Use Self-Reliance and Responsibility to Decide Your Own Fate

February 14, 2009 - Tags:

One of my favorite discussions of the history of the development of the Japanese automobile industry is a article by Michael Cusumano, The Japanese Automobile Industry (Cusumano, 1985), that contrasts in detail the evolution of Nissan and the evolution of Toyota. In his article, Cusumano clearly illustrates the different trajectories of the two companies.

One of the key differences is that Toyota always chose a path of self-reliance and “let’s do it ourselves,” rather than relying on outside business partners. For example, when Toyota wanted to get into the luxury car business, it didn’t buy BMW. Instead it created its own luxury division, Lexus, from scratch, in order to learn and understand for itself the essence of a luxury car (in the genchi genbutsu spirit).

Like the small farmers of old who had to build their own houses, repair their own equipment, and creatively solve all their own problems, Toyota Motor Company started small with few resources. Everyone had to chip in on every activity and do what was necessary to engineer and build a car. In fact, in the 1930s the president of Toyoda Automatic Loom, Kodama Risaburo, thought the automotive business was risky and was reluctant to invest all but minimal capital in the new venture (Cusumano, 1985). So the Toyota automobile company had to learn to make everything for itself.

While many companies can claim to value self-reliance, Toyota actually lives this philosophy on a corporate institutional level. Toyota Motor Company founder, Kiichiro Toyoda, said:

My father was not educated. The only strength he had was to believe in one thing all the way: that the Japanese have latent capabilities. The automatic loom was the product of this conviction.

Kiichiro, son of Sakichi and the first president of Toyota Motor Company, carried on the tradition of his father’s self-reliant philosophy. In the 1920s he was an engineering student, but not just an engineering student going to class and passing tests. Like his father, he actually invented things, and by 1926-1928 he was inventing processes to build a car. Jim Press, a Toyota history buff, explains how this “do-it-yourself” philosophy played out in the new car company led by Kiichiro:

Toyota’s orientation from the very beginning was anybody could go hire a mechanic and hire an engineer and hire this and buy that. Toyota’s view was that before they could build a car, they needed to perfect new revolutionary processes to build a mold, to build an engine, to go back to that level. And that’s what makes the company different. Going back to the essence.

Later, when other Japanese automakers were willing to buy kits from U.S. carmakers and assemble knockoffs of their vehicles, Toyota chose to design and build its own cars, drawing on pieces of designs from a variety of U.S. vehicles. In fact, Toyota was the first automobile company in Japan to develop vehicles without technical assistance agreements with the more advanced automobile companies in Europe and the U.S. It didn’t want to be dependent on outside assistance.

In both a physical and psychological sense, Toyota is somewhat isolated from the rest of Japan. Toyota City is almost in the middle of nowhere. To get there requires going to Nagoya, a major though not central city in Japan. Then a long train ride and finally a taxi will get you to Toyota headquarters. Even now, with Toyota and its suppliers populating the landscape, there is a rural flavor. And Toyota executives proudly proclaim themselves unsophisticated country bumpkins. Mikio Kitano, formerly President of Toyota Motor Manufacturing Kentucky and a director of the company at the time I visited his office, had a huge stuffed animal gorilla in his office. He described himself to me as an ape—not like the sophisticates of Tokyo.

At Toyota the companion to self-reliance is responsibility for its own successes and failures. In Toyota Way 2001 it states: “We strive to decide our own fate. We act with self-reliance, trusting in our own abilities. We accept responsibility for our conduct and for maintaining and improving the skills that enable us to produce added value.”