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5 big questions on innovation
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Barry Money, General Manager – Retail Development
Barry Money insists that the Japanese innovation concepts of kaizen and kaikaku represent the twin competitive engines for a cramped automotive market. With Toyota already hailed as a classic model of both disruptive and incremental innovation, Money says the most urgent challenge is to direct disruptive strategies toward creating lifelong customers, and to transforming the used vehicle market.
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How is your team changing the game within your industry sector?
Toyota has the largest number of units in operation in the Australian automotive market. We have more owners on the road than any other brand. Our strong dealer network services many of these customers. With innovative service, finance and repurchase products, we have the ability to move customers from their existing vehicle into a newer vehicle – which provides the customers with that Oh What A Feeling emotion as well as great value.
The specific innovation that my team has delivered is combining the best of our service and sales departments and assisting our customers to move from their current vehicle to a new vehicle. We call this sales and service collaboration. It’s been tried before in the market, but this time we have strong system support, combined with training, on site consulting, KPI management and follow up and most importantly segmentation and one-to-one marketing that tailors the offering to the needs of the customers.
What are some of the biggest impediments to innovation in your organization or industry sector?
The dealer network and the automotive franchises have a strong culture and process that has worked well for a long time. But with an increase in the competition in the market from new entrants such as newer manufacturers as well as newer technologies that facilitate the automotive buying process, plus the threat of policy changes by government, it is important that the industry continues to adapt and change in a dynamically changing economy and market. Therefore, the biggest issue is creating an innovative and dynamic culture that looks to new ideas, new ways, new opportunities and challenges the status quo head on. Risk is part of business and understanding and managing that risk is important. But progress in the face of risk is mandatory. Standing still is not an option.
How has innovation become engrained in your organization’s culture, and how is it being optimized?
Toyota is synonymous with kaizen – continuous improvement. After ten years in Japan, I saw with my own eyes the lengths to which Toyota goes in order to create even better products and services. I was captured as a young executive by the passion and intelligence of my kaizen mentors and I have tried to bring that to the Australian market.
Toyota practices kaizen in every thing it does. However, sometimes, incremental improvements are not enough – that is when “kaikaku” or revolutionary innovation is required. As part of the Retail Development team at Toyota, we are trying new technologies and processes in order to transform the way we do business with our dealers and more importantly how we engage with and satisfy our customers.
What technologies, business models, and trends will drive the biggest changes in your industry over the next two years?
Consumers shop across brands and industries. They expect to be able to experience the same levels of excellence in any category – they carry their expectations horizontally across different industries. This expectation has been facilitated through the internet.
As the new vehicle market has plateau’d, the franchises will be looking to capitalize on their existing owners, the loyalty from these owners and products and services that optimize the customer experience for this segment of the franchise’s market.
Can you share a specific innovation strategy you’ve recently encountered which you find compelling?
Recently we have undertaken a study of various technology-based products in the market that would be useful for our dealer network. WIFI based customer tracking and profiling, sales process support technologies, MAC address tracking on handheld devices among others.
While each technology has great merit in the right context, the key is not in the technology. It is in the connection to the consumer on a one-to-one basis. Technology that can support and facilitate that type of tailored connection with our customers is the next step for automotive franchises, in my opinion.