Theoretical Background
Efficient leadership is seen as one of the crucial factors affecting the company’s performance. Researchers, as well as practitioners, stress that leadership strategy should be consistent with the organisational strategy as well as the culture of the company (Witcher & Chau 2010).
Bersin (2012) claims that a high-profile top manager can be unable to run a company if he/she chooses the wrong leadership strategy or worse has no leadership strategy at all. Toyota has been one of the examples of an organisation with the strong leadership consistent with the company’s organisational strategy. It is possible to evaluate the leadership strategy employed to get an idea of the way effective leadership strategy is linked to the organisational strategy.
The evaluation of the company’s leadership strategy should be considered in terms of the theoretical framework. The transformational theory has been regarded as the most efficient leadership approach for decades (Witcher & Chau 2010). In terms of this paradigm, the leader inspires team members and implements the change.
At that, the change should be ongoing as the business world is constantly transforming. Notably, such frameworks as lean leadership and servant leadership have been developed within the transformational theory. These leadership styles are based on the concept of collaboration, effective communication, guidance and mentoring. The styles will be discussed in more detail based on the particular example of Toyota.
Toyota’s Background
First, it is necessary to provide some background information about the company in question. Toyota was founded in 1937 when it produced its first automobiles. Importantly, one family runs the company throughout its entire history. This contributes to the creation of a particular culture and vision in the organisation. In 1958, the company penetrated the US market (Company history 2015). This was the start of the company’s global growth.
Now, it is a high-performing company with a significant market share. It has also developed rapidly, and it had 9.7% of the global market share in 1998 while it achieved 13% market share in 2008 (Cole 2011). Schwagerman and Ulmer (2013) emphasise that the company has grown steadily for 40 years though other carmakers’ sales decreased.
The financial crisis of 2008 had a significant adverse impact on the development of the company and led to some reduction in production. However, the company managed to overcome the difficulties and was even more successful than its primary competitors who faced more substantial losses.
At that, the quake-tsunami that took place in 2011 was a significant impact the company is still trying to recover from. The natural disaster disrupted the supply chain that was highly efficient but unprepared for such a large-scale crisis (Agence France-Presse 2013).
It is noteworthy that Toyota has been an illustration or even a symbol of performance excellence and high quality. Piotrowski and Guyette (2010, p. 90) note that the organisation has been “touted as the pinnacle of automotive excellence” by such rating agencies as Consumer Reports. Nonetheless, there have been a number of constraints associated with poor quality, and the company had to recall millions of cars in the 2000s.
For instance, the scandal associated with car mats took place in 2009 (Cole 2011). Another serious quality crisis took place in 2010 when the company lost more than $2 billion as repair costs (Piotrowski & Guyette 2010). Such crises had a significant adverse effect on the company’s performance and image.
It is clear that some changes should be implemented. Thus, Mark Hogan who is American and has not moved through the ranks of the company was appointed (Agence France-Presse 2013). Some other international professionals are also promoted to top management positions to link the company’s leadership to the global market trends and peculiarities.
Toyota’s Leadership
Toyota’s Leadership and Culture
Irrespective of numerous difficulties, the company is still one of the leaders of the industry. It is necessary to evaluate the strengths of the leadership strategy used in the company to come up with methods to improve it. Liker and Convis (2011) provide a detailed analysis of the company’s approach to leadership and note that lean leadership employed has proved to be effective and consistent with the organisational strategy and culture.
Toyota is regarded as the creator of the lean leadership strategy, which is based on the principles introduced by Henry Ford (Shang 2014). Importantly, the lean approach has proved to be inefficient when it is not linked to the corporate culture of the organisation (Al-Najem, Dhakal & Bennett 2012).
To understand the essence of the lean leadership, it is crucial to consider some peculiarities of the company’s culture. Toyota’s culture is characterised by the so-called 4P model that consists of such major elements as philosophy, process, people/partners and problem solving (Liker & Hoseus 2008).
Characteristic features of this culture are the emphasis on open communication, development and training as well as building trust. Liker and Hoseus (2008) highlight two primary parts within Toyota’s culture. The external part starts with the organisation’s customers while the internal part concentrates on employees and their involvement in the culture.
Importantly, the basic principle of the company (and the core of its culture) is ‘go and see’ (Daft & Samson 2014). The case when Kiichiro Toyoda found one of his workers standing in front of his machine trying to understand why it was not working. The founder of the company literally rolled up his sleeves and looked into the machine’s pan.
He found a lot of sludge there, which was the reason for the malfunction. This case has become one of the major concepts for the organisation’s employees (executives, managers, workers and so on) who have been trained that to understand the core of the problem it is essential to dig into it.
The Role of the Leader
The role of the leader is clearly defined and incorporated into the organisational culture. Hence, the leader is an observer who spends a lot of time with employees and is an empathetic listener (Wilson 2013). The leader is a lifelong learner who is ready to acquire knowledge or to be trained.
