Adopting Toyota's Methods via Values and Practical Application
In the dynamic world of the automotive industry, Akio Toyoda and Koji Sato, former and current presidents of Toyota respectively, face significant challenges and motivations in preserving Japanese manufacturing and the auto industry.
Challenges
The transition to carbon neutrality is a complex challenge both leaders have had to address. This involves deepening partnerships and maintaining team cohesion to achieve ambitious environmental goals while preserving traditional manufacturing strengths.
Global market and geopolitical risks have also tested Toyota's resilience. Under Akio Toyoda’s presidency, Toyota confronted difficult decisions such as ending production in Russia due to geopolitical risks, as well as managing the effects of natural disasters on global manufacturing and supply chains.
As the industry rapidly evolves with electrification and new mobility paradigms, Koji Sato’s role includes overseeing structural governance reforms to strengthen Toyota’s manufacturing and regional management capabilities. This comes while facing pressures from global competition and the need to keep the company’s manufacturing heritage vibrant and innovative.
Navigating the complex corporate governance environment is another challenge Sato faces. His management approach emphasizes “inheritance and evolution,” which balances the legacy of honed manufacturing skills with the need to adapt flexibly to changing market and technological landscapes.
Motivations
Preserving Toyota’s Manufacturing DNA is a strong commitment Akio Toyoda made during his tenure. He nurtured Toyota’s “product-centered” culture of manufacturing higher-quality cars, supported by hands-on leadership and encouraging direct engagement with employees at all levels.
Innovation leadership is another driving force for both leaders. They are motivated by ensuring Toyota remains at the forefront of automotive innovation, particularly in hydrogen technology and carbon neutrality, which they view as essential to future competitiveness.
Strengthening supplier and partnership ecosystem is also a priority for Toyota. Close relationships with suppliers and partners are crucial in driving performance and innovation in manufacturing and product development.
A global and local balance is another motivation for Sato. His governance emphasizes “region-centered” management, highlighting the motivation to adapt global strategies to local market needs, which is critical in preserving Toyota’s global leadership and its Japanese manufacturing roots.
A Sense of Responsibility
In 2021, at a Japan Automobile Manufacturers Association (JAMA) press conference, Akio expressed his sense of duty and love for Japan as one of the country's core industries. Despite the criticism he faced during his presidency, Akio believed that the real public opinion lies with shareholders and customers who support Toyota. His support came from the genba, the production floor, and his love for cars, Toyota, and Japan.
Akio became president during the Global Financial Crisis when Toyota was in the red and felt that he had to prove himself to both the company and its critics. Despite these challenges, Akio kept fighting to protect Japanese jobs and Toyota's manufacturing foundations.
In his 2023 JAMA New Year's address, Akio mentioned that carmakers rarely hear words of gratitude in their home country, despite their contributions to the Japanese economy. As someone who carries the expectations of the public, he feels a sense of responsibility towards Japan.
Toyota's new leadership team has inherited a company that faced numerous difficulties during Chairman Akio Toyoda's presidency, including a super-strong yen nearing 80 to the dollar. However, they carry on the legacy of preserving Toyota’s core manufacturing identity and excellence rooted in Japanese tradition while navigating the challenges of a rapidly transforming global auto industry.
- Akio Toyoda and Koji Sato, as leaders in the finance sector of the automotive industry, have to address the challenge of balancing environmental goals with traditional manufacturing strengths.
- The motivation for Sato, in his role as president, is to adapt global strategies to local market needs, preserving Toyota's global leadership and its Japanese manufacturing roots.
