I asked Toyota USA President Yuki Togo, “Why me? Why was I selected to start Lexus?”
He told me there were two reasons. First, several managers in the company had national market representation experience, but I was the only manager in the entire company who had both market rep experience and national customer relations experience. Both were needed. The market rep experience would be needed to set up the best dealer body while the national customer relations manager experience would be needed to understand how to compete with the Europeans in the luxury market. Lexus would need to set a new standard for customer satisfaction.
Market studies had to be done immediately in all the major markets across the entire country to establish where the first 100 dealers would be placed and how many total dealers we would need. Those dealers had to be selected no later than the spring of 1988 in order to purchase land and build new facilities by the fall of 1989. A new dealer agreement would need to be developed separate from Toyota. Guidelines for new facilities and signage would need to be made. Working capital and pro-forma balance sheets would need to be instituted to find a way for dealers to be profitable with a new facility, no service or parts business, and only one new car to sell.
Because of the secrecy surrounding the project, no dealer would even see the Lexus car until the fall of 1988. This meant the dealer would be making a $3-5 million commitment for land and facilities without knowing what the car would look like. In addition, a business plan needed to be created to show the dealers how to get a reasonable return on their investment in Lexus.
Chairman E. Toyoda, President Dr. S. Toyoda, and senior management realized that the new luxury channel must have something beside the “finest car ever built” to compete with Mercedes-Benz , BMW, and the other European luxury brands. That something else that was to set Lexus apart would be customer satisfaction. We set out to select the best dealers in customer satisfaction in each market even if they weren’t Toyota dealers. We were also charged with developing customer satisfaction processes and guidelines for sales and service that would set a new standard for customer care in the industry, ensuring each customer was treated with the utmost respect.
Plus, an internal business plan needed to be developed, showing a profit in five years. An entire division of people needed to be hired and a field force located; an advertising company selected; a distribution network put in place; ports of entry chosen; car carriers contracted to deliver the cars to the dealers; data systems developed; a public relations staff hired and communication plans to magazines and the news media orchestrated; auto show displays designed and approved; and service and sales training developed and delivered for all dealership personnel. On the other side of the ocean the challenge was equally difficult because the all-new Lexus would need to be designed, approved, production-engineered, tested, produced, and delivered to the United States. All of these actions in Japan and the United States would need to come together at the same time by the fall of 1989. It seemed impossible.
I knew there was a reason that God had placed me on the Lexus team—and I knew He would guide me through this leadership opportunity if I relied on Him. His plan was better than I could have imagined. Read more about God’s plan and His guidance in the God of Hope book.
“Nothing, you see, is impossible with God.” Luke 1:37 (MSG)
The second reason I was given the job is because Dr. Toyoda approved. My mind took me back to the fall of 1986 while I was still in the Cincinnati region. McCurry had called to tell me Dr. Toyoda was coming to inspect the new plant site in Georgetown, Kentucky. His wife and Mrs. Togo were accompanying him; they were going to spend a day in Cincinnati.
I was confused. “A day in Cincinnati?” I asked. “Why is Dr. Toyoda coming to a regional office?”
“Never mind,” McCurry barked. His parting words to me were, “Don’t screw this up!”
(To be continued next Monday in “You Don’t Smile Enough”)