In terms of auto manufacturers, how Toyota arrived and became the number one car seller and has remained in top is a interesting read and is the subject of How Toyota Became # 1 by David Magee, Penguin Portfolio Books, NY, 2007.

If a company has a focus on the long term or a couple of generations from now, it will seemingly not focus on achieving short term results. Toyota is fortunate to be in a position where it can and does loook to the future. One aspect is do not give others reason to doubt the philosophy – keep the executive arrogance to a minimal. Do what regular people do – if they ride the trains, you ride the trains. It helps keep your decision making and remember what you do not know. For example – edgy, niche products attract some and can be very interesting to work on, but they do not attract the majority of car buyers. Toyota looked at the youth market, did not connect. They went back to the drawing board did more research and  set up the Scion brand for the market.

In all facets, the company learn the customer (do research), live the customer (continue to do research to fix) and empathize with the customer to make the experience better. An example of this is truck buyers – there is a popular idea of who truck buyers are, but research shows women drive trucks. They would appreciate features to make it easier which were not in the most popular brands. Toyota geared their trucks towards them and achieved sales, for the same features help the mythical truck driver.

The company has a widespread reputation of a conservative company, however the reality is it spends a great deal of time and money on research and once it makes a decision it is full steam ahead. One example of this is for years, Toyota made their vehicles in Japan and exported to the US, then then decided it was time to be in the US, they did a joint venture to learn and finally built a plant in Kentucky which began to win quality awards. This execution once a decision has been made beats competitors by 30% or more, which is worth billions in extra revenue.

The Toyota Way which is taught at Toyota Institute can be summed up as: a doing person is all that is needed. It does not matter who they are or where they are. We do not need geniuses. We need people  willing to question, questions and question. Once they find out the root cause of a problem, solve it immediately. Then disseminate and share.

Another thing learnt is start meetings with mistakes in order for people to learn. You do not learn from success, mistakes are what shape Toyota. We treasure mistakes says the President of the US Division. However, the idea is to make fewer and fewer mistakes. The thinking is the people hired are the right people, if you only talk about the success no one learns. If you talk about problems everyone can work on them together to solve them.

All the above need a management structure and hiring basis to allow it to strive and work for the betterment of the company in both good and lean times. In many organizations to implement the Toyota system means empower of teams and decisions do not go down the food chain with no questions asked.

Linking to dividend paying stocks, in all likelihood some or many of the measures can be seen in many companies as value has to be seen to be given and received. There are and will be different methods to manage companies as long as they make profits, there will be few who disagree. Once they do not make profits, then change is on the table. As an investor, hopefully you are considering the long term to receive dividends as well as capital gains. Generally long term means going through the economic cycles and being profitable at both ends, because of monopoly or monopoly like pricing or more properly creating great value for the customer.

There are more questions than answers, till the next time – to raising questions.