Moon Shot

An evolving and expanding Innovation Fair is helping to drive Toyota’s shift from incremental improvement to rapid iteration in the digital age

April 12, 2016

Super Heroes of Lunch -- Team members show off their "Meals on the Fly" app, one of the top entries in the 2014 Innovation Fair. The mobile phone software facilitates the ordering of food at the dining centers on the TMS headquarters campus in Torrance, Calif. 

This fall, when Toyota holds its 10th annual Innovation Fair, it will bear little resemblance to the event that started it all—a small gathering of Information Systems team members, tucked away in a back room of the data center on Toyota Motor Sales’ headquarters campus in Torrance.
In fact, this annual celebration of out-of-the-box thinking is no longer simply about IS or limited in scope to TMS. It now connects team members throughout North America and, increasingly, throughout the world. And with greater frequency, entries are progressing from concept to full implementation and making a real impact on the company’s bottom line.
How did this happen? More important, what are the forces that are driving the Innovation Fair to be more and do more?
Kaizen vs. Kaikaku
The back story can be found in a case study published recently by a team of researchers with the Center for Information Systems Research at the Massachusetts Institute of Technology’s Sloan School of Management. You’re welcome to click on the link and read this academic paper. But if you’d prefer the executive summary, much of the 13-page document can be encapsulated in two Japanese words: kaizen vs. kaikaku.
Both of these terms refer to a different approach to innovation. No doubt you’re familiar with kaizen. It’s about continuous improvement—the steady and persistent pursuit of incremental change that, over time, leads to tangible gains. But kaikaku is new to most of us. Kaikaku is about bringing forth rapid change through radical innovation.
Throughout most of its history, Toyota’s phenomenal success has been fueled by kaizen. But in the 21st century, the competitive landscape is being shaped and reshaped, seemingly overnight, by kaikaku. If the company is to continue to succeed, Toyota’s IS leaders concluded that the organization needs to also become adept at kaikaku. And for this more entrepreneurial culture to truly take hold, every team member—not just those in IS—should be encouraged to come along for the ride.

Innovation Fair Evolves
This transformation has begun to play itself out on many fronts. But the Innovation Fair, in its ever expanding form, is a core component.
“I think the Innovation Fair is critical,” says Steve Lurie, chief of staff in IT Management, in the MIT case study. “It is a great way for us to understand what new ideas people are thinking about. It is a great way to engage our team members. And it can lead to ideas that can be game changers in different ways.”
A quick review of the fair’s timeline backs up this claim:
2007 – Small gathering of IS team members at TMS gets the ball rolling
2008 – All IS team members at TMS are invited to participate
2009 – IS solicits TMS business unit managers to help judge entries
2010 – IS invites all TMS team members to attend the fair
2011 – Fair themes are linked directly to TMS business goals
2012 – IS invites five business units to submit entries
2014 – Fair adopts a “Future of Retail” theme
2014 – Toyota Motor Europe holds its first Innovation Fair
2015 – Fair expanded to include TEMA and TFS entries
2016 – First ever Global Innovation Fair celebrated at TMC event hosted by Akio Toyoda
A closer look at the 2015 event is even more revealing. It drew in excess of 1,100 attendees from TMS, TEMA and TFS. Combined, these three affiliates submitted 138 ideas. There were also 10 completed innovations called “showcase” entries, divvied up equally among TMS, TEMA and TFS—plus one entry from team members who work out of the Toyota Campus at Legacy temporary offices in Plano. So, in its own way, the Innovation Fair is also helping to usher in a unified One Toyota.
Concept to Reality
But that’s not all. Toyota is committed to not just challenging team members to come up with innovative ideas but to providing a framework where such breakthroughs can be made real. So while six entries last fall were designated as “winners” of specific categories like Dealer Innovation and Customer Innovation, a special Innovation Team has proactively followed up with all 138 teams that submitted an idea to the Innovation Fair. Several months later, they are continuing to explore ways to take these ideas to the next level.
Here’s one example of how this works: Two years ago, IS established the iCouncil—a group of volunteers, mainly at the management level, that helps teams develop their ideas. It’s a bit like the reality TV show “Shark Tank.” Teams are encouraged to present their ideas to the council which, in turn, assesses their viability and orchestrates the people, resources and funding to move them forward.
To learn about some of the other ways IS strives to leverage the Innovation Fair in this emerging era of kaikaku, click here.
Zack Hicks, North America chief information officer, emphasized this point in the MIT case study.
“The reason why the Innovation Fair is so important is because it’s the one time a year when I have all the business leaders looking at all the innovations,” says Hicks. “They have to pick the ones they like the best. And generally their question is, ‘Why aren’t we investing in all these things?’ And I say, ‘It’s up to you. Reach for your wallet.’”
“I don’t think there was a full understanding that we can do this, that we can make it happen,” he adds. “It is almost liberating to say, ‘The cool stuff that you guys want, you can have it all.’ It’s a true conversation changer.”
And, over time, that empowering mindset could well be a true company changer.
By Dan Miller

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