As we walked pass Yasukuni Jinggu from Kudanshita station along Yasukuni dori, we arrived at Toyota Kudan Building which is a building consist of various Toyota subsidiaries. A group of students met together in the lobby who are selected to participate in this interview session. We were welcomed by Scott with a Tesla Motor coffee mug in his hand; we started our chat from the topic on the collaborations between Toyota and Tesla in an electric car project.
Scott Haddad graduated from Booth School of Business, The University of Chicago. He first worked for Boston Redevelopment Authority to study the economic impact analysis of urban development. He then joined Toyota in California and worked for 15 years in Pricing, Sales Planning and Product Planning. In 2012, he became the Manager of Mirai Project Department for Toyota, Japan to develop future mobility concepts based on global social trends. Scott is current work as an economist in Institute of International Economics Studies researching global economic, political and social issues which would be relevant for Toyota Motor Corporation and its affiliates companies.
Scott: I’m originally from Boston. After going to school in New England for undergraduate I worked in urban planning as an economic analyst for a few years, and then I went to for MBA in Chicago. Then I moved to California to work for Toyota. I started in the Pricing dept. and also spent time in our San Francisco regional office and in Product Planning before coming to Tokyo in 2012. In Japan I worked on future concept planning, and then took a more general economic research role for the IIES subsidiary, which is a kind of a ‘think tank’.
Student: I would like to ask you how economics could be used in actual company work based on your own experience.
Scott: When I think about economics, I actually see it in all the choices that people make every day – it’s not just about money but all the things people value. Companies are actually collections of people, so individual economic behaviors have an important role in decision-making processes. I think my specialization in economics has supported me essentially across my entire career.
When I first started my career in Boston for a city planning agency, we were basically trying to explain to the voters, why the policy of the local government is good for the economy and provides jobs for local voters.
When people saw the construction projects which are so expensive, we have to explain: the project needs a lot of workers, and these workers get paid, and these workers will bring the money to buy things your shops and so on. I found economics really useful.
And in Toyota, this economics approach also is useful. Thinking about how to make a car that people will buy: the buyer always wants the lowest price possible with the best quality. And the seller wants the highest price possible. And the people who are designing the cars, they want the most beautiful things but don’t know so well how easy it will be to build. The people in the factory care about how to build things efficiently and most reliably, and maybe it’s very expensive to build a particularly beautiful design. And so you have to find the balance among these priorities and values. It’s quite common in economic thinking. So I found that economics is very helpful.
Student: Can you talk about some things in Mirai Project?
Scott: Sure. Mirai, in the Japanese language means the future. And so, the Mirai department here in Tokyo, is a small group that works on future concepts that may or may not be directly related to cars.
[editors note: This Mirai dept. is unrelated to the recently announced Toyota Mirai fuel-cell vehicle]
Student: In your current research work, is it you who starts a job or it is actually Toyota who asks you to start work on a particular research project.
Scott: It’s both from what I see. The top executives ask us to study issues that will affect the future business environment. We have to tackle the questions they identify, and at the same time we have to think about what other questions should be asked. And we’re trying to expand on each other’s work to leverage the various individual study methods.
Student: What kind of people are working here? Are there many foreigners?
Scott: Actually I’m the only non-Japanese who works here currently. Most of the people here are quite highly experienced. Meaning, they had long careers at Toyota before joining here. This is a think tank, so we have experts for different regions of the world. I’m very happy to work here with so many smart people.
Student: Can I further ask how this think tank institute is related to Toyota? What kinds of things are not covered?
Scott: Currently we’re serving the whole Toyota group. We don’t really focus on specific product strategies in this Institute. What we do is focus on the overall business operating environment and trends in different parts of the worlds.
Personally, my current research focus is the sharing economy, like car sharing, crowdsourcing, crowdfunding, etc. I am studying about how these new activities impact the economy and things like entrepreneurial activity, which in turn impacts how people use mobility in society.
Student: What are the concrete services or product that are done in this Institute?
Scott: Like most think tanks, we publish research papers and we explain our findings to our clients.
Student: So how do you deal with the culture shock?, especially when you communicate with the local people, it’s difficult and challenging right? Sometimes you could be misunderstood
Scott: I’ve been working for a Japanese company in the US for many years. And I think that if you have some experience in working with people from different cultures, it’s not as big a shock.
I would imagine all of you, having some fairly significant international experience already, would find that your cultural shock is not going to be so huge.
Also, Toyota is a relatively international company. It does have an interesting and very strong culture – Toyota is famous for the ‘Toyota Way’, and it can be quite strict in some ways.
