21 stcentury div strategy
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TOYOTAS 21ST CENTURY
DIVERSITY STRATEGYA Comprehensive Program for Minority Participation
in Toyota Today and Tomorrow
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Toyotas 21st Century Diversity Strategy
Introduction
Toyota Diversity Strategy
Section One
Diversity and The Toyota WayOur Guiding Principles
Section Two
ProcurementDoing Business with Minority-Owned Companies
Section ThreeAdvertisingNew African-American Advertising Agency
Section Four
Dealer RepresentationCreating Successful Minority Ownership
Section Five
EmploymentEnhancing Minority Representation and Inclusion
Section SixRetail InitiativesAvenues for Increasing Minority Participation
Section Seven
Community InvolvementSupporting Minority Communities and Causes
Section Eight
Diversity Advisory BoardOutside Advice and Accountability
Section NineImplementation and AccountabilityMoving the Agenda Forward
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The Toyota Diversity StrategyLeadership is a choice we make every day at Toyota. Over the last four decades,
we have redefined leadership within our industry by constantly moving the
benchmark of quality, corporate responsibility and best practices. With a
comprehensive strategy that is firmly rooted in the Toyota principles of contin-
uous improvement and respect for people, we now have the opportunity tobecome a leader in corporate diversity. We are pleased to present the Toyota
Diversity Strategy, a ten year, multi-billion dollar sustainable commitment to
minority participation in Toyotatoday and tomorrow.
The Toyota Diversity Strategy outlines the processes and programs we will use
to achieve our diversity goals. The programs discussed in this document are
significant and innovative and will impact our organization in meaningful
ways. This plan has received commitment from the highest-level officials in
Japan and our senior leadership in North America.
Essential ElementsAt the core of our plan are elements from which we will build a sustainable
diversity platform:
.We aligned our diversity commitment to the tenets of theToyota Way, respect for people and continuous improvement.
.We secured the support of our senior management.
.We established real goals ones that are actionable, ones that stretch usbeyond the status quo, and, most importantly, ones that we can achieve
now..We have made ourselves accountable. We have established criteria bywhich we will measure change and by which we will be judged.
.We have committed to a training and education program to acquirenew skills and gain new understanding.
.We created a diversity management structure with the authority andconviction to push our organization toward its vision.
.We have committed to an ongoing communication strategy. We willcommunicate our commitment and progress in diversity to
all who have a stake in the future of Toyota.
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Nine Diversity InitiativesToyotas diversity strategy will impact our workplace, our dealerships, our
business partners and the larger community. The initiatives discussed in this
strategy range from increasing minority representation in senior management
to addressing the under-representation of minorities in retail management
positions. We are devoting substantial resources (both human and financial) toensure that all aspects of the plan are fully staffed and fully financed. Further,
Toyota is taking the lead in fostering diversity throughout the automotive
industry. Two programs in particular address systemic issues in the retail
sector and will bring genuine, tangible, and widespread economic benefits to
minority communities.
A Better ToyotaToyota sees diversity as a pathway to create a better Toyota. Success in diversity
gives Toyota access to the best and the brightest. It creates opportunities fornew partnerships. Diversity allows Toyota the ability to fully participate in
todays changing marketplace. Diversity gives Toyota additional ways to make
a difference and to earn the respect of all of our communities. In short, it
provides Toyota with a new way to fulfill its missionto become the most
successful and respected car company in America.
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The Toyota Way is based on the legendary manufacturing system that has
helped Toyota build some of the best and most reliable cars in the world.
The Toyota Way is more than a set of tools and techniques. It is an attitude,
a philosophy and a culture that permeates all that Toyota does, including
our quest for leadership in diversity.
Positioned within the Toyota Way, the diversity strategy represents a fun-
damental sea change in the way we do business and think about doing
business. For Toyota, diversity is an opportunity to continuously improve
every aspect of our business and to show our respect for people.
Diversity and the Toyota WayOur Guiding Principles
Over the next ten years, Toyota will make a multi-billiondollar investment in diversity and align diversity with its
mission and core business strategies.
Our Commitment
. Toyota is committed tobecoming the industryleader in diversity.
. Over the next 10 yearsToyota will make a sigcant impact in the areof minority procuremedealership developmemanagement developmemployment, job trainand community suppo
Toyota Diversity Advisory Council
Community Involvement
Job Training
Retail Management Development
Minority Advertising
Dealer Representation
Procurement
Employment
Diversity Management Structure
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ProcurementDoing Business with Minority-Owned Companies
In 2002, Toyota will spend $700 millionwith minority-owned businesses.
