Road to marketing excellence

There are many factors behind Toyota's success, but an effort in 2001 by professors at the Wharton Business School to define the essence of "The Toyota Way" found there were only two main pillars - continuous improvement and respect for people.

However, these two pillars comprise five principles: challenge, kaizen, genchi genbutsu, respect and teamwork.

Toyota Motor Thailand's senior vice president Wichien Emprasertsuk said these principles were "sort of generic" terms, and the key issue was really whether the culture of a business would allow them to be executed.

"For instance, many organisations may speak about the "5Ss" [standing for five Japanese words, seiri, seiton, seiso, seiketsu and shitsuke, which signify order, cleanliness, purity and commitment], but their workplaces are still dirty.

"My desk and that of my president are really clean. I clean the computer on my desk by myself. It's a basic disciplinary practice. The desk must be clean, with 'in' and 'out' work flows. White-collar workers are also required to observe a quality control cycle," he said.

Regarding the first of the five principles, Toyota encourages its workers to "challenge" established systems, but to do so humbly, according to Asian culture. Teamwork is clearly promoted at Toyota and no individual is encouraged to believe that he or she is outstanding or indispensable.

"No one is outstanding," Wichien said. "If I'm dismissed, everything will still be all right. You won't see Toyota executives on the cover of Fortune. They are invisible. Even in Thailand, you don't know who Toyota's executives are."

Having worked closely with Japanese colleagues for 30 years, Wichien uses Japanese as a second language. He said that although the word "kaizen" was usually translated simply as "continuous improvement," a closer meaning was "searching for a better way".

"Toyota exerts the best cost control in the world because of its kaizen 'habit'," he said.

Genchi genbutsu means "real place", which implies that executives must observe real things at the places where they actually happen, rather than sitting remotely behind their desks. For example, in a factory environment, executives must go out to see how their workers are undertaking their jobs. They must touch things and see the problems, before learning how to tackle them, he said.

"What is the job of Mr Toyoda [Akio Toyoda, grandson of the founder of Toyota]? His main task is travelling around the world, seeing the showrooms, visiting the operations," Wichien said.

Toyota's operations span six continents using a total of 15 languages. However, every staff member learns one basic doctrine, called "The Toyota Way". Every employee, from the shop floor to senior executives, must attend a "Toyota Way" course, which is tailored to suit various business disciplines, such as The Toyota Way in Manufacturing, or The Toyota Way in Marketing.

"Staff members come to the office voluntarily at 7.55am. They love their company very much. Is this inheriting a corporate culture? Many people say it's because we give our staff bonuses equal to seven months' salary.

"But this is a psychological technique, [involving] whether you pay [larger] monthly salaries or combine [the additional amount] as a [bigger] bonus. It's like the Chinese tradition of giving a red envelope [to staff at Chinese New Year]. The Western way would be to pay monthly, because they think workers can manage their own money," Wichien said.

obeya activities

He explained that another aspect of "The Toyota Way" was so-called obeya activities.

A simple translation of obeya is "big room", without the full meaning of "war room". All employees, from the company president down to low-ranking staff, must attend these activities, in which they reveal their weak points and ask for help from the others.

In contrast to an emperor-style management, the chief executive demonstrates his leadership through closeness with his staff, sharing the same simply decorated room and table, Wichien said. The room is full of boards displaying key performance indicators and results. Discussions go directly to topics under consideration, with presenters explaining missions that they have not yet accomplished.

"This is a weekly routine in which the president or myself have to sit on the ground right here," Wichien said, pointing to a slideshow picture.

crisis management

Toyota's marketing chief said the company had drawn up a survival plan in the light of the worsening global economic crisis. The plan was completed last October and the company's business plan is updated every week.

Wichien said business conditions were changing very rapidly and Toyota's businesses were linked with various parties in various countries, from a total of 100 first-tier suppliers to second-tier, third-tier and raw materials suppliers. Altogether there are about 1,000 companies with which Toyota has to coordinate its plans for raw materials, machinery, labour and production. Meetings are held every day to ensure precise forecasting.

"Profitability depends on the number of vehicle sales," he said. "We sold 250,000 automobiles in 2008, and we feel it's a challenge to achieve the same volume this year when the market will shrink to 90 per cent [of last year's size].

"You also need to know how far you can go and what the worst may be, because competitors will 'escape the death' as well, and maybe they won't have to fire their staff, suffer idle time and keep their dealers alive."

As advice to other marketers, Wichien suggested  they do whatever possible to meet the requirements of their customers by deeply studying the subcategories of each customer group.

toyota's secret

Wichien said the underlying secret of Toyota's success was its human resources development.

"It's not the money, the engineering, or the management knowledge because anyone can learn that. They use the same textbooks everywhere. But at Toyota we have our own curriculums and universities to develop our staff on top of their normal degrees," he said.

The company has a human resources system that provides fair assessment of its staff, and good performers are promoted.

"There is no envy [in this process] because the leaders  chosen will be outstanding [people], and everyone will realise their sacrifices and capabilities," he said.

However, the management job doesn't end with its own employees. One of Toyota Motor Thailand's challenges is to ensure that its 123 dealers, operating about 300 showrooms around the country and employing tens of thousands of workers, continue to perform at optimum level and allow the company to achieve both high sales and customer-satisfaction indexes.

To meet this goal, Toyota has drawn up a sales-manager development plan and has adopted a systematic approach to training and certifying sales staff at its so-called Toyota Academy.

Last year, Toyota won the Thailand Management Association's Thailand Corporate Excellence Award in the marketing category.

pichaya@nationgroup.com