Chapter 82 - Courage and Change: the Life of Kiichiro Toyoda
Today’s Chapter is based on the book “Courage and Change: the Life of Kiichiro Toyoda” by Kazuo Wada. It is the first compiled biography on the life of Kiichiro Toyoda, the founder of Toyoda Motor Corporation.
Here’s what I have learned:
Practical Innovation
"To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions."
— Steve Jobs
The story of Kiichiro Toyoda, the founder of Toyota is a testament to the power of innovation and practicality in business. Toyoda’s father, Sakichi was an innovator himself and his approach to invention and manufacturing was grounded in real-world applications and continuous improvement. This principle was later implemented into Kiichiro Toyoda’s philosophy.
Sakichi Toyoda, despite his lack of formal education was a prolific inventor who understood the importance of creating practical solutions. Furthermore, he was committed into refining his inventions until they truly met the needs of their intended users. He wasn’t content with simply creating something new, he wanted to ensure it was genuinely useful and effective.
For example, when he first invented the power loom, he “felt that the power loom he had invented was aimed too much at the small weaving shops of people working in the cottage industry system and that it was a product that needed further improvement. He insisted that for the time being some restriction on orders was more desirable.”
This practical approach to innovation of Kiichiro Toyoda was certainly inherited from his father. Kiichiro, rather than focusing on the theoretical aspects of production, was more observant of practical details in the assembly process and consistently looking for ways to increase efficiency. It is clear that it is with this mindset he learned from his father that Kiichiro lead to innovations in production methods that would revolutionize the automobile industry once he founded Toyota.
The Toyoda’s family’s commitment to innovation and practicality is perhaps best summed up in Sakichi’s “Five Main Principles of Toyoda”:
“Always be faithful to your duties, thereby contributing to the Company and to the overall good.
Always be studious and creative, striving to stay ahead of the times.
Always be practical and avoid frivolousness.
Always strive to build a homelike atmosphere at work that is warm and friendly.
Always have respect for God, and remember to be grateful at all times.”
— Sakichi Toyoda
This concept of practical innovation reminds me of what we have learned from Akio Morita, the founder of Sony. Morita’s approach at Sony is similar to Kiichiro’s approach to Toyota as in both wanted their businesses to serve their customers in a practical way.
As a matter of fact, Morita’s plan at Sony was to lead the public with new products rather than to ask the public what kind of products they want. The reasoning behind this is that they believed that the public doesn’t know what is possible, but they do. However, Morita quickly realized that they needed to create a market through education in order for Sony to be successful. When they first started producing tape recorders, they realized that their products couldn’t sell because people did not know what it was and how it could be of use for them. As such, they learned quickly that they needed to educate the market; they needed to sell their products to the potential buyer by explaining to him the value they were getting. If Sony wanted to remain in business, Morita realized that their innovations had to be practical to the users.
“I then realized that having unique technology and being able to make unique products are not enough to keep a business going. You have to sell the products, and to do that you have to show the potential buyer the real value of what you are selling.”
— Akio Morita
Practical Education
“I have never let my schooling interfere with my education.”
— Mark Twain
As we have previously learned from Edwin Land, formal education is not a necessity in order to succeed. As a matter of fact, Land was a prominent believer of having “an education without a degree”. While he was accepted to Harvard, Land preferred learning through books rather than through the normal education system. In fact, he first took a leave of absence from Harvard to learn about polarization which he did by reading all books on polarization at the New York Public Library.
Land left Harvard a second time in order to create his own laboratory with George Wheelwright. Land realised that opening his own laboratory to make his own experiments would be more educational than continuing with his degree. This desire to learn through reading continued for the rest of his life.
Similarly, we have also learned, based on Henry Ford’s autobiography, that one’s knowledge should not be judged by their formal education. As he once said, “An educated man is not one whose memory is trained to carry a few dates in history—he is one who can accomplish things. A man who cannot think is not an educated man however many college degrees he may have acquired.”
“But the best that education can do for a man is to put him in possession of his powers, give him control of the tools with which destiny has endowed him, and teach him how to think.”
— Henry Ford
Furthermore, Ford believed that one’s education starts after graduation, as the main goal of education “is to teach him how to use his mind in thinking.” As such, when he was running the Ford Motor Company, Ford never hired any experts or men with past experiences. His reasoning was that “A man who knows a job sees so much more to be done than he has done, that he is always pressing forward and never gives up an instant of thought to how good and how efficient he is. Thinking always ahead, thinking always of trying to do more, brings a state of mind in which nothing is impossible. The moment one gets into the "expert" state of mind a great number of things become impossible.”
In the case of the Toyoda family, it is clear that their success is also rooted in their unwavering commitment to practical learning. In fact, Sakichi Toyoda was a self-taught inventor who lacked formal education. He was also not keen on his son Kiichiro to pursue education beyond secondary level as he "did not think there was much to be gained by upper-level secondary education". He believed that his son Kiichiro could gain much more necessary knowledge and experience simply by working under his guidance.
Similarly Kiichiro’s approach to formal education was rather interesting. He was much more interested into subjects that would be useful for him in the future when he would take up the management of his father’s business. As Kazuo Wada wrote, “In the courses dealing with his specialty he would have been interested in more than getting good grades or gaining the credits; he would have had in mind using them, or at least referring back to them, in the future, especially when he would take up the management of a business. He was so careful about making a complete set of notes that he often stayed up late into the night making clean copies of what he had taken down during the day.”
