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How Toyota is future-proofing its innovation reputation

An insider's look at Toyota's technology transformation

· transformation,Technology strategy,Toyota

What do a former elite rower, a car that runs on water and an award-winning IT transformation have in common? Plenty, as it turns out.

Dmitri Colebatch has a history of high achievement. In a former life he represented Australia as an elite rower for nine years, notably winning silver in the Men’s Pair at the 1998 World University Championships in Croatia. These days, his focus is above the waterline but is no less strenuous.

As Toyota Australia’s Corporate Manager Solutions, Dmitri has played a key role in helping the business shape and implement its technology strategy as it prepares to wind up 55 years of car manufacturing in Australia by the end of 2017.

Tom Bendistinto, Executive Director at TACT who have been advising Toyota on its transformation strategy, spoke with Dmitri at Toyota’s Port Melbourne headquarters about how the company is using technology to spearhead its future beyond manufacturing.

Dmitri Colebatch, former elite rower for Australia, joined Toyota nine years ago and has played a major role in helping the business prepare for life after car manufacturing in 2018.

A long history of innovation

Back in 1958, a sea container arrived in Sydney carrying 13 Land Cruisers destined for the Snowy Mountains. Australia had never before seen the likes of such a vehicle and it soon became the work-horse of the Snowy Scheme. Within a year, Land Cruisers were selling out at car dealerships. Within five years, Australia had launched the first successful Toyota manufacturing plant outside Japan.

Times may have changed, but Toyota’s determination to be a game-changer hasn’t.

 “Toyota Australia is transitioning from a manufacturing company to a sales and distribution company,” Dmitri explained. “This change in focus means our Information Systems Division (ISD) can no longer be back of house.”

“The franchise that is Toyota is one of the world’s most powerful brands and you don’t stay that way unless you continually challenge yourself.” – Dmitri Colebatch, Toyota Australia

Technology driving transformation

Toyota Australia is actively pursuing a technology strategy to drive its sales and marketing transformation, which Dmitri says will help it deliver the service levels required to maintain the competitive edge that has seen it notch up 13 straight years as Australia’s market leader.

He says ensuring the workforce have the right tools to do their jobs is integral to this. “In ISD, we provide toolsets to dealerships, corporate, guests (Toyota’s preferred term for customers) and everyone in between … It’s all about making sure the systems we provide are exceptional, which in turn enables exceptional service to Toyota’s guests.”

Toyota is no stranger to innovation, trail-blazing the continuous improvement revolution that has swept the industrialised world over the past ten years. Initiatives like Lean and Just in Time are commonly associated with the brand. Likewise, despite a dozen brands making hybrid cars, the only one people remember is the Toyota Prius.

“You can’t say hybrid without people thinking Prius, and that’s because we really revolutionised that (concept),” says Dmitri.

“Now we’re doing it again with our fuel cell car, the Mirai, which is a really exciting piece of technology. The upshot of this car is that it runs on Toyota’s fuel cell technology – it’s a completely different type of car. Unlike the Prius which runs on batteries, it has the advantage of being much lighter – and of course, it emits nothing but water.”

Toyota's Fuel Cell Vehicle, the Mirai, runs on hydrogen (water) and boasts zero carbon dioxide emissions. The company sees it as a game changer and hopes to make it available to Australian consumers in the next few years.

What next for Toyota?

The closure of manufacturing was a difficult decision for Toyota. The upside is that the company now has the opportunity to reflect on 50 successful years in Australia, and ask itself what it will do to become even more successful over the next 50 years.

One initiative is a program called ‘Franchise of the Future’ which looks at how dealerships operate internally and interact with their guests. Dmitri told us, “we expect people to feel like they are guests of our brand, not just someone we have a transaction with.”

Another priority is centralising the organisation, which currently has people spread across various locations in Melbourne and Sydney. This will reduce the travel burden for many staff, but the real gains will come in increased collaboration within the company; this in turn will facilitate better communication from the workforce about which technology is working for them – and importantly, which isn’t. “We want to know both sides of the equation,” Dmitri told us.

Dmitri said one of the biggest shifts currently in play was the repositioning of IT within the organisation. “We will be focusing less on manufacturing cars and more on distributing them. We (ISD) have already started attending the same training sessions as Toyota’s sales and marketing staff (and) established direct relationships with dealerships … to figure out how the technology plays out in all these business activities. It really needs to be a seamless union.”

We’ve written about success factors for business transformations – and the importance of communication – previously on the TACT blog, and Dmitri echoed some of those sentiments when he reflected on conversations he’s had with people throughout Toyota in the lead up to 2018.

“I’ve talked to a lot of the people whose roles are changing and there’s a lot of excitement (and) looking forward to their future roles. It’s more like ‘hold me back’ than ‘I’m not sure if I’m ready for that’,” he said.

“Due to Toyota’s focus on a respectful transition for affected staff, we’ve had a long lead-time to give people notice and everyone now knows what they’ll be doing in 2018. Let me tell you, they’re looking forward to it,” he added.

“Our work with TACT has helped us see another viewpoint on the pathway forward. By presenting us with a range of strategically-aligned options that challenge the way we've done things previously in our ERP area, TACT is playing a really helpful role in supporting ISD’s broader transition journey.” – Dmitri Colebatch, Toyota Australia

It will be compelling viewing to watch Toyota Australia reinvent itself once again and embark on a future beyond manufacturing.

Dmitri Colebatch (left) and Tom Bendistinto

Dmitri Colebatch (left) and Tom Bendistinto at Toyota Australia's HQ in Port Melbourne.

Toyota is a TACT customer working on new and innovative ways to transform their business technology needs. Tom Bendistinto is Executive Director at TACT, a Melbourne-based technology and business transformation consultancy formed in 2014. For more visit www.tactconsulting.com.au.

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