Peter F. Drucker’s little book, The Effective Executive, identifies five essential qualities that make for effectiveness. The first is a feel for time. The second is knowing what to contribute. The third is knowing where and how to mobilize for best effect. The fourth is setting up right priorities. And, finally, the fifth is knowing how to synthesize all these through effective decision making.

Kiichiro Toyoda, founder of Toyota Motor Manufacturing (TMM), could be Drucker’s textbook example of effectiveness. How did Kiichiro Toyoda create his company’s phenomenal success in automobile manufacturing? Timing, choosing what to contribute, knowing how to mobilize his strengths, setting up right priorities and above all else, knowing how to integrate all these through effective decisions.

Time

A feel for time is the most important attribute of an effective executive. One key aspect of that feel, that grasp, is timing -- knowing when to act. Kiichiro chose to begin his automobile business in the 1930s even though the world’s economy was in a serious depression. After four years of experiments, his fledgling company was ready, just in time. Government regulation of the automobile business became severe. Only two automakers managed to be licensed by the Japanese government and Toyota was one of them. Another example: Thomas Watson, Sr., chief executive officer of IBM, chose to send his engineers back to the university during the Depression, thus preparing them for the great inventions to come. These men had unusual insight about the future and when to act to affect that future.

Another sign of the effective executive is an ability to take time. Taiichi Ohno, the innovator crucial to what we now know as TPS, credits his approach to Kiichiro Toyoda’s father Sakichi. Here Sakichi Toyoda describes his attitude toward time (from Ohno’s Toyota Production System [1988]): "The textile industry at that time was not as large as today’s. Mostly, older women wove at home by hand. In my village, every family farmed and each house had a hand-weaving machine. Influenced by my environment, I gradually began thinking about this hand-weaving machine. Sometimes, I would spend all day watching my grandmother next door weaving. The more I watched, the more interested I became."

The elder Toyoda, then an observant 20-year-old, used this approach to time to help him invent, among other things, a loom that would stop automatically when the thread broke, a device crucial to TPS in several ways. It became a model for autonomation, or mistake-proofing, and the sale of its patent brought the money Sakichi turned over to his son Kiichiro to help him begin automotive manufacturing. Ohno attributes his problem-solving approach to Sakichi Toyoda’s sense of how to spend time well. "Stand on the production floor all day and watch," Ohno urges would-be problem-solvers, passing on the Toyoda legacy of careful, patient observation.

Contribution

Great companies are structured by more than bricks and mortar. To build IBM, Thomas Watson, Sr. contributed a philosophy: "Respect for the individual; Best customer service; Excellence in all that we do."

Kiichiro Toyoda held a very similar set of beliefs about how Toyota Motor Manufacturing Inc. should be managed. Respect for his customers and his workers led him to see that customers did not want to pay for waste and inefficiency and that workers did not want to make low quality goods. His chosen path toward excellence lay in making only what is needed, when it is needed, and in the right quantity. This philosophy, the basis of TPS, has become known as Just-In-Time (JIT). Taiichi Ohno describes its initial impact: "‘Just-in-time’ was new to us then and we found the concept stimulating. The idea of needed parts arriving at each process in the production line when and in the quantity needed was wonderful." JIT was a rich concept that evolved well beyond this early outline of a production style. But notice Ohno’s choice of words here. Knowing his workers well and respecting their abilities, Toyoda could make his best contribution by stimulating and inspiring. Perhaps because he was a gifted inventor like his father, Toyoda understood the value of inspiration and the natural human urge to improve on the status quo.

Strengths to mobilize

Kiichiro Toyoda had many strengths but the two most important for his young company were his persistent search for knowledge about the automobile business and his belief in the talents of his people. In 1930, before there was a Toyota Motor Manufacturing, he toured European and American automobile manufacturing plants. It is reported that he visited with Henry Ford, maybe more than once. He most certainly read and reread Henry Ford’s book, Today and Tomorrow. But he knew he would have to do better than merely imitate what were then "best practices." He also knew that he would do better because he believed his people were his intellectual assets. In 1933, after his travels, he said, "We shall learn production techniques from the American method of mass production but we will not copy it as it is. We shall use our own research and creativity to develop a production method that suits our own country’s situation." His TPS is founded on the belief that, given the chance, people will persist in learning. They will discover improvements by a continuous search for ways to eliminate waste in processes, for example.

About 1934, in the beginning of TMM, when engines were being developed, Toyoda decided to duplicate the Chevrolet six-cylinder engine. The experimenting continued for some time. Some 300 castings had been produced as a lot. However, unfortunately, the first engine made with these shiny new castings failed to achieve expectations. This failure was a crisis for the young business.

Toyoda recalled his experience in his father’s loom plant. Back in 1896, Kiichiro’s father had invented a loom that would stop automatically when a thread broke. Such a system meant no piece advanced without having its quality confirmed. Kiichiro realized that in his casting experiments he had not confirmed quality at each step of his process. He decided to try again, this time with "one-by-one confirmation." This did not mean just zero defects but rather a "verification of each process in relation to the preceding and following processes, a whole system."

Priorities

Each year Business Week publishes its list of "The Best Performers" among American companies. The most important thing about this year’s list was the factor that sets these companies apart: "Sweating the details even when all signs indicate you could kick back and relax. If there’s one management trait knitting together the performance among the Standard & Poor’s 500 companies, that’s it." Translate this into a personality type and you have the inventor, the person who always looks at things in terms of how they could be improved on. Take, for example, Henry Ford, a notably effective executive himself. In Thomas McCraw’s Creating Modern Capitalism, Ford is described this way: "He constantly tinkered with machines. He was never able to sit still, and was always talking with fellow mechanics and engineers about better ways to do things."

Integration

Kiichiro Toyoda began with some very simple common sense principles. First he believed that one must produce in small quantities with limited capital expenditures. Second, he believed, like Henry Ford, that customers are first. Third, he believed people are intellectual assets. Fourth, he believed that it was crucial to eliminate waste. Finally, he believed it all begins and ends on the shop floor.

Beliefs are one thing and results are sometimes another. That’s why Drucker’s book stresses "getting the right things done." The TPS system transforms Toyoda’s beliefs into effective action through employee empowerment, standardized work, just-in-time, continuous improvement and quality at the source -- five effective ways to get things done.