Any study of business management always refers to Toyota and Lean management. But Toyota have always struggled in F1. I think on other forums Toyota and Honda's management shortcoming have been discussed, but came across this article in the Wall Street Journal, that discuss how Toyota are going to apply what they do and do well in their car plants to the F1 racing team.
Will Toyota's Way Win on the Track?
Car Maker Is Counting On Its Consensus Style to Break Formula One Losing Streak
By JOHN MURPHY
When the Formula One racing season starts on Sunday with the Australian Grand Prix, Toyota Motor Corp., which can practically do no wrong in the factory and the showroom, will be out to prove after years of disappointing finishes that it can finally turn things around in the world's top auto-racing circuit.
Since joining F1 in 2002, Toyota has never won a race or ended a season in better than fourth place despite spending an estimated $2.5 billion the past six years. Last year, it finished sixth out of 11 teams, causing restlessness among Toyota's top executives.
"Money cannot buy success in F1," says Marcel Cordes, executive director of Sport+Markt, a sports-marketing consultancy in Cologne, Germany. "The lack of victories is becoming more and more of a problem. I think 2008 is the key year for them to show that they are not only part of the show but a noteworthy challenger."
Now, Toyota is pinning its hopes on fully implementing its vaunted consensus-management style, which is out of step with the rest of the world of grand-prix racing, to breathe life into its half-billion-dollar-a-year F1 team.
When Tadashi Yamashina took over as Toyota's F1 boss last year, he began teaching his 650-member team of drivers, engineers, designers, mechanics and support staff that the key to winning can be found in the Toyota way, a set of management principles that helped the company grow from an obscure Japanese auto maker into a global auto giant.
"We encourage teamwork and we always have our minds set on kaizen," which in Japanese means continuous improvement, says Mr. Yamashina, who manages the team at its headquarters in Cologne.
While governments, hospitals and manufacturers world-wide have successfully copied Toyota's celebrated philosophy, many racing analysts question whether it is suited to the competitive world of F1. In F1, much of the drama occurs off the racetrack as teams spend millions of dollars researching and building what they hope will be the fastest car. Historically, the most successful teams have been led by strong personalities who function like field generals in battle, calling all the shots not only during the race but also during the design phase.
"To shine in F1, you have to be reactive, very quick in everything," says Patrick Camus, an F1 analyst and commentator for the French motor-sport magazine Auto Hebdo. The Toyota team, by comparison, is "very heavy to drive, like a boat that's too large."
Toyota adopted the traditional F1 management style when it joined the circuit six years ago, as part of the company's strategy to enhance its brand image as its car sales expanded globally.
But Mr. Yamashina says he was struck by the limitations of this traditional management style, which he says relied too much on the experience and skills of one individual. A 30-year Toyota veteran with little F1 experience, Mr. Yamashina, 56 years old, switched to the system he knew best.
He redesigned the team so there is one manager in charge of the chassis and a second in charge of the engine. Then he tried to open up lines of communication so all team members can share their expertise, much in the way Toyota has made its auto plants successful. At the plants, even low-level employees are encouraged to recommend improvements and empowered to stop production if a problem is suspected.
While all F1 teams rely on teamwork -- involving hundreds of people from aerodynamicists to materials engineers to test drivers -- the Toyota philosophy takes it to a new level. For example, when someone encounters a problem on the team's F1 racing car -- such as the electrical system, the tires or engine -- the entire team is brought together to discuss the problem and reach a solution. Under traditional F1 leadership, the team manager would make a decision alone or with a small group of advisers to remedy the problem.
Many Toyota team members, accustomed to the faster-paced decision-making process of traditional F1 teams, resisted the changes at first, says Mr. Yamashina. But over time, he adds, they realized that the Toyota way, while not necessarily the quickest way to manage, is the most effective because everyone knows the background of a decision.
Still, it wasn't enough to avert another lackluster 2007 season.
Critics say Toyota performed best under the leadership of British technical director Mike Gascoyne, who is known in racing circles for his aggressive style. With Mr. Gascoyne, the team ended the 2005 season in fourth place, its highest finish to date. By 2006, however, Toyota suspended Mr. Gascoyne because of "differences of opinion," Toyota says. Mr. Gascoyne declined to be interviewed for this story.
Performance aside, Toyota's exposure in Formula One reaps many benefits, Toyota executives say.
Toyota President Katsuaki Watanabe says the company's motor-sport activities stimulate excitement among car buyers, especially the younger generation. The technical demands of F1 racing also lead to discoveries -- such as ways to make cars lighter and thus more fuel-efficient -- that can be used in the company's mass-produced vehicles, Toyota officials say.
The company has fared better in other forms of motor sport. On March 9, Kyle Busch gave the Toyota team its first victory in the Nascar Sprint Cup, stock-car racing's top series.
As a marketing tool, however, there are few sports that give sponsors wider global exposure than F1. Each Grand Prix draws millions of viewers world-wide, especially in regions like the Middle East, India and China, where Toyota is experiencing fast-growing sales, says Simon Chadwick, professor of sports-business strategy and marketing at Coventry University Business School in Britain.
Mr. Chadwick says that while F1 enhances brand image and name recognition, there is no evidence that poor performances have a negative impact on a sponsor. That said, as a car maker with clear ambitions to be a Formula One champion, Toyota's mediocre performance on the racetrack may eventually begin to tarnish the company's image, he says.
"There are diminishing returns to underachieving. People will only accept that for so long and then there will be a negative rub-off," he says.
The Toyota team acknowledges its shortcomings but has no plans to abandon its management strategy. Under the Toyota way, mistakes have always been welcomed as an opportunity for learning and improvement. Mr. Yamashina says it has taken time for the team to realize the full benefits of this new management style and he hopes to see the results this season.
"Once we apply this system in F1, gradually everybody's capability might be increased," he said.
During the off season this winter, for example, the Toyota team worked at its Cologne headquarters to improve the aerodynamics of its new TF108 car, which Mr. Yamashina cites as one of the main reasons for the team's poor performance last year.
Their teamwork paid off. During preseason testing in Barcelona, Spain last month, Toyota driver Jarno Trulli recorded the fastest time, circling the 4.655 kilometer, or 2.886 mile, track in 1 minute 20.801 seconds, ahead of last season's F1 champions, Ferrari, the team sponsored by the Italian sports-car maker.
"We set ourselves very high standards so this season we want to prove we can compete with the best in Formula One," Mr. Yamashina says.
