Notably missing from my recounting of this story are Principles 2-6 of the Toyota Way (under the category, The Right Process Will Produce the Right Results). These deal more with the processes used at Toyota to do the detailed work. These principles (creating flow, leveling the work load, stopping the process to ensure high quality, standardization) are central to product development and to the development of these breakthrough vehicles. They were the details of the day-to-day process that allowed the Prius to be completed in record time once the G21 group had settled on the technical concept.
Other key Toyota Way principles that can be seen in the stories of the Lexus and the Prius include the following.
Principle 1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Both the Lexus and the Prius projects were long-term investments in the future of the company. At the time the Prius project was initiated, nobody knew whether hybrid vehicles would go anywhere. But Toyota decided to be the first and bet that hybrids would be an investment in the future. The best people with active support from the very top of the company were assigned to the Prius and they all felt like they were working on a project that was critical to the future of the company. Similarly, who knew whether the Lexus could successfully penetrate the luxury market dominated by European prestige? Investing in the future, not short-term profits, was the focus of these projects.
Principle 9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Both of these programs were driven by leaders who were absolutely committed to the success of the programs. In general, chief engineers epitomize the leadership philosophy of Toyota. They grow up in the system, starting with the most basic engineering work and only gradually, after 15-20 years of engineering practice, getting project management responsibility. They are selected because of their combination of technical skills and leadership abilities developed through these years of experience. They seem to fit the “this yet that” philosophy of Suzuki at work in the development of Lexus. They are leaders, yet they are also exceptional engineers. They are visionaries with a broad perspective, yet they understand the development of the vehicle down to the tiniest detail. They are independent thinkers doing what they believe is best for the customer and the product, yet they are experts at working the Toyota network and can garner all the resources and approvals needed. They do a lot of work as individuals that other managers might delegate, yet they are able to motivate all those who touch the project to do exceptional engineering work that at first seems impossible.
Principle 13. Make decisions slowly by consensus, thoroughly considering all options; implement rapidly (nemawashi). It’s clear that the chief engineers are target-driven and timing-driven, yet always willing to step back and reflect on the range of options that are available. One thing remarkable about both the Lexus and the Prius is the “no-compromise” attitude of the chief engineers. At some point, with the intense time pressure to do a seemingly impossible job, one would expect the leader to say, “OK, let’s pick a direction and just get on with it.” But repeatedly throughout the Prius development, Uchiyamada would step back and say, “Let’s stop and reflect” (hansei). “Let’s rethink what this project is about.” “Let’s test every possible design for a hybrid engine in the world.” “Let’s have a design competition and get all the styling studios to generate competitive designs” (as discussed in Chapter 19). Suzuki decided to do what had never been done in engine technology, aerodynamics, and fuel economy through experimenting and trying new ideas. These do not seem to be the things a rational person does to get a job done quickly. But central to the Toyota Way is thorough consideration in decision making. It is not acceptable to quickly choose a direction and go racing off in that direction. Exploring all possible alternatives and considering pros and cons of each while consulting all partners who have something to offer allows Toyota to execute fast, once a decision is finally made, without backtracking to remake decisions.
Is Toyota a conservative company? Yes. Does it seem to be very plodding and slow to make changes? Yes, certain types of changes. Is it innovative? Remarkably so. In this regard, Toyota itself is another of Suzuki’s “yets.” Go slow, build on the past, and thoroughly consider all implications of decisions, yet move aggressively to beat the competition to market with exceptional products that break the mold. This is the Toyota Way.