On July 28, TRI-AD announced that it would undergo an expansion and reorganization. The change was announced as part of the company’s efforts to grow and improve its operations by forming a holding company and two operating companies, and the companies will have new names.
To announce these changes, TRI-AD held an all-staff meeting to inform them of the change. Toyota Motor Corp. President Akio Toyoda, though not having any specific title or responsibility at TRI-AD, also joined the meeting, actively participating as he shared his passion about the company in his own words.
In the second article, the focus is on Akio’s comments made at the meeting and how they represent his commitment to ensuring Toyota’s continued success moving into the future.
In this article, the focus will be primarily on Akio’s remarks from the internal announcement meeting. So, to start things off, please watch his opening remarks (excerpts included in-line below):
Akio Toyoda Speech at TRI-AD on new "Woven" companies on July 28, 2020
Akio remarks (excerpts)
You are the ones… who will give the world a better future.
Through all that you imagine, invent, and create, you will be the ones to help others...live their lives...to the fullest.
It’s why we have created this group of companies we call the Woven Planet.
My great grandfather invented the automatic loom because he wanted to do something to help his mother and to help others.
He wanted to make the process of weaving fabric easier.
And he and the company he founded became very successful.
When his son, my grandfather, Kiichiro became a young man...he too, wanted to make an impact on society...but he wasn’t content just to keep making better looms.
Like any ambitious young man, he wanted to do something completely different...he wanted to build cars.
To him...automobiles were the future...they were a way to make people’s lives dramatically better.
But when he started what we now know as Toyota...people thought he would never succeed.
And I can tell you, people have thought the same thing about me more than once!
Back then, Kiichiro had to beg the banks for the money...and he invested everything he had personally into Toyota.
He faced many challenges and difficulties along the way. As did Toyota.
And unfortunately, my grandfather never got to see his vision fully realized...
But if he were here today, I think he would be pleased with what Toyota became...and with what Toyota has been able to contribute to society.
But I also think he would be asking what more we can do.
I think the opportunity to reinvent the way people live, work and play from the ground up...would have made him very excited to say the least.
It would have appealed to the entrepreneur in him as it certainly does to me.
And so, I too, am personally investing a significant amount of my own money in this company...because that’s how much I believe in what we’re doing here...and what we can accomplish together.
I want the values we honor at Toyota...integrity, respect and compassion for others, to live at the heart of this new company.
But I also want us to find our own path, our own way of making a difference.
In fact, I no longer want to think of ourselves as a mass producer of cars...but a mass producer of happiness.
All of you here today stand among the best and the brightest.
I believe we can do great things. I believe we can change the world. You will be the ones to make my dream a reality.
And I, for one, cannot wait!
2. Why has Akio Toyoda made the decision to invest on his own in this new company?
In his remarks, most were taken by surprise as Akio revealed that he “too, [will be] personally investing a significant amount of [his] own money in this company.”
TRI-AD is a company already funded by Toyota Motor Corporation, but, with this announcement, Akio told the group present that he will invest as an individual, an investment that is separate from the money already funded by Toyota Motor Corporation. But he didn’t just say that, he said he would invest “a significant amount of [his] own money.”
This stoked curiosity among those present, and after the remarks, there was a Q&A session held with the team members. The first question asked showed that the team members had picked up on this comment from Akio:
I am pretty sure I am not the only one surprised by today’s announcement. But I think the most surprising part was that you said you would invest in our company with your own personal money. What is the significance behind you investing as Akio Toyoda as opposed to Toyota Motor Corporation?
It is because there are no answers to a new future.
Within a company, you have organizations where you make decisions based on a logical discussion of “investing this much to gain a such and such level of return.” However, in this uncharted era, not everything can be considered using such logical mechanisms.
I have been president of Toyota Motor Corporation for 11 years now, but it has been a struggle with such a large organization. In large organizations, they try to do things logically based on their experiences with success in the past. But I do things differently, instead imagining a kind of world “where we can earn smiles on more people’s faces.”
Toyota once experienced a full model change of its business from being an auto loom manufacturer to becoming an automobile manufacturer. Now is the time for our next model change. Facing such a time, rather than relying only upon my thoughts as a president of a company, I felt it necessary to include my own thoughts and passions as an individual imagining the type of world that would be interesting and that would bring smiles to people’s faces in the future. That is why I decided to make an investment as an individual.
I am the third generation from Kiichiro, and under the [estate or inheritance] tax system in Japan, the financial assets inherited from what is considered the first generation are significantly reduced. Kiichiro dared to take advantage of what he inherited from his father, Sakichi, to establish Toyota Motor Corporation.