Toyota seeks long-term quality relationships with its business partners
and suppliers. Partners and suppliers are considered part of the
Toyota family and are an integral part of the legendary Toyota supply
chain management network.
Building on the success of the minority procurement program that started
just four years ago and has already made great strides, Toyota is on trackto become an industry leader in minority supplier development. In addition
to its direct investments, Toyota leverages its relationships with all of its
suppliers to create a second tier of minority purchasing. This creates even
more economic opportunity for minority businesses. Toyotas procurement
efforts will include the diversification of our professional service providers.
Toyota builds accountability into its minority procurement systems. Its
procurement program offers a state of the art training program. Toyotas
opportunity fair is the largest in the industry, attracting thousands of
minority vendors each year.
Our Commitment
. TMMNA will purchaseleast $600 million froMBEs in 2002, surpasits 5% minority procument goal.
. Toyota numbers are inaddition to the $100million in confirmed TTwo minority purchasinat TMMNA.
. TMS will purchase atleast $100 million froMBEs in 2002, includprofessional services.
. TMS will achieve its 5minority procurementgoal by 2003 and willimpose a 5% goal on key Tier Two suppliers
. TMS plans to set a goputting $100 million minority and women-owmoney management fiby the end of 2002.
. Toyotas financial servcompany will continueuse of minority investmbanking firms in connewith its ongoing fundiefforts.
$ Million
200
400
600
1997 1998 1999 2000 2001 2002Projected
Minority Expenditure Trend
100
300
500
700
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AdvertisingNew African-American Advertising Agency
Over the next three years Toyota will spend $150 millionon African-American and Hispanic promotional programs
and establish a new relationship with an African-American
advertising firm.
Loyal and satisfied customers are essential to Toyotas business. To contin-
ually grow our market share, we must connect with all of our potential
customers in meaningful and creative ways. This is especially true in amarketplace where we must be heard above the cacophony of competing
advertising messages. In a growing diverse marketplace, Toyota must have
advertising partners who bring a wide array of perspectives, creative
solutions and energy to our business. These partners will help Toyota realize
the promise of a diverse market.
According to the National Association of Minority Automobile Dealers,
approximately 15% of American new car buyers are minorities. This number
is substantial and represents tremendous growth potential for Toyota
among this important group.
Conill Advertising has helped Toyota reach the Hispanic market. InSeptember 2001, Toyota will enter into a new relationship with an
African-American owned advertising firm to extend Toyotas reach to
the African-American market.
To further ensure that Toyotas marketing materials are effective and appro-
priate for multi-cultural audiences, Toyota has drawn on its diverse employee
base to establish an Advertising Diversity Awareness Panel. On a frequent
basis, the panel reviews upcoming advertising and provides feedback and
insights on the messages, images and cultural context of the materials.
In a multi-cultural society, where communication is even more complex,
Toyota is making sure its messages to all audiences are consistent with a
pillar of the Toyota Way, respect for people.
Our Commitment
. Toyotas commitment capture the full promiof the ethnic marketpWe bring to this goal aminimum commitmenof $50 million annualto African-American aHispanic marketing aadvertising firms, whicwill be split roughly oa 50-50 basis.
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When it comes to Toyota dealerships, our aim is clear: To have the bestdealers in the industry selling the best products in the world. This philoso-
phy extends to Toyotas minority dealership program and is the reason
Toyotas dealer diversity program is one of the most successful
in the industry.
While the industry tendency is to emphasize quantity over quality when it
comes to minority dealerships, Toyota takes a careful approach to increasing
its dealer count. This approach results in dealership values far exceeding
those of other leading manufacturers. For the minority dealer, this equates
to greater profits and a more valuable franchise. For the industry, Toyotas
approach provides an exemplary model for minority dealer success.
Dealer RepresentationCreating Successful Minority Ownership Interests
Driven by a vision-goal to lead the industry in successfulminority dealer ownership in terms of profits and
per store sales, Toyota will add 4 to 6 new minority
dealers each year over the next 10 years and increase
our dealer development budget to $25 million for 2002.
Our Commitment
. Building on the succethat has made Toyota in the industry for perage of minority ownersand #1 in minority desuccess, Toyota is pusfor even greater gains.
. Toyotas vision-goal is place 4 to 6 new minoowners each year over next 10 years.
