Toyota's Leadership And Employee Development Lessons For Business Leaders In 2024

A transformative three-step guide

Leadership extends beyond personal influence—it's about cultivating future leaders who can drive societal progress. We hold the responsibility of shaping these leaders, influencing their capacity to navigate the actions and impact of current leaders. How we educate and train them determines their effectiveness, ultimately shaping the course of societal advancement.
 

Consider Toyota, a global automotive giant overcoming business challenges through effective leadership development. Their three-step approach could serve as a valuable guide for future leaders.

STEP ONE: Wisdom

By using wisdom, future leaders learn the personality traits and leadership behaviors of current leaders by participating in leadership meetings and mentorship. Management and leadership programs come with overseas training and development coupled with leadership development. While working as an executive at the Industrial Bank of Japan, we noticed that many American leaders ascended to prominent positions. However, their influence did not match that of Japanese leaders sent from Japan. The Japanese leadership maintains stringent control over cultural management and leadership development, safeguarding against any dilution of the organizational culture by American leadership styles. Future leaders, while adapting locally, maintain a global perspective, guided by mentorship from current leaders and continuous supervision from senior leaders in Japan. The transfer of knowledge and experience from current to future leaders plays a pivotal role in shaping their learning and development journey.

STEP TWO: Communication

In the second step, participants in Toyota's leadership development program delve into advanced leadership skill development. Building on the experience gained from attending meetings and regular communication with current leaders—predominantly American at junior and senior levels, with all Japanese leaders positioned at the top senior levels—Japanese leaders actively cultivate the next generation of leaders. This step necessitates in-depth and constructive discussions between current and future leaders. Engaging in dialogues that express interpersonal relationships, coupled with the mentorship experiences of current leaders, plays a crucial role in facilitating this vital second step of leadership development.

STEP THREE: Constant Change

Former U.S. President John F. Kennedy once received valuable advice from his father: "If it is not necessary to change, then change is not necessary." This counsel proved instrumental for President Kennedy, guiding him in navigating challenges like the Bay of Pigs by avoiding groupthink. In this third step, change becomes imperative. Conditions must be established for a commitment to continuous and, when necessary, permanent change. Consistent attention to the challenges faced by future leaders, coupled with the collaboration of current leaders and organizational psychologists from the human resource development department, ensures a sustained and necessary evolution for survival. For example, the Japanese organization, Toyota, has a strong human resources development department which plays an important role in this third step of manifesting ongoing change.

Communication between current and future leaders gradually decreases in the leadership development process as aspiring leaders acquire the knowledge not only to ascend to executive roles but also to assist other junior leaders in developing the three essential leadership skills.

In Japan, psychologists become responsible for ongoing communication with future leaders. These psychologists must constantly monitor future leaders and help them solve individual challenges that are inherent in the required change. This is shown to be a true measure of stress reduction coupled with high-level leadership development.

Therefore, this leadership development approach, grounded in the principles of wisdom, communication, and commitment to change, accelerates the cultivation of leadership skills among future leaders. It empowers them to discern a range of competencies essential for effective leadership. Encouraging future leaders to articulate characteristics and behaviors inconsistent with Toyota's leadership approach has fostered a culture of truth-telling, now integral to the organizational culture. This leadership development approach also cultivates a systemic perspective among future leaders. Continuous communication between human resource development psychologists and these emerging leaders ensures alignment with Toyota’s corporate culture.

Beyond helping future leaders in overcoming the challenge of change and strengthening their commitment to change, this approach contributes to enhancing their life skills. An illustrative example stems from our experience providing management consulting services to a Toyota branch in Sydney, Australia. Here, this development approach played a role in assisting an employee in resolving marital issues. Additionally, in New York City, our leadership development and training, incorporating a goal-setting system admired and implemented by Japanese leaders, successfully facilitated cross-training of staff. This, in turn, allowed leaders more time to focus on crucial issues they encountered.

Toyota, a powerful think tank, is one of the best and most valuable companies in the world. And its organizational culture is one of the best. The efficacy of their leadership development approach lies in nurturing leaders with a transformative mindset and a steadfast commitment to change. By maintaining all Japanese executives at the upper echelons and appointing local leaders from lower-level managers for each department, Toyota fosters a leadership development strategy that cultivates profound self-awareness among future leaders.

While respecting everyone, their leadership approach internalizes change and continuous improvement. Kevin Roberts, the CEO of Saatchi, and Saatchi once noted Toyota’s greatness. “Mega global client in Toyota. Car guys always ask each other “How much metal did you move?” Toyota fell in love with Lovemarks when we asked them “How much does the metal move you?” President Fujio Cho set Toyota Managers a new goal: “To capture the hearts of customers at all times.”

Author Bios

Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. In recognition of his work with the Australian Institute of Management and Australian Human Resources Institute, Mostafa has been awarded the titles, “Associate Fellow of the Australian Institute of Management” and “Senior Professional in Human Resources.”

Michael J. Provitera is an Associate Professor of Organizational Behavior at Barry University. He received a B.S. with a major in Marketing and a minor in Economics at the City University of New York in 1985.