see who appears to be managing their operations and strategies better than others. In doing my
due diligence, I looked at many companies that I thought have done a good job getting through
the transitions needed during these bad economic times. But upon reflection and further
evaluation, I thought about what company I really thought best personified what we have learned
in this course and I realized that Toyota was the perfect choice. In looking at their success, you
would assume that they are forerunners in most everything they do. In fact, a lot of the strategy,
products, and innovations they utilize have been done before. So what makes Toyota excel
while others struggle? I chose Toyota because they are great at stability, strategy, and
operations. But I also chose them for several unique reasons that incorporated my own learning
process as well as looking beyond them to the industry and competitors they compete against.
Many years before their appearance in the U.S., Toyota started its existence. Toyota was
originally started in 1924 under the name Toyoda Automatic Loom Company by Sakichi
Toyoda, a brilliant inventor (“History of Toyota”, 2011). One of his inventions was licensed to
a British concern for 1 million yen and this helped found Toyota Motor Company. The Japanese
government helped support this new company because, at the time, they were relying on foreign
companies to produce vehicles for the war in Manchuria and money was starting to become
scarce. If they could create the same vehicles domestically, they could reduce costs
considerably.
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In 1929, Sakichi traveled to the United States and Europe to investigate Automobiles and
by 1930 Kiichiro Toyoda, Sakichi’s son, started experimenting with engines and eventually took
charge alongside his father. They first experimented with two cylinder engines but ended up
copying the Chevrolet 65-horsepower straight-six, using the same chassis and gearbox with
styling copied from the Chrysler Airflow (“Toyota Corporate History, 2011). In 1936, Toyota
produced the model AA and in 1937 the Toyota we know was established. From 1936 to 1945
they saw only mild success with only 1,757 cars and while they saw a little more success
building trucks, but they were a long way from where they are today. In 1945, the war was
declared over and the Toyota Motor Corporation received permission to start production of buses
and trucks again working side by side with Americans in an effort to rebuild the island nation’s
economy. In 1940, the U.S. War Department had instituted the Training Within Industry (TWI)
program to provide process improvement consulting and employee development services to warrelated industries. Although the War Department abandoned the TWI program in 1945, its
methods were introduced in Japan and subsequently Toyota. Taiichi Ohno, father of the famed
Toyota Production System, used TWI to help form the basis of kaisen culture and lean
manufacturing. Years later, a Toyota trainer allegedly shared on old TWI manual with someone
from America to prove that their production methods could work in the United States (Melito,
2006, Para. 2).
In 1957, Toyota opened its first Dealership in Hollywood, CA. Two vehicles were
imported to sell in the United States, the Land Cruiser and the Toyopet. Neither vehicle sold
well. The Toyopet was an incredibly reliable vehicle that was popular in Japan. In American it
failed miserably for being underpowered and overpriced. It was taken off the market completely
and in 1965 the Corona was introduced. This car took off as well as most of the subsequent
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models. Toyota was extremely small from the start and had progressed to the 93rd largest nonAmerican corporation in the world by 1963. In 1966 they had already jumped to 47th and were
establishing themselves as one of the big auto manufacturers in the world (“Toyota Corporate
History, 2011).
After reviewing the history of Toyota it appears that there really is nothing special about
their company and the question arises, “How did they get to be such a superpower?” They are
known for their innovativeness and yet their first attempts were similar technology as Chrysler
and GM. They are certainly known and famous for their lean processes and yet it appears they
also took note and borrowed initiatives that the United States Government implemented in the
1940’s. So what has Toyota done differently? The reason is long term planning coupled with
continuous feedback sought from its customers on how to improve its products (Lifton, 2008,
Para. 1). They are not so arrogant that they believe that they know what the public wants to see.
They spend an excessive amount of time researching and finding out what people want before
making their product.
In addition, they have created a culture within their company that doesn’t chase new
ideas every other year to stay ahead. Instead of responding to trends, fads, and quarterly
numbers, Toyota looks far ahead, and develops products resonating for a long time (“The Rise of
Toyota”, 2009) As stated by Beach (2006), Leaders six prime responsibilities are:

