Eiji Toyoda and Management Muda
Eiji Toyoda is well-known to Toyota enthusiasts but almost unheard of among general management commentators and observers. He did make it into the Automotive Hall of Fame in 1994 (following Shoichiro Honda, the second of only six Japanese individuals among 136 industry leaders to be so honored) but has probably never even been mentioned in an analysis that is not specifically about Toyota, the company.
Enthusiasts know how tremendously influential Eiji has been to the development of Toyota and its revolutionary management system. Perhaps his story will never be fully told, but Eiji, a former president and chairman of Toyota, could be the most important figure in all the rich history of the company’s evolution.
During my tenure with Toyota in Japan from 1983 to 1991, Eiji’s presence was felt in the company everywhere, all the time. The first time I met him, on a dowdy cruise ship in August 1984 during an annual employee event called the “Toyota Cruising Seminar” (a story in itself, for another day), Eiji was as he was every time I had the good fortune to meet him: straightforward, totally unpretentious, and intently focused on the practical matters at hand. Each year, for the purpose of team-building, a different top executive (from the six individuals who ran the company -- the chairman, president, and four executive vice presidents) -- would join the five-day cruise along with several hundred young employees. This year as probably every year, the young employees were reverential but eager while Eiji was somber yet engaged, approaching this opportunity to spend casual time with the company’s younger generations with the same seriousness and sense of gravity that he approached stewardship of the business, an attitude that was reflected in every corner of the company.
Toyota approached the welfare of all constituents -- the livelihood of its employees, the desires of its customers, the welfare of subsidiaries and partner companies and even competitors -- with full awareness of the responsibility that executive decision-making entails. That awareness was reflected in everything, from hiring decisions, to expansion strategy, and even to small matters concerning the construction of a new physical facility. Little is left to casual consideration when every investment is thought of as a long-term obligation: “I’m hiring this person today -- do I think I will need him in 20 years? We’re constructing a new building in one of our communities -- are we committed to invest in the business locally to justify all that that entails?” Eiji wanted to tour every Toyota facility, even as global operations became more and more far-flung. Each new undertaking wasn’t just a matter of the dollars and yen of an ROI calculation. It was the beginning of a commitment.
Of course Eiji knew that no business can predict the future. Anything can happen. But, I’m sure he also recognized that what a business can and should do is to commit to uphold commitment to meet obligations, to do everything within its power to live up to the responsibilities it takes on. Eiji described himself as forward-looking, never thinking much about the past. He recognized that the future is unpredictable, and he was determined to face it with a spirit of “Let’s turn our attention there and do what we can do, then tackle each challenge as it appears.” Even after he retired, the respect afforded Eiji among Toyota executives was palpable and frequently expressed: “What would Eiji think, do, say?” So, surely he is a good authority on the evasive topic of “leadership.”
The month following my first encounter with him, Eiji began telling his story in a series of articles in Japan’s top business newspaper, the Nihon Keizai Shinbun, which sent me to my Japanese-English dictionary so I could read them at my desk in Toyota City. One year later, those articles were compiled and published in a book called Ketsudan (Decision). They were published two years after that in an English translation with the title Fifty Years in Motion -- an Autobiography by the Chairman. Unfortunately, parts of the original articles were edited out of the Japanese book and parts of the Japanese book were further edited out in the English book. So, here is my own translation of my favorite Eiji quote:
“The people at the top are just flag-wavers. It is muda to wave your flag and have no one follow. What’s important is to wave your flag in a way that makes people want to follow.”
Eiji Toyoda turned 95 years old on September 12th. Let’s hope his story is eventually told more fully and his contributions to business management afforded the recognition they deserve.
See you next week.
Lean Enterprise Institute
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