In terms of general cultural difference, one example might be that in Japan I have noticed a common compliment given by Japanese managers about somebody is ‘they are reliable’. For Americans, reliability is also important, but a first compliment would more often be something like ‘self-starter’ or ‘shows initiative’. So it’s important to be aware of the different cultural priorities.
Student: Interesting to know that. I have a very basic question. Is it difficult to blend in here?
Scott: Not in my case. If I were working in the factory, it probably would be a different story. And Toyota is a global company; a car can’t be ‘translated’, it has to be built specifically for each market. For example, our minivan chief engineer and his team lived in the U.S. for months driving around with American families, to understand what the local customer needs are. And then when they come back to Japan, they tell their colleagues who haven’t been to the U.S. One of the strong parts of Toyota culture is this, 「Genchi genbutsu (現地見物)」which is ‘go and see’. It really helps to understand how local customers actually use the products, and it kind of goes all the way back to our company’s founding when Kiichiro Toyoda had this rule. If there’s a problem, go out and talk to them, face-to-face’.
Student: As you mentioned, a lot of the staff in this Institute are experienced. Is there any chance for a fresh graduate to enter the company here?
Scott : Probably not. Well, I think it’s better to have some working experience first, so you can understand the client’s needs well.
Student : I have a question about career growth prospects. So, how will the career growth be here, like although you are inexperienced, do you still have room for growth?
Scott : In general in Toyota, you will go through various divisions in your career– mostly in Toyota City but there are some departments here in Tokyo and sometimes people go overseas as well. Typically I think you would be in an engineering track, or a manufacturing track or a sales and marketing track, and then after you’ve completed some assignments in maybe a couple of those tracks you would be considered for promotion. There are also the supporting business functions like finance. After you’ve gained some of that kind of understanding of the business you might move to a strategy group. Typically, a strategy group is not where you start.
The system in Japan is different from the US. In the U.S. every time somebody wants to move, we have to apply for an open job; somebody has to leave and then somebody has to apply for that job. Occasionally there are big restructurings, but not that often. Japan, I think, actually does a great job of rotating people around to get experience. Also I think that a lot of U.S. companies have more flat organizational structures.
Student : I want to know what it is like working for an American company, in Japan.
Scott : I have several friends who work for some American companies here in Japan. Most overseas branch offices are obviously going to be a bit smaller. But global companies like Toyota and the American companies here have some similarities in that they both consider global issues.
One of the nice things working in a Japanese company in Japan is that I get to look at global issues. When I was in the U.S., I was generally only looking at U.S. issues. And probably if you are working for an American company in Japan you would be only looking at Japanese issues, I would guess. If you work for the headquarters, wherever that headquarters is, you may get to look at global issues, which I think can be very interesting.
Student : But if I look at the company website, Toyota in America and Toyota in Japan; they have to be the same but because the working culture of the locals are different, so is there any difference on company management? Or the working culture?
Scott : One of the great things about Toyota in both Japan and America is that they focus on the long-term sustainability of the company. The company is taking care of all our stakeholders, the customers, employees, and the community. Often companies or shareholders are shorter term focused. Fortunately, Toyota’s investors seem to be a little bit more sustainability and long-term focused.
Student : So you aim for like market share, which is basically sort of long term?
Scott : Some companies try to pull forward revenue as much as possible, or pull forward profits as soon as possible. There’s none of that at all. We’re not out to quickly grab market share either. It’s a sustainable growth path. I think that one of the things I really like about this company is the sustainability; I also feel like we really have a chance to support our communities – like you guys!
Student : What do you think about starting your own business? Do you think there are a lot of opportunities compared to working for big companies?
Scott : I advise you not to be afraid to try to make your own opportunities as well. I agree that you may feel nervous about trying to do something yourself. But when you think about it, the cost of failure at your age is relatively low. If I try to do something high risk – I have two young kids, and they’re hungry! And if I fail, it is a lot of risk. So right now you have this kind of unique opportunity in your lives, where you don’t have people relying on you, to just try something.
If you would like to have more a sustainable position as a ‘salary man’ type position, then you should focus on the salary man track. But if not, then, try something yourself and see if you can do something.
Student : What do you think about the key for the success of the business?
Scott: Well, I am not sure if this will answer your question, but the world changes every day and companies that try to preserve the past succeed for a while, but eventually are going to fail. So I think that we try to stay ahead of the curve, and people want what people want. If we can continue to be ahead of what they want and be the people making what they want, then we will succeed.