The leader is an initiator who develops, communicates and implements the plan. This is the person who is able to take risks as well. The leader is a lifelong teacher who is eager to find and realise new teaching opportunities. The leader is a role model who inspires employees. Finally, the leader is a supporter who encourages, guides employees and who has the necessary skills of the so-called servant leadership.
Servant leadership presupposes prioritising employees at the top while placing the leader at the bottom of the pyramid (Shang 2014). Such leaders have three primary responsibilities. First, they support the operations, which implies guidance and mentoring.
Secondly, they promote the system, which presupposes effective articulation of the vision and mission as well as development of the healthy atmosphere in the company. Finally, they lead the change through mentoring, encouragement and employment of various tools. Importantly, the servant leadership also involves the concept of value-adding work, which is the process of doing tasks in the environment where all members add value.
Lean Leadership
Since Toyota’s culture is described, it is possible to define lean leadership and evaluate its effectiveness. The concept of the lean leadership has developed from the lean manufacture. The primary concern of the latter is eliminating wastes. The concept transcended other areas, and now lean leaders focus on eliminating any wastes in production, quality, provision of services, communication, and so on.
The central goal of the lean approach is to change the culture of the organisation from “passive and defensive to open and pro-active” (Al-Najem, Dhakal & Bennett 2012, p. 125). The company with lean leadership ensures that customers are the major priority, and the customers should also feel that.
This type of leadership presupposes elimination of barriers between senior management and employees. Another characteristic feature of the lean approach is standardisation (Chandra 2013). Mann (2009) stresses that lean leadership can be effective when senior management adopts it and sets an example, which leads to the development of the corresponding mind-set.
As has been mentioned above, the leadership strategy has to be closely linked to the company’s culture, and this is the case with Toyota. The company’s corporate culture is based on the principle of empowerment of employees who are trained and committed to the culture. Leaders have to go and see what is really happening on the site.
Prior to obtaining the right to make decisions, they have to be at “gemba”, which is the place where “the value-creating work happens” (Ahmed 2013, p. 32). There are no barriers between senior management and employees. Cooperation and open communication are the basis of the decision-making process. Finally, both Toyota’s culture and leadership strategy are based on the principle of empowerment. All employees are adding value, which is especially crucial when it comes to quality.
Improvements to Be Made
Nonetheless, it is clear that the company, which has always been a symbol of high quality, has been involved in a number of quality scandals. This shows inefficiency of the leadership practices. Senior managers seem to forget about the ‘go and see’ principle or worse they chose to conceal some issues, which later led to significant impairment of the quality of products and services provided (Rajasekera 2013).
Hence, it is essential to make sure that senior managers are committed to the culture as the lean leadership starts with top management. At that, these leaders should also be aware of major trends existing in the global market to be ready to address various issues that can occur (Agence France-Presse 2013).
It seems that the principle of reporting about problems and malfunctions rather than concealing them was abandoned in the late 2000s (Piotrowski & Guyette 2010). The organisation is lacking for transparency when it comes to operations, as well as communication among employees. These impairments in the leadership practice can be removed through the implementation of the change. Employees should be trained and mentored to become more committed to the corporate culture of the organisation.
Apart from that, it is clear that the leadership failed in the period of crisis. The quake-tsunami in Japan and the flood in Thailand in the 2010s impaired the supply chain of the company, and it was unprepared to act in the time of crisis. Heineman (2014) stresses that crisis management should be incorporated into the leadership strategy utilised.
The focus on quality should remain but executives should pay more attention to possible threats and crisis situations. The practice based on the ‘go and see’ principle should be facilitated by practices based on the principle ‘evaluate and foresee’. Employees should constantly question decisions made and make sure that the slightest issues are tackled properly.
Finally, the organisation has to be more transparent when it comes to internal as well as external communication. Rajasekera (2013) argues that Toyota’s inability to employ social networking has led to a significant damage of the company’s reputation. At that, modern customers are heavy users of such kind of technologies. More so, public opinion is often constructed through social networks. Therefore, it is crucial to utilise this platform as a way to increase the organisation’s openness. The focus should be made on the quality.
Conclusion
On balance, it is necessary to note that Toyota has long been a symbol of quality in business operations and leadership. The company has developed and successfully utilised the lean leadership. This paradigm consists in the elimination of all possible ‘waste’ in operations, manufacture, communication, leadership and so on. It presupposes elimination of barriers between senior managers and the rest of the employees.
It is also based on the principle ‘go and see’ where all employees are active contributors adding the value. The leadership strategy is closely connected with the organisational culture, which makes it so efficient. However, the company has had certain difficulties associated with impaired quality lately. At that, the situation can be improved if Toyota returns to the core values and practices. The major focus should be made on such aspects as decision-making, transparency, and crisis management.
Reference List
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