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Peek under the hood at Toyota and you start to understand why management is worried. Rapid growth has forced this most Japanese of companies to rely more and more on gaijin (foreigners) overseas. Top brass%26mdash;the ones who transformed a lean upstart into a global powerhouse%26mdash;are nearing retirement, to be replaced by a generation that has never had a bad day at the office. And in the past three years, Toyota has hired 40,000 workers new to the company’s culture. "It isn’t an immediate problem; it’s like a metabolic disease you don’t know you have before it’s too late," says Tatsuo Yoshida, an analyst at UBS in Tokyo.
The cure is being applied everywhere from the executive suite to the factory floor. When Steve St. Angelo was hired from General Motors (GM) in 2005, the executive immediately found himself back on the assembly line for several weeks. It didn’t matter that he had spent almost 10 years at a plant in Fremont, Calif., jointly owned by GM and Toyota, where the Toyota Way has been alive and well for decades. The company figured an outsider hired to a management job%26mdash;a rarity at Toyota%26mdash;would need schooling in the basics. "They assumed I knew nothing about Toyota’s production system," says St. Angelo, who in June was promoted to North American manufacturing boss.
Just in case St. Angelo forgets any of his Toyota training, he has someone watching his back. His retired predecessor, Gary Convis, still gets paid to advise him. That’s an idea Toyota imported from Japan, where the company asks retiring engineers to stick around to mentor young employees. The ranks of these old-timers are growing rapidly as the company tries to safeguard its culture. Last year, Toyota rehired 650 of the 1,200 skilled workers eligible for retirement in Japan, and will soon have 3,000 of these folks on its payroll.
Even lifers get the treatment. Randy Pflughaupt has worked at the company since 1982 and this summer was promoted to U.S. marketing chief for the flagship brand. With the promotion, he was handed a stack of books and binders telling him all about the Toyota Way and was packed off to the Toyota Institute in rural Mikkabi, Japan, for a week of indoctrination. "Why does a 25-year veteran go to training? I could take it personally," Pflughaupt jokes. "It’s to remind me that I don’t have all the answers."
Although the institute is set in the hills overlooking scenic Lake Hamana, Pflughaupt says he saw only the walls of the hotel and classrooms. All week, President Katsuaki Watanabe, Chairman Fujio Cho, family scion Akio Toyoda, and others told 50 trainees how they built the company. Cho recalled opening Toyota’s first U.S. factory%26mdash;in Georgetown, Ky.%26mdash;and described how he dug into the community by joining the local Rotary club, eating in diners, and going bowling. The moral: Reading market data at your desk is great, but you have to leave the office to find out what’s really going on%26mdash;a process everyone at the company calls Genchi Genbutsu.
PROBLEM SOLVINGThere’s another, more stressful step that growing numbers of newly minted executives must endure: Finding a problem Toyota faces and come up with a solution, which will be presented to Watanabe. Pflughaupt is figuring out how marketers can analyze the effectiveness of different media%26mdash;print, television, Web%26mdash;in various regions.