Assessment

Culture

Vision

Plans

Implementation
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Follow-Through (Beach, 2006, p. xviii)
Assessment
Toyota has spent more than their share of Assessing the market, from Sakichi Toyoda’s
first visit to Europe and American to research engine’s, to re-assessing what American’s wanted
when they failed in offering the Toyopet for a different culture of people. Toyota has
continuously worked to assess their environment and their customers to determine what was
wanted and needed in the industry. A large part of Toyota’s continued success has come from
sensing changing market needs and adapting its business model as customer tastes change.
Toyota spends a lot of effort to understand what customers want and what they will buy (Stanley,
et al., 2006, p. 7).
Another great example of their assessment is the Prius. California produced a law that by
1999 any company wanting to sell passenger vehicles in California would need to sell a
minimum of 2% of zero emission vehicles. Due to this government initiative both GM and
Toyota researched and attempted to meet this challenge. GM came up with the EV1 that was a
battery powered, 4 passenger car that ran 100 miles on a charge at a top speed of 60 mph (Lifton,
2008, Para. 2). In 1997-8, the state of California repealed the law and GM immediately asked
the 1000 lessees of the EV1 to return the cars that they absolutely loved because they did not feel
the need to continue working on this technology without the government mandate. Toyota
correctly saw the California change of heart as temporary only and assumed that the industry had
been only given a reprieve and not a pass and decided to start selling its hybrid Prius with no
competition (Lifton, 2008, Para. 5).
Culture
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Their culture is what I truly think Toyota excels at above everyone else in the industry.
Their website states “We use the Toyota Way to continuously improve our processes and
products, to listen and build trust, and to respect and empower the individual and the team.
(www.Toyota.com). There two values are in “continuous improvement” and “respect for
people”. They have five practices that they rely on to build their business:

Challenge: To build a long-term vision and meet challenges with courage and creativity.

Kaizen: To continuously improve our business operations, always striving for innovation
and evolution.

Genchi Genbutsu: To always go to the source to find the facts and make correct
decisions; to build consensus and expeditiously achieve our goals.

Respect: To respect others and the environment, to build trust, and to take responsibility.

Teamwork: To stimulate personal and professional growth, maximize individual and
team performance. (www.Toyota.com)
In creating this culture, they have made their team part of the solution and they are certainly up
to the challenge. Toyota’s production principles include changing a work culture to welcome
problems as opportunities for improvement rather than reason for blame (Mamula, 2011, Para.
4).
Vision
In April 2002, Toyota adopted the 2010 Global Vision, a vision for meeting mobility needs
in a way that respects the environment and all people. Four key themes based on trends seen as
developing from 2020 to around 2030 are:
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
Toward a recycle-oriented society

Toward the age of IT and ubiquitous networks

Toward a mature society (the decline of nationalism and war)

