Alistair Davis, chief executive of Toyota New Zealand, talks to Gill South about succession planning:
Succession planning has always been important to Toyota New Zealand; we've always had that mentality. I was groomed into the role of chief executive over a period of several decades.
While we obviously try to marry talents to positions, it is my feeling that to be a successor, or land a management role, our people require broad and proven experience across all areas of the business.
At Toyota, this might involve a number of rotations over a decade or more and future managers must prove themselves in four key areas.
Firstly, they must have operational capability - for example being able to sell, or run a revenue generating business.
Secondly, they need to operate well in corporate functions, through roles involving marketing, information technology or finance, for example.
They must understand Toyota's global philosophy and way of thinking, so being exposed to Toyota Motor Corporation in Japan is all-important.
Finally, our future managers must prove their ability in people leadership; building strong groups and culture.
In my case, I spent over 20 years in Toyota New Zealand covering a wide range of roles before spending several years working for Toyota in the United States. It was this exposure to a different market that made me realise there's more than just the Kiwi way of doing things and this was an important growth period for me.
One of the other important areas we focus on in succession planning is continuing education. Some of this is company-centric and delivered in-house or through on-the-job training, and some is encouraged through further tertiary education.
At Toyota New Zealand, we have an incredibly low staff turnover; under 10 per cent per annum. I think this is partly due to the endemic philosophy of our business that clearly articulates our values and business objectives and ensures all our people are going in the same direction.
Our company in New Zealand is run on facts and values, not emotions or "seat of the pants" ideas. As part of our succession planning, our people have to buy into this approach.
We conduct 360 degree reviews at management level and above on an annual basis.
We also have a process called four keys of managing people which is a formalised interview process that happens several times a year with every staff member. At these sessions staff can share how they want to be rewarded, recognised, what their key focus is, and then once a year they have a formal appraisal and salary review.
I think the regular performance review process is critical for any business, regardless of size. Not only do they facilitate the hard discussion but they lead into development, training and rotation opportunities.
Continuous improvement and respect for people are the two pillars of the Toyota Way. In other words hard results and how well you interact with people be they customers, agencies or staff. We look for people that exemplify both these things when we are spotting future successors.
We always look internally at management level. In the last 20 years there have only been two external management appointments.
We have a quarterly review with top management where we discuss various candidates for future succession and believe firmly in managing our own people directly, without interference from an HR department.