Management Lessons of the '07 Toyota Camry

Can the Camry Save Toyota?That, of course, is one of the most stupid questions ever posed, because unlike some other vehicle manufacturers, (1) Toyota doesn’t need saving and (2) a large part of the reason why it doesn’t need saving is because of the Camry, which has been the best-selling car in America for eight of the last nine years, including the last four years running.

Can the Camry Save Toyota?

That, of course, is one of the most stupid questions ever posed, because unlike some other vehicle manufacturers, (1) Toyota doesn’t need saving and (2) a large part of the reason why it doesn’t need saving is because of the Camry, which has been the best-selling car in America for eight of the last nine years, including the last four years running. The car was introduced in the U.S. in the fall of 1982 as an ’83 model, and in this period of time, more than 6.5 million Camrys have been sold in the U.S., by far the biggest market for the car (i.e., it is sold in 104 other countries and has racked up over 10 million total sales since 1980). Toyota Motor Sales U.S.A. group vice president and general manager Jim Lentz is able to describe the Camry as having evolved to “iconic status as the quintessential American family sedan,” something that, say, the people at even Chevy or Ford would be hard-pressed to argue with.

 

Don’t Rock the Boat, Right? Wrong. 

So, here’s a wildly successful midsize car. The fifth generation, introduced in 2002, is proving to outsell other vehicles in the category even though it is in the waning days of its production. So what do the designers, engineers and marketing people do?
(1) Stay the course.
(2) Play it safe.
(3) Keep on keeping on.
(4) None of the above.

Although one might argue that the answer is (3), it is closer to (4).

Listen to Lentz: “Our extensive research confirmed unequivocally that owners of the current-generation Camry love their cars, believe that the size of the current Camry is just right, would like to see a more serious, total package of performance from the sport grade, believe that value is of critical importance and would like more of it.”

All that seems to say is that there are a whole lot of happy owner/drivers out there with, perhaps the crowd owning the SE trim being interested in a little more pep and a stiffer suspension setup. It’s not hard to imagine Toyota development engineers being able to take care of these matters with one hand tied behind their workstations.

Oh, but Lentz says that they found out a little something else during this research among the owner body: “They believe that the styling of the current Camry is too conservative.”

So what’s a company to do? How about starting a revolution?

 

Risky Business.

Maybe revolution is too strong a word. But maybe not. Consider what you would do if you were chief engineer Kenichiro Fuse. Given the success of the previous-generations of Camrys, you might want to minimize risk. And doesn’t everyone say that there is a conservatism characteristic of large Japan-based companies with the exception of, maybe, Sony?

Yet Fuse explains, “In Japan, there is a term, tumara nai, that captures the idea of that which is boring or uninspired. We decided that tumara nai had no place in the development of the new Camry.” He admits that this decision wasn’t made lightly, that the determination was made not merely to make a car that isn’t boring, but to choose “the path of higher risk—with the potential for higher reward.” He states, “In short, we went from basing our decisions on what is the definition of a Camry to focusing our energies on what a Camry should be, what a Camry can be.”

The “is,” of course, is the path of baked-in probably certain success. After all, there is undoubtedly a strong percentage of those 6.5 million Camry customers (not all, as some have certainly gone on to different vehicles or another realm; the median age of the current Camry owner is 55), who would be perfectly satisfied with the new generation car being largely what its predecessors have been. But that would be even from the engineers point of view tumara nai. So they made the decision to change, the decision to take a risk.

What does a risk do for your development team? “It energized and challenged our development team. It opened doors that we did not know existed.”

“This shift in focus was rejuvenating,” Fuse says.

Here’s a situation where you have a team that is at the top of its game getting even more enthusiastic. These are people who, Fuse admits, heard happy Camry owners describe the car as “vanilla, and bread-and-butter and Dad’s car.”

 

Toyota Meets the Guys from Cupertino.

There is something to be kept in mind here. This wasn’t a case of a skunk-works project. This is the Camry, the car that is selling even without the proverbial piles of cash that are being stacked on the hoods of some of the competitors. Yet the management of Toyota Motor Corporation made a decision to empower Fuse and his development team to take on what has to be considered to be a radical change to a tried-and-true formula. While the 2007 Camry is not a car that redefines “car,” the likelihood of the management of a company to permit a fundamental rethinking of a core product (unless that company is Apple, perhaps) is infinitesimal. Sure, a niche vehicle, a small-volume platform. That’s do-able. But something that has been a perennial best seller despite the fact that it is considered to be basically boring, that takes a nontrivial amount of intestinal fortitude, to put it with a mild euphemism.

 

Success Happens. (No It Doesn’t)

“At Toyota,” Jim Lentz says, “continued success is not taken for granted.” You make success. It doesn’t come to you. What is often lost when people talk about Toyota and the philosophy of “continuous improvement,” they don’t realize that it isn’t a philosophy as much as it is a practice: It is something they do, not merely think or talk about. This is crystallized in the ’07 Camry’s development.