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The Leadership of Akio Toyoda

Question: How would you describe Akio Toyoda’s leadership style?  Explain.

Akio Toyoda’s leadership style can best be described as a combination of a transformational and entrepreneurial leadership.  Transformational leadership is a leadership that inspires the entire organisation and affects the employee’s belief by gathering their wills and encouraging employees to perform to their leader’s vision.  (Certo & Certo, 2006, pp 370)

Transformational leaders motivate employees by synchronizing the leader’s vision with their employees, pulling to the idea rather than pushing it.

Transformational leadership can also be related to showing of charisma, intellectual stimulation, and individualized consideration with the ability to bring changes in an organisation.  Transformational leader are often required to turn around companies or to transform the entire organisation for new concept or strategy.

Toyoda has a high standard of moral and ethical conduct and is held by Toyota’s employees in high regard exemplifying his charisma.  He also has a strong vision for the future and is always challenging Toyota’s norm by intellectual stimulation.  This is shown when he is set to abandon “kakushin” or “revolutionary change which is the prior President’s approach to redesigning plants and operations. He believes that Toyota is over concentrating on high technology, superior but costly processes and too excited in expanding the market and making decision with very few top executives.

Toyoda is set to change this and to set Toyota for building reliable, practical, affordable vehicles for the mainstream consumer. Toyoda believe that this is what the consumer wanted and what he is determined to give.  Toyoda has been known to push Toyota’s global standing among other automobile competitors, taking Toyota further than its Japanese roots and has been emphasizing styling and performance in Toyota’s automobiles.  This shows that Toyoda is willing to bring changes and is willing to change the entire concept of the organisation.  Toyoda ensured that his employees understand why the need of the changes exemplified his vision and brings the corporation for change.  Toyota employees embrace this and set for this new vision of transforming Toyota.

Entrepreneurial leadership is a leadership style that the leader acts as if he is self employed.  This leadership calls for strong leaders who act as if they are playing a critical role in the organisation.  Entrepreneurial leadership has a strong urgency to achieve and perform.  Best described by (Oliver Cromwell, 1599 -1658), who once remarked, “He who stops being better, stops being good.”  Entrepreneurial leader takes their own initiatives and makes their presence felt by the employees, demonstrate creativity and consistently pursue new opportunities.  Entrepreneurial leader take risk and is always open for new ideas and provide direction to their subordinate.  Even if they fail, it will be used as a lesson learnt for future endeavors.

Toyoda is a strong believer of “genchi genbutsu” or “see it for yourself” which is a Toyota’s key tenet meaning to get out of your desk and see the source of the problem yourself.   That’s exactly what Toyoda did when he visited a Toyota dealership in Ann Arbor, Michigan. He wanted to personally investigate a pickup truck recall.

Toyoda made the trip so secret that even Toyota’s public relations staff didn’t know he was there. While at the dealership, he reportedly got down on his hands and knees to examine the undercarriage of a truck and getting dirty at it (Micheline Maynard, 2009 New York Times). As John C Maxwell rightly put “A leader is the one who knows the way, goes the way, and shows the way.”  This fits seamlessly into collaborative culture and methods.

He is also challenging old Japanese executive method where top Japanese executives are rarely seen but he can be seen everywhere from office, at site, at dealership shops and also even plants and loading docks.  In his recent appointment as President of Toyota in January this year, he announced that he would pop up everywhere as he did in Ann Arbor.  Toyoda also said that “I want to be president closest to the site,” and “I’ll try to make changes without being tied down by the past.”

Toyoda behave as if he is self employed.  He could have easily used his power to ask his subordinates to visit the sites but he prefers to see it himself.  Toyoda reflected how the role he is playing in the organisation as very critical. This reflects on his entrepreneurial leadership.

This shows how Toyoda is determined to bring changes to Toyota.  One of his early initiative and reform plans is also to revamp the entire senior management of Toyota.  He plans to change his four executive vice presidents and many of his 19 senior managing directors.  In bringing changes he will need followers that will assist him in influencing the grassroots and empower the employees to understand Toyoda’s vision.  The new appointed vice presidents and managing directors will aspire and share the same vision like Toyoda and will be a great asset in helping him achieve this vision of transforming Toyota again.  Having committed to this new vision then only his employees will be able to understand and aspire to achieve Toyoda’s vision.

This also fits into Toyoda’s transformational characteristics.  Transformational Leaders are always visible and will stand up rather than hide behind their troops. They show by their attitudes and actions how everyone else should behave. They also make continued efforts to motivate and rally their followers, constantly doing the rounds, listening, soothing and enthusing. (Bass, B. M.,1985).

Taking the helm when Toyota announces first global sales drop in 10 years, Toyoda is perfect for the job.  Watanabe, his predecessor describes Toyoda as the best person to lead as he can bring a new point of view (entrepreneurial) and has the ability to act (transformational).

Toyoda during his senior management tenure in China played a vital role in completing the merger.  The prior joint venture that he had is troubled by a financial problem partner.  Toyoda pushed for another partner and by influencing the top management and government officials he completed the merger.  Toyoda behaved as if he is taking the risk that he will lose the whole venture but will receive huge returns if one is made.  Toyoda took the risk, played a critical role.

Toyoda have a strong urgency to achieve and perform and he couldn’t sit idle and watch the venture to collapse.  Instead of waiting he took the risk and made the profit. Managers with entrepreneurial leadership have a strong screen of opportunity and have a high need for excellence (McClelland, 1983).

He also revamped the entire concept of how department heads can now report directly to executive president and has successfully eliminated the long bureaucratic process.  The moves that Toyoda made really impacted on how things were done in China.  This exemplifies how he positions himself in order to materialize Toyota’s organisation’s objectives which are a trait of a transformational and entrepreneurial leader.

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