Toyota, How to Start the Creative Engine
“We needed to look at every process, procedure, and product that we had – actually our total business model. To get our profits up sustainably, we needed to turn TFS upside down and transform”
How can we find out-of-the-box business ideas to find new business model options?
Design your offsite with tools so your team can co-create and find crazy ideas.
CEO George Borst didn’t want to sit around and watch Toyota Financial Services’ (TFS) profits dwindle. “I realized we needed a motivating rally cry,” says Borst. “We needed to look at every process, procedure, and product that we had – actually our total business model. To get our profits up sustainably, we needed to turn TFS upside down and transform”—or risk getting left behind.
Strategic Conversation Session with 55 Top Leaders
Borst gave Ann Bybee, TFS’s Vice President of Strategic Planning, the mandate to design a two-and-a-half-day strategic conversation for 55 of the company’s top leaders from across business units, functions, and geographical regions. Both Borst and Bybee set the bar high. They wanted the session to be collaborative and engaging but also be grounded in present business realities—to identify cost-cutting options while inspiring disruptive new business ideas. Ultimately, the session needed to produce credible options that TFS could immediately start developing—not just a list of cool ideas. “I didn’t want us to stay at the 30,000-foot level,” says Borst. “We needed to come up with options and leave with a clear sense of how we could take them forward.”
How we helped
To add structure and external perspective to their discussions, Bybee brought in innovation strategist Lisa Kay Solomon and Patrick van der Pijl, CEO of Business Models Inc. and producer of the book Business Model Generation. Patrick opened the session by asking participants to describe the present-day TFS using the Business Model Canvas. Despite a few skeptics (“We already know our business”), the conversation surfaced a surprising diversity of assumptions among participants on these important issues.
“It was powerful for everyone to hear how many different opinions were out there on fundamental issues, such as who our customer is,” recalls Julia Wada, group vice president of HR and technology. “This openness allowed us to have deeper conversations about who we were and where we wanted to go.”
Incremental vs disruptive ideas
Two weeks before the session, Ann and Patrick had asked participants to submit ideas for how TFS might take its business forward. Now, during the session, they posted about 60 of these ideas up on a board, sorted under three headings: incremental growth opportunities, immediate cost-cutting opportunities, and bold disruptive ideas. Participants were disappointed to see that nearly 80 percent of their ideas fit into the first two categories. At this point in the process, they were much more primed to think disruptively: What could really turn their business on its head, in a good way? Ultimately, the group came up with four potential options for TFS to pursue. One—refining its insurance offering—was incremental. But three were revolutionary: What if TFS became the financial brand of choice for consumers? What if TFS cut its costs in half? What if TFS surprised its dealers with totally new products and services?
Sketching and Storytelling
Working in small groups, participants mapped a detailed business model for each of these four directions. They plunged in, debating each component and sketching out their ideas. Then, rather than pass the results around the room, each group dramatized its findings, “narrating” its business model for the other participants by playing the roles of consumers, dealers, and employees in that new business. This activity transformed what could have been abstract ideas into concrete options supported by human stories of pain and gain. After each story, Patrick asked the participants two questions: What did you love about it? And why might it never work? The groups then recombined to explore each option in more detail. They also plotted them against TFS’s existing business model and identified the assumptions and constraints underlying each possibility. What would have to be true for each strategic direction to be successful? What would TFS have to stop doing?
Making Ideas Concrete
This method for exploring new choices was unlike anything this executive group had experienced before. “People got excited and played off one another’s ideas,” says Chris Ballinger, TFS’s chief financial officer. “A lot of good ideas get tossed around during these offsites, and you’re not always sure they’ll get picked up later,” Ballinger adds. “This time, we made the ideas concrete before we left and knew how we were going to take them forward. We had no shortage of volunteers who wanted to work on it in some way. I’ve never had that happen before.”
What were the results?
In the case of the TFS session, there are at least three specific factors that made it a success.
First, TFS’s approach required participants to work with whole options. Too often, organizations discuss and debate half-baked ideas. At the TFS session, the nine-part canvas template enabled participants to develop all the important aspects of the business model options they were considering in a systematic way.
Second, TFS’s approach focused the discussion on key assumptions rather than personal positions. This approach gets participants into problem-solving rather than advocacy mode. It asks them to identify and work through the most important assumptions behind each option.
Finally, TFS’s approach rendered the options in a tangible and accessible visual form—the Business Model Canvas—that invited participants to engage with them actively.
Toyota’s Opinion of the Session
After the session, George Borst, informed us that he was extremely pleased with the outcomes. “So many times organizations go to the outside to develop and refine their strategic plans when the answers lie internally. Patrick van der Pijl and Lisa Kay Solomon – with their tools and company – give you a roadmap to unlock solutions that are literally in the room. They provide powerful examples and a step-by-step guide to creating intense engagement and encourages diverse and unique points of view. This leads to a powerful shared Vision and Strategic Plan coupled with a pragmatic Execution Plan. And, as a bonus, it is a great bonding experience for all involved.”
This case study is published in the book ‘Moments of Impact: How to Design Strategic Conversations That Accelerate Change’, by Chris Ertel and Lisa Kay Solomon (2014), ‘Design a Better Business, New Tools, Skills and Mindset for Strategy & Innovation’ by Patrick van der Pijl, Lisa Kay Solomon and Justin Lokitz (2016), Strategyzer blog by Alexander Osterwalder.