How Toyota Became #1: Leadership Lessons from the World’s Greatest Car Company
By David Magee
Portfolio £15.99, 256 pages
FT bookshop price: £12.79
For anyone who has studied Toyota’s phenomenal success, or owned one of its cars, tales of its early days make for amusing reading. When the Japanese carmaker first began exporting to the US in the late 1950s, it sold the Toyopet Crown, its flagship vehicle. Its promotion for the bulgy sedan included ads proclaiming “Toyopet is your pet!” Toyota sold fewer than 300 vehicles in the US in its first year.
Fifty years later, Toyota has replaced Ford as America’s second-largest carmaker. It sells one in six vehicles in the world’s largest car market, and by next year it will have capacity to produce more than two million vehicles in North America. The Camry has been America’s top-selling car for more than a decade. Worldwide Toyota employs more than 300,000 people, and will soon overtake General Motors as the industry’s largest producer.
How Toyota Became #1, the latest on a long shelf of Toyota literature, purports to tell just how the car maker achieved this. Toyota’s factories, whether in Kentucky or Guangzhou, live by principles such as kaizen, or continuous improvement, and genchi genbutsu or “going to see yourself” when problems crop up.
Unlike America’s carmakers, who landed themselves in trouble by pushing out big vehicles to keep their factories busy, Toyota produces vehicles that customers want. Competitors have copied its manufacturing techniques, down to the andon cord workers pull to stop the assembly line when problems appear.
Importantly, too, Toyota has been a good corporate citizen. While the Detroit producers have tried to blame some of their woes on the weak yen, American consumers have no interest in Japan-bashing, and are loyal buyers of Toyota and Lexus, America’s top-selling luxury brand. In the 1990s, while Detroit was cashing in on profitable large vehicles, Toyota was investing almost $1bn in developing the Prius, now the world’s top-selling hybrid car.
Absent of any deeper journalistic insight, corporate success stories can make for dull reading. David Magee, who has also profiled Nissan and tractor manufacturer John Deere, seems to be pitching the book to business readers who might learn from it. Toyota’s executives live by the values of parsimony, customer focus and humility that are – by all accounts – honoured widely. In this account, however, things such as “the seven types of waste” sound platitudinous or unintentionally funny.
The book quotes Toyota’s former top US executive Jim Press: “You don’t learn from success; mistakes are what shape us. We treasure mistakes.” What the book does not do however is pay proper tribute to Toyota’s ruthless streak, although there are inklings: one Kentucky plant worker speaks of the videotape as Toyota’s most “effective weapon” in fighting waste.
Since this book’s completion, Press and two other senior US Toyota executives have defected to Chrysler and Ford. Toyota has also seen its vehicles downgraded in the closely followed Consumer Reports’ US league tables. Toyota’s rise to number one is now a fact, or will be shortly. Its next chapter will focus on the equal or perhaps more daunting challenge of defending its position at the top.
John Reed is the FT’s motor industry correspondent
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