As such, Kiichiro’s passion for education was strictly focused on subjects with practical applications such as mathematics, physics and chemistry. His passion to learning engineering was also remarkable. In fact, Kiichiro learned English with the sole purpose of learning more about engineering. As Wada wrote, “Kiichiro was keen on studying English, and his skill in the language improved a great deal. Still, his attitude towards language study was that it was a practical tool for learning engineering, and he was not very interested in it for literary cultivation or conversational use."
Leadership
“I want you to have an ability to pick and lead people in such a way that they will do things they did not think they could do. This is the quality of a great business leader.”
— Georges Doriot
Kiichiro Toyoda’s leadership qualities and vision were instrumental in transforming his innovative ideas into a successful enterprise. He was a leader who could inspire and motivate his team, even in the face of uncertainty and challenges. His strong self-confidence and enthusiasm were key elements of his persuasive abilities. Hanji Umehara aptly described Kiichiro's leadership style: "He was a master of persuasion because of his strong self-confidence and great enthusiasm."
One of the hallmark traits of Kiichiro's leadership was his ability to make people feel important and valued. He had a unique way of connecting with his employees, making them believe in the vision and the mission of the company. For instance, Chuichi Kamiya recalled an incident where Kiichiro showed deep concern for his well-being and told him that "A sickness has to be put down while it's just smoldering. Don't come in until it's completely cured." This compassionate approach created a loyal and motivated workforce, dedicated to achieving the company's goals.
Another reason for Kiichiro Toyoda’s exceptional leadership was his ability to navigate obstacles due to his resilience and ingenuity. This is especially true when he started his journey to establish an automobile business without any experience in making cars. In fact, one of the significant challenges was the lack of practical experience in automobile manufacturing. Kiichiro had to recruit people with actual experience in the production of automobiles in Japan, recognizing that his expertise in textile machinery was not sufficient for this new venture.
The technical challenges were also daunting. Kazuo Wada explained that "the inability of his workers to come up with an engine that could produce sufficient horsepower was a serious problem because making an engine was the first step towards being able to move into the automobile industry." Despite these setbacks, Kiichiro and his team persevered, utilizing overseas technical journals to find solutions and improve their designs.
Another significant challenge was the quality of locally produced parts, which were often inferior to their foreign counterparts. Kiichiro realized that to ensure the quality and reliability of their vehicles, Toyota would need to produce most of the parts in-house. This decision to internalize production processes was a bold move that required substantial investment and effort but ultimately laid the groundwork for Toyota's reputation for quality and reliability.
As a matter of fact, commitment to quality and continuous improvement was a cornerstone of Kiichiro Toyoda’s business philosophy. He believed that producing high-quality products was not just a business imperative but also a moral duty. This dedication to quality is evident in his meticulous approach to production processes and materials.
One of the key principles Kiichiro implemented was the "just in time" manufacturing principle. This approach emphasized the importance of efficiency and minimizing waste. Here’s how he explains it in his own words:
“I believe this is the first principle in improving efficiency. If parts X are made too quickly and are piled up in excessive numbers, then parts Y will lag behind and be ready in too few numbers. Even down to a single nut and bolt, everything has to "be there just at the right time"-this has to be the greatest concern as far as making connections goes.”
— Kiichiro Toyoda
Kiichiro's commitment to quality extended to every aspect of the business. He personally wrote and revised guidebooks and rulebooks for every position in the company, ensuring that every employee understood the importance of their role and the standards they needed to uphold. This hands-on approach to management and quality control created a culture of excellence within the company.
Kiichiro’s ability to navigate obstacles through innovation as a leader reminds me of the power of paranoia from Andy Grove at Intel. This is especially true considering how Kiichiro decided to go from the automatic loom business to the automobile industry. In fact, Kiichiro felt that even though Toyoda Automatic Loom Works was one step ahead of other companies, he knew that he was living in a fiercely competitive situation in which, no matter what he produced, similar items would soon appear on the market. As such, once Toyoda was able to make car engines at a low cost, he was determined to move ahead into the automobile business where competitors would have a harder time to compete with him.
As we have previously learned, at the heart of Grove's philosophy is the idea that healthy paranoia is an essential quality for business success. This notion may sound extreme, but Grove's logic is hard to refute. In fast-moving, hyper competitive markets, complacency is the main reason for the downfall for even the largest companies.
"I believe in the value of paranoia. Business success contains the seeds of its own destruction."
— Andy Grove
This risk comes from the fact that when companies are doing well, the leadership teams can become complacent as they fail to recognize the warning signs that the industry is slowly changing beneath their feet. Grove saw this dynamic play out time and again, as once-dominant players in the tech sector found their fortunes suddenly in free fall.
Grove illustrates this point by recounting the experiences of his own company, Intel, as it navigated a strategic inflection point in the computer industry, where there are often changes to the rules of the game. He observes that "sometimes these rules change—often in very significant ways. Yet there is no flashing sign that heralds these rule changes. They creep up on you as they crept up on us, without warning."
If Kiichiro did not have this leadership quality of understanding the constant need to adapt to business conditions, perhaps Toyota of today wouldn’t have existed. Kiichiro’s story at Toyota is a perfect example of how only the paranoid survives.
Beyond the Book
Read "Henry Ford and the Actual Value of Education" by Farnam Street
Read "Andy Grove and the Value of Facing Reality" by Farnam Street
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