. Toyota will expand itsmodel to embrace andencourage increased lof minority ownershipinterests, matchinginvestors to investmenopportunities.
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Toyotas North American workforce is in many ways beautifully diverse.
Statistical comparisons with the civil labor workforce and the equal employ-
ment profiles of the major U.S. automakers bear this out. However, we
recognize that there is still more to do as we dedicate ourselves to the
goal of meaningful diversity and inclusion at every level of the organization,particularly at the top.
Toyotas existing significant human resource tools and programs will be
better aligned with our new diversity strategy. These include The University
of Toyota, Career Net, minority scholarships and intern programs, Toyotas
management trainee program and its leadership development programs.
Toyota intends to become, over the next five years, an outstanding employer
of choice for all groups-by every reasonable and objective measure.
EmploymentEnhancing Minority Representation and Inclusion
With a base of nearly 8,000 minority associates nation-wide, Toyota will increase minority representation
at senior and executive levels of the organization.
Our Commitment
. Toyota is committed to immediate and steadyimprovement in its repsentation of people ofcolor and women in ousenior management ra
. TMS will create a newDirector of Diversity atsenior management leThe Director of Diverswill report to the execcommittee and be chawith the responsibility
coordinating all aspecof TMS diversity effo
. Toyota will improve resentation through a strof targeted developmerecruiting and retentio
. TMS will implement acomprehensive disputeresolution process forassociates.
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Retail Management DevelopmentThe automotive retail environment, which employs more than one million
Americans at more than 22,000 dealerships, offers thousands of well-paying
management opportunities. Partnering with its own dealers as well as
major publicly and privately owned dealer groups representing all makes,
Avenues for Advancement will open a new dimension to increase diversity
in the retail environment.
Retail automotive experience, especially at the general manager level, is
considered essential for anyone aspiring to acquire equity in a dealership.
Providing specific training in dealership management will create the all-
important link between successfully operating the dealership and owning
it. Toyota funding will help subsidize real-world experience as well as
education through such institutions as Northwood Universitys automotive
retail curriculum and the University of Toyota.
Retail Diversity InitiativesAvenues for AdvancementMinority Participation in the Industry
Through its newest program, Avenues for Advancement,Toyota will create sustainable avenues for minority
candidates to become successful senior managers in
Toyota and Lexus dealerships.
Our Commitment
. Toyota is committed tohelping talented minoprepare themselves foleadership positions wthe retail automotive se
. Toyota pledges $1 milto partner with Toyota/Lexus dealers to helprecruit, train, and deveminority employees fodealership manageme
and technical position. Toyotas commitment
have a significant econimpact within minoritycommunities.
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Retail Diversity InitiativesAvenues for AdvancementMinority Participation in the Industry
With thousands of jobs open within the technical fieldsof the automotive industry, Toyota is opening doors for
hundreds of minority youth.
Automotive Training CentersToyota depends on certified automotive technicians to provide quality
service for the millions of Americans who own our cars and trucks. Yet each
year there is a dwindling pool from which to draw candidates to complete
intensive training programs and become automotive technicians. In fact,
the industry at large is witnessing a shortage of thousands of workers in
this field each year.
In 1993, Toyota created the Los Angeles Urban League Automotive Training
Center (ATC). This joint venture with the Los Angeles Urban League provides
no-cost job training and placement for unemployed and underemployed
urban residents in the automotive industry. The program has graduated
850 trainees who have gone on to secure entry-level jobs. The economic
impact of this program has exceeded $20 million to date.
Starting in 2002, Toyota will replicate the success of the Los Angeles ATC
by opening a similar training facility in the eastern United States. Over theyears, it too will have a significant economic impact of hundreds of millions
of dollars.
Our Commitment
. Toyotas investment inLos Angeles AutomotivTraining Center (ATC) exceeded $7 millionsince 1992.
. The Los Angeles ATC ctinues to receive $1 mannually for operating c
. Toyota will spend $4 mlion to build an ATC ineastern United States train 125 students ann
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Community InvolvementSupporting Minority Communities And Causes
Each year, Toyota invests millions of dollars towardseducation and other social programs in the community,
providing thousands of people a chance for a better
life and access to opportunities.
Our Commitment
. Toyota is committed togiving back to minoritycommunities throughfinancial resources ancorporate volunteerism
. Toyota will allocate aminimum of 10% of itannual giving to minorgroups and causes.
. Toyota will dedicate asenior staff member tsupervise corporate givon minority programs.
