Toyota's management team is making changes to its lineup. Effective April 1, President Koji Sato will move into the position of vice chairman and the newly established role of chief industry officer, with Operating Officer Kenta Kon taking over as the incoming president.
[Questions from reporters]
What is being passed on to incoming President Kon?
――What challenges do you perceive in relation to the break-even volume? How will you resolve them?
Incoming President Kon
In terms of challenges, today we announced our latest results, which showed that our break-even volume has risen slightly over the past year or two. Of course, there are various external factors, as well as problems with inflation, but do we really have the foundation to ensure a firm footing regardless of how tough the environment becomes? That is the issue for us.
I think there are many factors, but as Mr. Sato mentioned, our operations revolve around functions. I feel we may have focused a bit too much on what’s good for individual functions, at the expense of overall cohesiveness.
In this regard, we will continue to strengthen cross-functional coordination. Everyone now recognizes this is necessary. Following on from the first-half results, the fact that Mr. Sato has clearly indicated an intentional pause has made everyone aware. I want to ensure these efforts are carried out across the company.
――What have you accomplished during this three-year term, and what is left unfinished that you would like to pass on to incoming President Kon?
President Sato
On a personal level, I don’t think there’s anything I need to do.
As I mentioned earlier, this is about “we” rather than “me.” In pursuit of becoming a mobility company, we started out without any sight of a concrete path forward. Despite stating our goal, I feel that our leadership team began without a clear vision for what we would actually do.
The past three years have been about taking action—not just me personally, but continued action by everyone, which has resulted in the specifics gradually becoming clear. When we can see something concrete, we can surely identify the challenges; solving and eliminating these challenges reveals what lies further ahead. By entering this cycle, I think we have generated the initial momentum towards becoming a mobility company.
As for my request to Mr. Kon, it is to continue making ever-better cars. I hope the entire company will take these words seriously and put them into practice.
We are carmakers, which means the heart of our business lies in offering attractive products that captivate customers. The fact that no small number of customers choose Toyota cars and remain loyal to us today is the fruit of past efforts. It’s not about the last year or two.
The lead time for automobiles is such that the cars currently out in the world, for example, were already being prepared about a decade ago, when I was working in development. Now those efforts are finally coming to fruition. So, if we want to be competitive in ten years’ time, right now our job is to plant the seeds for what will be seen as great cars in a decade from now.
I believe that continuing to pursue ever-better carmaking is the most important part of Toyota, and while I’m sure that Mr. Kon shares this mindset without me saying anything, I hope he continues this pursuit.
――President Sato adopted the themes of “Inheritance & Evolution” and management as a team. What will form the core of incoming President Kon’s management policy?
Incoming President Kon
You mentioned management as a team, and I certainly have no intention of changing that approach.
At Toyota, we have our executive team, chief officers, the president, and, of course, many people working in the genba. Our approach to management is not about having one superhero, but everyone working together to make things better, to make Japan better, and that remains unchanged.
Part of this, as Mr. Sato just noted, is making ever-better cars. That too is our unchanging mission, one that every person at Toyota is engaged in.
How can we all continue to build ever-better cars, and beyond that, how do we become a mobility company and offer new forms of mobility to our customers and society?
I believe Toyota’s team-based management is about continuing to consider these questions together, and all of us doing what we can, as individuals and collectively. I will remain committed to this approach.
――Chairman Toyoda has expressed his desire for you to carry on the essence of Toyota. How do each of you interpret this message, both reflecting on the past and in your efforts moving forward?
President Sato
If I may respond honestly without pretending that I know, the correct answer is to keep asking yourself this question.
What exactly makes us Toyota? I myself can't say I have a definitive answer. But as an example, I believe it’s incredibly important that we strive to be a company of people working for someone other than ourselves, and for the smiles on our customers’ faces.
At Toyota we have what is known as the Toyoda Principles, the first of which states: “Always be faithful to your duties, thereby contributing to the Company and to the overall good.” This last part means that only by taking action and contributing to society do we imbue the value of our work with meaning.
I think Chairman Toyoda is telling us to reflect upon this idea with respect to what we are doing now. When we pour our energies into something, we inevitably begin to focus on “me” and place ourselves at the center of the narrative, right? In my day-to-day work, I’ve tried to take this as a warning sign that our perspective has narrowed, and we are straying from what Toyota is meant to be doing.
Incoming President Kon
Echoing what Mr. Sato said, I too don’t have a firm answer but given that Toyota’s looms were born out of a desire to help others, I believe one key aspect is whether we are able to put this founding spirit into practice.
Another, which also came up earlier, is the chairman’s choice of the word “ba,” which I also interpret as being part of what makes us Toyota.
Whether it’s the production floor or the sales floor, there are certainly places that we see as important. We don’t want to make decisions or set priorities outside of those ba. I believe the Toyota way is to carefully observe what happens in these ba and turn that into action.
In being appointed president, I feel that I have been granted one such ba, and I must create similar spaces for other members, while also going to those that already exist.
――Will there be changes in the priorities of top management?
Incoming President Kon
Making ever-better cars, contributing to society, producing happiness for all—these core ideas that drive Toyota will remain constant, even though our team formation may change. Indeed, I believe the new structure will enable us to pursue these goals even more vigorously.
Earlier, when I said that I am focused on money and numbers, that is about ensuring Toyota can continue moving toward its goals and vision. It’s certainly not about evaluating things based solely on money or financial figures. They will serve as investments for future stakeholders. I want to treat money as something with warmth, with a human element.
President Sato
If I may add a brief comment, personally I think there will be an even greater focus on “Fun to Drive.”
For instance, I think many other engineers and I myself have this notion that Fun to Drive is just a matter of engineering. But as Mr. Kon has said, “Fun to Drive, and ever-better carmaking, involves every person at Toyota.” I think that is a very profound statement.
With Mr. Kon taking the lead, more of the people involved in ever-better carmaking in various ways will no doubt take notice. I am sure Mr. Kon will emphasize that every role—accounting or HR, for example—is definitely connected to making ever-better cars, and this spark will make more people eager to get on board.
Personally, I feel like that side of things will get more of a boost.