Shared knowledge the key to success

By MARK STORY

Despite the car industry's metamorphosis from sheltered-economy status to exemplar of open trading, Toyota NZ has maintained its long-standing perch as market leader.

Remaining top since eclipsing Ford in new car sales in 1988 comes down to simple management principles by company CEO, Bob Field.

Referred to as "Bob's Theory C", Field chiselled his management tablet during the mid 1980s as a cheeky sideswipe to some flaky "Theory K" principles - those flaunted by high-flying casualties of Rogernomics.

In addition to becoming market leader, Field's egalitarian management philosophies have seen Toyota NZ scoop bouquets.

As well as repeatedly taking top honours in the National Quality Awards, the company was recognised by Toyota Japan as the best assembly facility outside Japan.

But the industry's biggest reform, tariff abolition, forced Field to play by new rules.

With assembly clearly unprofitable, he closed both Christchurch and Thames plants, reduced staff numbers by over 80 per cent, relocated the head office to Palmerston North - and refocused on used vehicle imports.

These changes may have left Toyota NZ a shadow of its former self, yet the company keeps on delivering awards and milestones.

As well as selling 16,000 new cars annually, the company is now the country's single largest importer of used vehicles.

Two thirds of the 6,000 used vehicles Toyota NZ sells annually are marketed under the Toyota Signature Class brand.

Faced with the lowest prices of any car market anywhere, it took Field about five years to make the Signature Class operation profitable. But by adhering to the principles of Theory C, he knew the rewards would finally follow.

Small its staff numbers might be - 180 nationally - but Toyota NZ repeatedly tops "best place to work" surveys. Its customer dialogue centre has also won the top call centre award three years running.

So why has Theory C been so successful? A potpourri of best principles globally and Kiwi-styled Japanese quality management manufacturing processes, Field's management thinking was fashioned by his years of on-the-job training.

After graduating with a commerce degree from Canterbury University in 1967, a 10-year stint at Ford here, in the UK and Australia showed Field the value of learning by observing what goes wrong.

"Too many CEOs today are over-playing the knowledge-is-power card," he says. "It's sharing the knowledge that get results. Our ability to outperform our contemporaries around the world has had a lot to do with self-help and on-the-job training - combined with sound human values." He hopes Toyota NZ's success will signal to other businesses that home-grown talent can create a global best-practice environment without the ivy league management-speak. Underscoring Toyota NZ's corporate culture are three key mantras:

* Empower people to learn by their mistakes on the job.

* Drive fear out of the workplace.

* Create a team environment with honest communication and mutual respect.

To help stabilise management thinking, Field has overlaid Theory C with key balances.

These balances are expected to add judgment to the decision-making process. Having been an industry leader for so long, he believes the best way to avoid becoming arrogant and making mistakes is to balance pride with humility.

Similarly, while Field wants staff to work as if they part-own the business, he says it's important to balance control with autonomy.

A lot of Field's Theory C centres around a competitive team spirit.

In fact, to do well in this business, he says staff need to get an adrenaline rush from winning. Like its competitors, Toyota NZ starts each month with no runs on the board.

As in sport, they know who's winning or losing and can analyse why.

"That's why company success is a team effort," says Field. "Living the team ethic is all about having fun. At monthly meetings, staff are required to be both informative and humorous.

"In recognition of team achievement we celebrate success together, Christmas bonuses are based on the performance of all three divisions" - new, used and after-sales service.

Despite his 20-year reign at Toyota NZ, Field doesn't see himself as a caretaker CEO.

Nor does he subscribe to the view that companies need to change CEO every three years to create new ideas.

"A CEO is only as powerful as their team. The measure of a CEO's success is how long it takes to develop sustainable cultural change," says Field.

He wants to be the best in everything and has robust targets to grow the parts and used vehicle sales. But he admits there's an area where Toyota NZ fails to deliver.

Employees don't rank the company highly in the opportunity-for-advancement stakes.

"With so many long-serving employees, the only opportunity for advancement is if I or others within my senior team get run over by a bus," says Field.

But what Toyota NZ lacks in career advancement, Field says the company compensates for as an incubator of young talent.

While the company can't satisfy ambitious people, Field tries to create a springboard for career advancement by teaching the values of self-development.

"We don't expect people to come into the company and wait to be trained before they can contribute," he says.

"It's all about learning by doing and letting people make mistakes."