Being a good corporate citizen is important to Toyota. We support a large
number of civic, cultural and charitable groups, education and scholarship
initiatives. Our support focuses on education with an emphasis on mathe-matics and science.
One of the most significant aspects of Toyotas diversity activities is its
support of minority organizations. Among these are United Negro College
Fund, Hispanic Scholarship Fund and our trademark Toyota Community
Scholars program. We also provide funding and volunteers to the 100
Black Men Young Black Scholars program.
Toyota supports organizations by giving time as well as dollars. Many of our
executives and associates volunteer in a broad range of non-profit
boards, mentoring and scholarship programs and other community based
activities. Toyota recognizes its corporate responsibility to respond to theneeds of these communities.
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As an international company, Toyota Motor Sales, USA, is a wholly owned
subsidiary of an overseas firm and therefore does not have the traditional
American board of directors structure. In a move believed to be unprece-dented for a multi-national company, Toyota will establish a Diversity
Advisory Board consisting of high-level community leaders from such
fields as business, law, labor and government. As a group, this board
will represent the racial, ethnic and gender diversity of the community.
Built on a model much like the Toyota and Lexus Dealer Advisory Councils,
the Toyota Diversity Advisory Board will bring real world insights,
provide an objective sounding board for our diversity strategy and, over
time, create a powerful network on a range of issues and opportunities.
The Toyota Diversity Advisory Board will meet with senior management
several times a year to be given overviews of Toyotas North Americaoperations. The Board will be fully informed about Toyotas diversity
strategy in progress. We expect the Boards involvement to be a signifi-
cant asset. This program is expected to become an integral part of our
ongoing North American diversity efforts.
Diversity Advisory BoardOutside Advice and Accountability
By the end of 2001, Toyota will appoint a distinguishedpanel of outside advisors to provide North American
management with guidance, oversight and fresh ideas
for its diversity strategy.
Our Commitment. Toyota is committed tothe success of its 21st
Century Diversity Strate
. Toyota has establishedmeasures for real accoability, real change anreal impact.
. Toyota will appoint aDiversity Advisory Boaas an expert resource
and a virtual guarantoof accountability.
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Aligning resources and policies in a manner consistent with the stated
importance of Toyotas diversity strategy is key to ensuring that the strategy
remains a priority. Only by dedicating resources and conveying the centrality
of diversity to all members of the Toyota family, can Toyota generate the
ongoing energy necessary to follow through with our diversity commitment.
Toyota is committed to developing a culture that views diversity as a path-
way to a better Toyota. This commitment demands that we support the
human resources aspect of our diversity strategy. We are embarking on a
five-prong plan to ensure that our diversity initiatives succeed throughout
our organization.
First, the senior management of Toyota North American companies will
communicate the strategy to every manager and associate. There will be a
system-wide rollout, both orally and in writing.
Second, the implementation of our diversity strategy will be driven by real
benchmarks and real timetables, which will be set forth in a writtendocument to be provided to all relevant managers.
Third, we will dedicate a lead manager in each area to ensure full
compliance at all levels of the company. These lead managers will report
directly to a senior level executive on a quarterly basis.
In addition, we will provide incentives to managers (reflected in rewards,
bonuses and positive performance evaluations) to ensure their full compli-
ance with the diversity plan and their full energies to achieving the specific
goals of the plan and meeting its timetables.
Fourth, we will have in place a planned deviation system, which will
address situations where managers fail to achieve our established goals
and timetables or commit less than their full efforts to achieving them.
Implementation And AccountabilityMoving The Agenda Forward
Toyota has developed a strong implementation processfor its diversity strategy, which is supported by the
highest levels of Toyota management.
Our Commitment
. Toyota is committed toregular reviews and thstrong oversight of ourprocesses, programs apolicies on diversity, sto ensure that we achiall that is truly possibfor a great companylike Toyota.
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Finally, we will continue to work with outside organizations to ensure
that our strategy is working and remains state of the art. We know that
our diversity strategy is the first step in becoming the company we strive
to be.
We have already referenced the importance of communications to all
stakeholders; our strategy relies on ongoing communications, updates andannouncements of success, and discussions of serious issues with our
associates, our suppliers, and our community. Starting with the launch that
will communicate the diversity strategy from our most senior executives,
Toyota will make information accessible and will have mechanisms to
respond to issues and concerns. Ongoing communications and prompt
feedback will be key to the success of the program. Toyota fully appreciates
the importance of follow through.
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