Toward motorization on a global scale (societies with little private transport gaining
more)
These are linked to the pursuit of a new global image for Toyota with four key components: kind
to the earth, comfort of life, excitement for the world, and respect for all people. (“Toyota
Corporate History”, 2011) Their vision has always been their lead and their stability in the
market and as you can see in their 2010 vision, they aren’t looking 3-5 yrs out but closer to 1020 yrs into the future.
Plans
Many people believe that Toyota’s success is in their innovation, customer research, and
lean methods. Those same people have also found that it is very difficult to replicate. In reality,
Toyota's success derives largely from its planning and execution system, says lean consultant
and author Pascal Dennis, a former manager at Toyota Motor Manufacturing Canada. Called
hoshin kanri (or hoshin planning), the management system (which was not invented by Toyota)
helps Toyota remain competitive year after year by keeping the entire organization's eyes and
actions focused on achieving the same goals (Jusko, 2007, Para. 3) Seldom does a vision contain
very fine detail about the future, that will be spelled out in the plans that derive from the vision
(Beach, 2006, p. 52) Vision is an extraordinary thing to have but without the planning and
implementation it is just a dream.
Implementation
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I think their numbers alone speak well to their implementation. Prius sales worldwide
have topped over 2 million. They are introducing several different and new versions in the very
near future and continue to look to improve upon a model that has been widely successful.
When they were first introduced into the American market they did so with very little success.
Instead of going back to the market where they were doing well, they regrouped, researched,
planned and implemented to introduce a new car that was successful.
Follow Through
Lean advocates talk about Toyota with a respect bordering on awe. “We still tend to talk
about making improvements in final assembly, in trying to cut a day of flow,” says Steve
Westby, vice president of manufacturing at Boeing Commercial Airplanes. “When you listen to
the Toyota guys, they’re trying to figure out how to cut half a second.” (Laurenzo, 2005, p. 34)
They are not content to find new and better solutions. They have a culture within their programs
that will continue to improve upon every innovation and idea because they ASSUME it can be
improved upon.
Another great example of their follow through is during the recent tough times they have
had with their recalls. It was very humbling for a company known for their quality to have
issues. They stood behind their products and did what they do best. They analyzed what the
problem was and realized that they were growing so fast that they were not training everyone on
the “The Toyota Way” like they needed to. They chose to slow production, back up, and work
through the steps again so they could ensure they got it done correctly.
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Conclusion
I wrote about Toyota because they truly have an enviable culture where everyone is
respected and held accountable for quality. The expectation is one of adaptability and change
and they have made an extremely successful company out of their ability not to be complacent. I
also wrote about Toyota because the industry in general reminded me a great deal of what we are
currently reading about. Revolutionary change tends to be far more difficult for existing
leadership than for new leadership. This is because the existing leadership often has itself
absorbed the organization’s culture and has difficulty conceiving of anything but minor
modifications of the status quo as solutions to the organization’s problems (Beach, 2006, p.41).
In not picking on one specific leader, I think this statement is perfect for the leadership within the
industry of Auto Manufacturers. Collectively, they were all doing well and I think each, in their
own way, were struggling to be strategic because they had absorbed their superior culture for so
long it was hard for them to imagine they really needed to make big changes.
It was fascinating that when I read about change I could immediately envision not the
great ones, but the ones who struggled with the concept. The auto industry was the first but there
were many others I thought of when reading through our assignments. The one thing I perceived
all of them had in common was that they were all on the top at one point and struggled to believe
that they needed to make changes BECAUSE they were at the top. Kodak was a household
name. They had everything going for them and everyone could see that film was going away
and digital was coming in, but they refused to make that switch and hurt themselves heavily.
And lastly, I can certainly add our own government. I have to smile when I realize that we gave
up procedures back in the 1940’s for process improvement and employee development that could
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have been utilized all along in eliminated excesses and overruns that are so notorious in our
government procedures.
I am most interested, however, in my own industry which I see in the middle of this same
transition. I am in HealthCare and, through many factors; we are in the need of major changes. I
hear a lot more of the comments like “We will affect patient care if we try to do more with less”
than “What can we do differently to make this work”. Already we are seeing corporations and
ministries band together to improve efficiencies where once small hospitals stood alone. We are
on the cusp of dramatic changes and I hope the revolutionary and mostly unwanted changes will
bring about amazing innovations and initiatives.
Lastly, I would like to talk about my own personal transition to changing my mind.
Ultimately, leaders cannot be effective-and cannot call for sacrifice-unless their stories and their
persons strike a resonant chord with their audience (Gardner, 2004, p. 75). I believed that my
job was to support America. I strongly supported the troops, kept my money in stocks during
911 and bought American cars. The American Auto Industry had a wonderful campaign that
truly struck a chord with me when they appealed to “buy American”. As a young adult I truly
wanted to be patriotic and the thought of someone coming in and taking away our jobs was very
upsetting. I vowed to do my part and always buy “American made cars”. The tarnish wore off
the star a little bit when I found out that “foreign” cars were being built in America and some of
the American cars were being built abroad. I felt a little duped but wanted to continue to support
those people who desperately needed jobs. There were multiple small revelations through the
years that had me question things until I finally realized that I was not only naïve, but an enabler
in their process. Because they appealed to the innocent, hardworking, blue collar industry and
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we responded, the Auto Industry really didn’t have to make changes. We allowed them to place
themselves in the role of victim instead of competitors in a market. I now see the government
bail-outs, programs, and agencies throughout the United States that companies utilize and need
to survive, and I am not sure if we have really taught anyone that change is needed for survival.
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References
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Beach, L. R. (2006). Leadership and the art of change: a practical guide to organization
transformation. Thousand Oaks: Sage Publications
Gardner, H. (2004). Changing minds: the art of science of changing our own and other people’s
minds. Boston, Mass: Harvard Business School Press:
Jusko, J. (2007, Nov 1). Strategic Deployment: How to Think Like Toyota . Industry Week.
Retrieved Dec 7th, from
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15151.aspx
Laurenzo, R., (2005, June). Leaning on Lean Solutions. Aerospace America
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Melito, S. (2006). Toyota Resumes Production. GlobalSpec.com
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http://www.toyoland.com/history.html
Toyota Global. (2011). History of Toyota. Retrieved Dec 11, 2011, from: http://www.toyotaglobal.com/company/history_of_toyota/1867-1939.html