Cho is driving Toyota to new heights-and straight past the competition Hong Kong, January 24, 2005-FORTUNE announced today that Fujio Cho, CEO of Toyota, is the Asia Businessman of the Year. Cho leads a company whose model lineup features some of the U. S. market’s most popular vehicles. Smart products and a sterling reputation for quality have lifted Toyota’s share of the U. S. market to 12%, and many industry analysts predict it will soon pass DaimlerChrysler to join the ranks of the U. S. Big Three. Cho earns FORTUNE’s nomination for his near flawless execution of Toyota’s plan for global expansion.
The story, “Full Speed Ahead,” appears in the February 7 issue of FORTUNE, on newsstands January 31 and at www. fortune. com. “By nearly every measure, Toyota is the world’s best auto manufacturer,” says FORTUNE writer Clay Chandler. “It may be the world’s best manufacturer, period. Consider: Last year, Toyota’s worldwide sales leapt 10%, to 7. 5 million vehicles, posting strong growth in all regions. But Toyota has long since kicked the Japanese habit of chasing sales and market share at the expense of profit. ” Toyota’s profits for fiscal year 2003 exceeded those of GM, Ford, DaimlerChrysler, and Volkswagen combined.
Toyota has embarked on an ambitious international expansion plan, though Cho is struggling with the complexities of transplanting Toyota’s vaunted production methods to foreign soil. For Cho, running Toyota is like “trying to pull a handcart up a steep hill-there’s always tremendous danger if we relax, even for a moment, we could loose momentum and be thrown to the bottom. ” Cho downplays-but does not disavow-the objective widely reported in the Japanese press of capturing at 15% share of global vehicle sales by the end of the decade.
But the multi-front blitzkrieg launched to reach that target has put unprecedented strain on the production process once hailed as the “machine that changed the world. ” The dilemma, says Chandler, is how to maintain the pace without diluting what Toyota executives call their corporate DNA-a principle called kaizen, the notion that engineers, managers, and line workers collaborate continually to systematize production tasks and identify incremental changes to make work go more smoothly.
Cho not only has to make this approach work in Toyota’s U. S.factories-where feedback from workers has made him change some of Toyota’s long-held approaches-but also in China, the world’s fastest growing auto market, where Toyota has forged a partnership with First Autoworks in Changchun. One of Toyota’s gambles has been the Prius, a hybrid car that critics claim has yet to be profitable. There is high demand in the U. S. , and China is pressing for access to the technology. Getting an early grip on this market may turn out to have been a shrewd move on Cho’s part, says Chandler. Many expect Cho to step down in June and take the more ceremonial role of chairman.
“Whether Cho stays on,” concludes Chandler, “expect Toyota to keep pulling its handcart uphill-and to rush to the next mountain the moment it gains the summit. ” FORTUNE, part of Time Inc. , is the global leader in business, known for its unrivalled access to industry leaders and decision-makers throughout the world. FORTUNE’s Asia edition, based in Hong Kong, is dedicated to covering Asian business from a trademark global perspective. With an Asian circulation of 85,000 and a worldwide circulation of 1,020,000, FORTUNE is one of the fastest growing magazines in the world.
Founded in 1930, FORTUNE has grown to a worldwide circulation of over one million and a readership in excess of five million. Annexure B -An authentic Leader… By Enrique Mora Source: http://www. tpmonline. com/mgmtldshp/authenticleader. htm Fujio Cho, President of the Toyota Motor Company, is an exemplary leader. In Japan the company has about a dozen plants, producing 3. 5 million vehicles every year. Seldom is Cho found in his office. He dedicates most of his time on the floor of the plants, congratulating the working groups with the best achievements.
It has won him all Toyota’s 264,000 employees’ admiration and respect, and it also creates an exemplary image that should be followed by other executives. Fujio Cho The world sees very few executives at Cho’s level spending so much time with employees. Is it that companies have to be at the level of Toyota to have these leaders? Or maybe Toyota is at that level because of the practices of these leaders? Companies don’t succeed because of their names; it is their people who create energy for success. The success of a company is a direct result of attitudes of the leaders who comprise it.
We can all “make the difference. ” Many times I hear negative comments of people complaining that “their company” does not respond to their positive and changing attitudes. Error: We can All influence the results of the company. And, if by chance, the company doesn’t have the appropriate atmosphere and vision to capture and take advantage of that positive energy, there is no problem. Get ready for a better opportunity, because you will surely find it. The example of Fujio Cho is impacting. Managers from all over the world should follow it if they want to meet the demands in the evolution process called “World Class.
” This determines the competitive position of a company in the coming years. This opportunity is in our hands, and we should not waste it. Here is a few questions to ask yourself: 1. – How well do you know your people? Do you know their names? Do they know your face? Do they come and talk to you? 2. – How do you show appreciation for the efforts of the people on your team? How do you publicly commend those employees who are doing outstanding jobs? 3. – Would you say that the atmosphere of your company is one of empowerment? Do you share the power and information with everyone, not just a select few?
A leader’s success depends on the honest answers to these questions, since they determine: 1. – How will your company do in the short and medium term? 2. – What is the level of collaboration you will have from your labor force? The trend of the automotive industry has clearly defined the economy in the last 60 years and it will continue to do so. The arrogance of “the three big ones” of America has blinded them. They don’t seem to be willing to change, and they continue to loose market share and prestige. The Japanese industry, on the other hand, shares its “secrets” with everybody.
Determine today what example you want to follow: that of the winners or that of the losers. The industries of the world need Leaders, people who give authentic support instead of orders; who model the behavior they want to see from others; who encourage ideas and new ways of improving processes and products; who “grow” new leaders for the future. I wish you a day of change and success, followed by another and another…… Annex C -Toyota experiences extreme self disappointment, somebody cry me a river Posted Aug 9, 2004, 10:48 AM ET by Christopher Diken Related entries: Hybrids/Alternative, Trends