As the third generation, I asked myself if I should just enjoy my life now because I can rely on the value of the current Toyota. And the answer to myself was “no.” I thought that I should utilize my family assets to invest in the future. In other words, I felt I should endeavor to do a full model change of my assets to show my personal commitment in the future.
I realized that part of my role is to inherit what was inherited by my father and grandfather, the role to make efforts to fully change Toyota’s business, something done in each generation. And with that in mind, I did not think I could show my commitment by only using my title as president of Toyota.
When 15 million horses were being replaced by automobiles in the United States of America, Kiichiro Toyoda devoted himself to changing the business model established by his father, an automated loom manufacturer, to become an automobile manufacturer. At that time, despite receiving criticism that it would never succeed, he completed his mission with a small number of like-minded colleagues and with his own private funds.
In this so-called once-in-a-century period of profound transformation, the value of automobiles itself is about to drastically change. That is why Akio, as a successor in the founding family, thinks he cannot pass the baton on to the next generation with the company remaining the same as it is now.
To achieve the full model change of Toyota that is required in this era, Akio is taking on and sharing in the risk by investing assets he inherited as a member of the founding family. Displaying his strong commitment, he is leading all of Toyota onto a path he believes in, a path where if the world he imagines could be brought to life and earn even more smiles from even more people.
The new Woven companies that will be restarting their journey with this organization announcement are expected to play a role in the promotion of Toyota’s full model change while involving the large parent company, Toyota Motor Corporation. That is why Akio decided to become a shareholder in the Woven company, and that is why he proceeded to share and lead with such strong commitment with the other like-minded members.
3. One more reason to invest as an individual
However, there was more to the response from Akio to that first question:
Previously in Japan, there were [individual] capitalists. However, nowadays, when we take a look at the shareholder structure of most listed companies, the situation is different.
Capitalists in the past would have his or her own passion when investing their own money, and they succeeded in helping to establish new companies that had some sort of mission. Now, in many companies, there are less “founding capitalists.” As a result, it seems to me that the passion that such capitalists had when founding the companies has been diluted, and a company’s personality or commitment has become less and less visible now.
I feel that as we take on challenges in this uncharted era, it may be necessary to have a commitment from individuals.
At TRI-AD, some team members joined the company in Japan after having worked in Silicon Valley. One such member is their CEO, Dr. James Kuffner. In Silicon Valley, it may be that individual capitalists are taken as a given.
However, this is not the case in Japan, where there are less and less of those individual capitalists now. Akio’s response shows the concerns that some have about the situation in Japan, and why it is difficult to find businesses that have missions, as it has been diluted. Seeing an opportunity to make a difference on his own, Akio made a commitment to invest.
While not covered in depth in this article, there were other questions at the Q&A session. One team member even asked if it would be possible for them to also invest in the company with their own money. The mere fact that they asked this showed that they understood the message Akio had shared with them, as well as their desire to join with Akio to help try and create the future together.
4. Woven Planet 10 years from now
In an interview held after the internal meeting and Q&A session, Akio was to provide his thoughts/projections of the newly announced Woven companies 10 years from now. His reply was:
Akio Ten years from now...one thing I know for sure is that I will be 74 years old then. We do not know what it will be like except that. Certainly, the landscape in ten years will be different thanks to what we choose to do now. While our ages continue to increase annually, the future will change depending on our decisions and actions today. We will do our best to become a company that “mass-produces” happiness for even more people. I humbly request your kind, warm, and fair support going forward.
5. Editorial Postscript | Keyword: Sustainability
It is apparent from the decisions he makes and the actions he takes that one of Akio's keywords is "Sustainability". At the time of the Great Eastern Japan Earthquake in 2011, the action that Akio took was to build a plant in Tohoku. In actuality, the roots of monozukuri (making things) have been planted in Tohoku, resulting in continuous, sustainable recovery support and the emergence of new employment and taxes for the area.
The same keyword appears to also be applied in Akio's actions at this time as well.
In the midst of the COVID-19 pandemic, there might be some who would say that it might be better for Akio to donate that money somewhere. However, Akio does not look at things from a temporary fix/support perspective; he is more interested in long-term investments into the future with his assets.
On that point, Akio has said that "the future ten years from now will change depending on our decisions today."
Whether it is ten years from now or even decades, it is clear that Akio believes that a day will come when people will think back like others do today and think that the investment that he made at that time, the way he used that money, was the right choice.