At Toyota’s 116th Ordinary General Shareholders’ Meeting held last week, the Q&A session with shareholders continued for about an hour. To cover the Q&A’s, Toyota Times will divide the content up and publish them across four articles. The first, this article below, covers a question where a shareholder asked Akio about what his most challenging hardship has been so far.
After hearing about all the hardships you have faced since becoming president 11 years ago, I have just realized again that you have been managing the company through difficult and trying times.
Add to that the impact of COVID-19 leading to an 80 percent decrease in operating income, and I believe the company must now confront a truly perilous crisis.Against such a backdrop, I am grateful that I can still feel secure being a Toyota shareholder, which is something that I have felt without even knowing the extent of the hardships that you have faced. If possible, I would like to ask you what the most difficult hardship was that you have faced over these past 11 years.
The question itself was about Akio himself, but he deferred to Operating Officer Kobayashi, saying that he would like Kobayashi to answer as someone who has been an observer of his for a long time.
I know you asked me what was the most difficult challenge, but, it has been challenging the whole time. There really hasn’t been a single year that was peaceful and uneventful.
Therefore, for me, experiencing hardships has been the norm, and, even if our shareholders understand that, as I am always making an effort to put on a smiling face, I honestly think that it is usually the case that my hardships aren’t seen by others.
But I would now like to ask Mr. Kobayashi, who is in a position we call “Banto” (a watchdog executive) of Toyota and who has observed me for a long time, to answer from a more objective perspective.
Kobayashi’s title until this March was “representative director and executive vice president”, but now, what’s on his Japanese business card is different. Neither of the titles representative director nor chief risk officer are there; instead there’s only “Banto”. Banto is a description of a person placed in charge of employed clerks (except for a founding family member) that was mostly used in pre-modern Japan society. Akio told Kobayashi that his role fits the most with the name, and he changed his business card to reflect the role from this April.
Kobayashi has worked with Akio for more than 30 years. He is eight years older than Akio, and used to be his supervisor when Akio was younger. As per the chairman’s request, Kobayashi started to share his insight about Akio.
I have been working closely with President Toyoda for more than 30 years, from not long after he joined the company until now. Around the time that he joined the company, I was his “devil” boss. He worked like mad, I reprimanded him at times, and we discussed things along the way.
Thinking back, I would say that President Toyoda wanted to learn about (Toyota) work quickly and wanted to become a full-fledged Toyota person as soon as possible, because he had been a knight-errant (so to speak) working for a non-Japanese company, and he later joined Toyota in the middle of his career. As such, we worked together on weekdays until 3 a.m. or 4 a.m., and on weekends, too.
There is another thing, although it’s one that he doesn’t talk about much. But, if I am to provide full disclosure, I will add that, even after getting married, he has mostly lived alone away from home. At our company, such is unprecedented. Married employees always live with their spouses together somewhere and only live away from home from time to time.
And I have watched President Toyoda for a long time.
Thanks to all of you, Toyota has become a major corporation. But, rather than being the president of a major corporation, I feel that President Toyoda has the mind of an entrepreneur of a venture business. As you know, venture companies are those that are formed with its members sharing the same sense of values and the same aspirations and with everyone working together. Thanks to all of you, Toyota, including the Toyota Group, has been able to come this far. We have been able to grow to become a major corporation in the world, with operations on a large scale. However, when talking about the state of our cultivation of human resources, I think things have fallen behind. I feel a sense of unfulfilled obligation to my predecessors.
In other words, I think we might be lacking part of the strict development that enables people to bear the burden of the next generation. Even so, I think we have been unaware of the problem, including even among us (sitting here). Also, companies with success stories are not fond of change. There are many negative influences, such as a sense of being elite due to being well-versed in what we’re doing. That also goes for our executives, including the operating officers sitting here and most of our mid-level employees as well.
I feel that Akio Toyoda the entrepreneur is constantly fighting against “big Japan corporation Toyota”. I think that’s what President Toyoda just said in a much simpler way. He’s all alone. We are facing a crisis that comes but once a century. We can’t read what lies ahead. For President Toyoda, who is trying to change the future, it’s like being hobbled.
As I have been watching closely with him, there are people who don’t even bother to try to understand the thinking of President Toyoda. Furthermore, there are people who are resisting attempts to try to change the way they are doing things. He has held discussions with such people, he has had meetings with them, and, at times, he has even become impatient with them and walked out on meetings that were only halfway through.And, as for my thinking…
At this point, Kobayashi found himself at a loss for words. He said “excuse me,” then he remained silent for a few seconds.
When he continued, he said in a tearful voice, “It is somewhat difficult for people to understand it. I’m getting a bit emotional now.”
“At any rate, watching such things, I think that has been the hardest thing that President Toyoda has had to face.”
In Kobayashi’s eyes, the most challenging hardship Akio faced was “a fight against big Japan corporation Toyota.”
But, as came up during our financial results briefing, President Toyoda has spoken about passing on the baton. In that sense, I don’t think he will give up. I think he will continue to fight while continuing to advocate for Toyota’s transformation, along with its partners, into a company that is useful to the world—a mobility company.
Although I never met the original founder, the person who established Toyota was Kiichiro Toyoda. He was President Toyoda’s grandfather, and I feel that President Toyoda somehow has the same tenacity and conviction as Kiichiro Toyoda did. I guess it’s in his DNA. I read about that in a book once, and something tells me that’s the way it is.
As you know, companies are built on people. They say in the Japanese ancient history that people are as important as stone walls and castles to win a battle. When it comes to the cultivation of human resources that I mentioned a moment ago, we’re only partway there.
But perhaps President Toyoda, will not give up. Such is his sense of values, and I think that there will be more people in the company who will come to understand the president. Already now there are some coming to understand, bit by bit. To a certain extent, I believe their emergence has led to our recent financial results.
What I want to tell all of our shareholders is: “Please don’t be worried.”
At any rate, I believe that, as we all unite and move toward our next passing on of the baton, Toyota, as it is today, will somehow completely redesign itself, and, once being able to do so, will become a company that takes the next step and moves forward. Until then, I encourage you to continue ownership of our stock, and I humbly ask for your support.
Following Kobayashi’s comment that he thinks President Toyoda will not give up, Akio added his thoughts:
There have been several times when I wanted to give up. This is the 11th time for me to be given the position of chairperson of this meeting. The first time came soon after the U.S. Congressional hearings, at which stage I had thought that I would not even last a year as president. Then, when I noticed, this is now the 11th time.
Even if there were times when I might have wanted to give up, I think I have been able to continue, as I have been doing, probably because, as I just heard from Mr. Kobayashi, I, myself, wanted to experience this kind of passing on of the baton. I will commit myself to making Toyota into a company that can conduct such a passing on of the baton when it’s time to move on to the next generation.
For this, I humbly seek the support of all of our shareholders.
When Akio finished his comments, there was a round of applause from the shareholders, and the shareholder who asked the question spoke out loud:
I think that there are many people behind you throughout the world.
Please do your best.”
Akio thanked him for the comment, and continued his role as chairman.Please stay tuned as Toyota Times will continue sharing more of the content from the Q&A session of the 116th Ordinary General Shareholders’ Meeting in the next story entitled “Akio Illustrates Point with Elderly Couple and Donkey Story.”