The origins of the Chief Engineer role at Toyota is a fascinating story, and its understanding has the potential to spark a digital product revolution. And this story starts with the US quality movement, the conditions of post-war Japan, and the inception of the Toyota Production System.

The Toyota Production System

In 1927, a young Edward Deming was studying the works of Bell Labs’ Walter Shewhart on the application of statistical techniques to manufacturing processes for his PhD at Yale University. In the following years, his theories failed to find a strong footing in the United States where Taylor’s management principles remained prevalent. Taylorism emphasized the use of scientific methods to increase productivity, often through time and motion studies that sought to identify the most efficient way of performing a task. Deming, in contrast, believed that productivity could be improved through a focus on quality, continuous improvement, and collaboration between management and workers. In 1947, the U.S. government sent Edward Deming and other consultants to Japan to help with the economic effort. He became very influential with Japanese engineers and began to experiment with various companies. Japanese companies faced unprecedented challenges and had limited funds and space (only a small percentage of Japan’s land is suitable for urban and industrial development).

Sakichi Toyoda grew up in a Japanese farming community. A tinkerer and inventor, he designed and built a highly efficient manual loom made of wood at the age of 27. He went on to develop a steam-powered loom with a special innovation: a mechanism to stop the loom when a thread broke. It is amusing to note that, even though looms seem ancient to us today, they are one of the earliest examples of machines that could perform complex tasks automatically and could be programmed, much like a computer. Toyoda was obsessed with continuous improvement, inspired by Samuel Smiles’ book “Self-Help”, a bestseller of the early 20th century. This spirit of innovation, pragmatism, continuous improvement, and humanism have been at the root of Toyoda’s management principles when he started Toyoda Loom Work in 1926. As Sakichi Toyoda became one of the most famous Japanese inventors, he was aware the looms would soon become yesterday’s technology. He tasked his son Kiichiro to start their car business. At the Toyota Motor Company, the core philosophy of its founder, the dire economic needs of post-war Japan, key basis innovations (the intelligent automation of Sakichi Toyoda and Just-In-Time manufacturing, inspired by the intense study of the Ford production system and the U.S. supermarket system), and the continuous improvement system of Edward Deming married together and created something entirely new. The artisan of this was Taiichi Ohno, who created the revolutionary Kanban System, later renamed Toyota Production System (TPS).

Toyota went from a mediocre small-scale company in the 1930s to the global giant that we know today thanks to TPS. As it grew, Toyota forged hundreds of key partnerships and trained its partners, including competitors such as General Motors (with the famous example of the Nummi plant) or PSA, to its Toyota Production System. Their strategy has been largely studied and replicated outside the automotive industry, and took the name “lean”.

From designing aircrafts to designing cars

Even as Toyota openly shared its manufacturing techniques and processes, its competitors managed to match, and sometimes outperform, their quality levels. Still, Toyota remains to this day an undisputed leader in their industries. So why is that? Their real secret, it turns out, had stayed hidden all this time. A second marriage was taking place at the time of the TPS’s inception. A marriage of the strong spirit of innovation of the aircraft history, and Toyota’s obsession with earning customers’ smiles. At the same time Taiichi Ohno was building the TPS, the company needed product designers.

Let’s go back in time again for a second. From 1868 to the end of the war, Japan’s economic efforts focused on national security. Japanese companies managed to innovate with fewer financial investments, compared to the West. This would stay a marker of Japan’s future technological innovations. The Tachikawa Aircraft Company was known for its innovative and unconventional designs, which set it apart from other aircraft manufacturers of its time. In August 1945, Japan surrendered to the Allies of World War II. This marked a sudden shift in how Japan viewed technological innovation and a sudden end to the Tachikawa Aircraft Company. As the country was occupied by the U.S., Japan's economic planners decided to promote the development of business technology and infrastructure instead of national security. The former aircraft designers from the Tachikawa Aircraft Company were now needed to rebuild the decimated Japanese society, industry, and economy.

It turned to the Tachikawa Aircraft Company’s former aircraft designers–called Shusa. This should surprise no one, as similarities between military aircrafts and cars are numerous. The Tachikawa Aircraft Company’s engineers were also trained in the U.S. and inherited the Wright’s Browsers inventions and spirit of adventure. The first Toyota Shusa was involved in developing the Crown, Toyota’s first public car. They brought with them their philosophy and product management methods. Progressively, the Shusa role was renamed to Chief Engineer.

Chief Engineers from the 1950s through 21st Century

It’s unclear exactly how Toyota has developed Chief Engineers since the role came to be, but we can get a glimpse through former Chief Engineers’ testimonies and information from Toyota insiders. First, a Chief Engineer is the “CEO” of a car, responsible for its profits and losses from the car’s inception to years after its release. Contrary to a company CEO, however, they have no hierarchical links with the rest of the company—they have to develop a product through the sheer force of their leadership. It makes sense then to know that Toyota considers that it takes 10 to 20 years to develop their employee into Chief Engineers. We discuss the qualities of a good Chief Engineer extensively in Chapter 7 of Build to Sell, and there is strong evidence that Toyota selects candidates based on them too. Candidate Chief Engineers have shown extraordinary leadership in their area of expertise, and they can come from anywhere in the company.

Extraordinary leadership is not always sufficient. Toyota will spend significant time training candidate Chief Engineers, both through an extensive training plan, and by increasing the product area of the candidates. They will serve as assistants to a Chief Engineer, and be responsible for an area of the car, such as the engine or the seats. Translated to tech companies, this would be the equivalent of a Product Owner or Product Manager being responsible for the ecommerce part of a service, or a complex subsystem such as an AI component. Toyota Chief Engineers “sign” their cars and the fact that they are given full autonomy over a car’s design really shows. Just watch how Chief Engineers Chika Kako and Daizo Kameyama describe the concept for their respective cars:

In a fierce and complex-engineering market, where their product system has been shared, studied, and copied (successfully!), Toyota has remained the first car seller throughout the years. Their model of Chief Engineers is one of the key difference, and Toyota’s superior product design capacity is their best-kept secret. Much like lean sparked a manufacturing revolution and inspired the agile and DevOps revolutions, we posit that taking inspiration from Toyota’s product design can spark a revolution in how we build digital products and services.

You can read more in Build to Sell (or if you came here through our link inside the book, welcome and thank you so much for reading us!).