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Principle 5: Create a Chief Engineer System to Lead Development from Start to Finish

“We can be successful at Toyota only when we do something better than our competitors or when we surpass the average for the industry. If we are designing a new product, and know there is no room for failure, our attitude certainly must not be just to aim for the average. If we do that, we will surely fail. We must do our all-out best at such times, and allow ourselves no thought of failure.”
Kenya Nakamura, first chief engineer of Toyota Crown

The Cultural Icon Behind the CE System

The responsibilities of the Chief Engineer (CE) and his/her small staff:

  • voice of the customer
  • customer-defined value
  • product concept
  • program objectives
  • vehicle-level architecture
  • vehicle-level performance
  • vehicle-level characteristics
  • vehicle-level objectives
  • vision for all functional program teams
  • value targets
  • product planning
  • performance targets
  • project timing

The CE ultimate responsibility is delivering value to the customer. While Toyota always emphasizes teamwork, there is always one person who is accountable for the success of the team. For product development, this person is the CE.

Below are some of the characteristics of the CE that Toyota has come to value in its CEs, many of which underscore the importance of balancing engineering skills with a broad and rounded approach to leadership:

  • A visceral feel for what customers want
  • Exceptional engineering skills
  • Intuitive yet grounded in facts
  • Innovative yet skeptical of unproven technology
  • Visionary yet practical
  • A hard-driving teacher, motivator, and disciplinarian, yet a patient listener
  • A no-compromise attitude to achieving breakthrough targets
  • An exceptional communicator
  • Always ready to get his or her hands dirty

It takes years grooming a CE with the careful selection of a super engineering and leader. The CE role is high profile; it is a role the entire organization must recognize and respond to. In a sense, this person functions outside the company bureaucracy and standard operating procedures and has the latitude to do what is necessary to get the job done. As project manager, the CE does not simply coordinate schedules or fine tune technical details – the CE owns the car, from concept to styling, to prototype, to launch. Often, a CE will stay with the same product over multiple of generations.

The CE Leadership Model

There is a marked difference between how a traditional chief engineer leadership role and a lean, CE type of leadership role handles the responsibility of coordinating a group of people so that their activities align to complete a project.


  1. Bureaucratic Manager: This manager coordinates people top down and does not draw on his or her own engineering expertise, relying instead on standards and target schedules and task delegation. This type of leader follows the engineering standards and rules, meets deadlines and rules by Gantt chart and budget, and compels projects efficiently. Undoubtedly, to rise to the leadership position, this individual must have had strong engineering skills at some point; in the managerial position; however, he or she employs these skills only minimally. The person can bring in a project on time and on budget but is unlikely to be a treat engineer. He has become a project manager, not an engineer or leader.
  2. System Designer: This engineering manager has exceptional technical skills and is passionate about making the product fit a vision of technical excellence, with parts of the system working together to achieve the design objectives. This type of leader is a creative thinker and excellent systems engineer, however, he or she is not terribly skilled at managing people or having the patience to coordinate, teach, or listen to them. This manager has a top-down style for making key technical decisions and uses subordinates to do the detailed, routine work. There are limits to the flexibility of the project because many people are doing the detailed work, all orchestrated from the top, and this works only if everyone is following clearly specified instructions. Changes will reverberate through the organization, and the teams are incapable of thinking for themselves without direction from the top.
  3. Group Facilitator: This engineering manager is a people person who has developed leadership skills and is able to take a group of individuals and facilitate their working together as a team. This type of leader is not necessarily a great engineer and may even find detailed technical work boring. Instead, he or she likes to communicate, facilitate, and be a catalyst that moves a talented group of technical professionals toward a common goal. This manager is a flexible thinker and the group can work autonomously to organize and reorganize itself. The weakness in this approach is the lack of a strong technical vision from the top. This can lead to engineering details falling through the cracks, which can cause time lines to extend outward and weaken technical integration.
  4. System Integrator: A system integrator is strong technically and uses a bottom-up process to bring out t he best ideas from team members. This type of leader has a strong vision for the product and orchestrates the technical integration of the project; he or she also facilitates a dynamic team process with a great deal of flexibility. Toyota CEs best fit this model.

Toyota CE System: Avoiding Compromises that Lead to Bureaucracy

Toyota seems to be able to break time-honored organizational principles and avoid compromises. Through the CE system, the company has reaped benefits that derive from its cross-functional product-focused organization, which is peopled by functional experts. It also benefits from top-down management that meets strict timelines and targets and from the flexibility and creativity of bottom-up style management.

The system works because Toyota has a culture focused on the customer, and functional engineering groups recognize that they exist to support Toyota’s customers and that the CE is the voice of the customer.

Key decisions, mentoring, lobbying for resources, building a shared vision, pushing the product to higher levels, and achieving quality, safety, cost, and timing targets all start with the chief engineer.


In Summary:

Develop a chief engineer system to lead the development from start to finish

The LPDS is led by an exceptional Chief Engineer (CE) with the skills to lead system integration, both in the product and integrating the people working on the program. The CE is different from the traditional project manager in several respects.
First, the CE does not manage the engineers working on the project, with the exception of a small group of assistants. The CE elads through personal influence, technical know how, and authority over product decisions.
Second, the CE represents the voice of the customer and is responsible for the success of the vehicle program from concept to sales.
Third, the CE focuses more attention on decisions about systems integration than on personnel decisions and project administration. If a CE is acting only as a project manager, then your company does not really have a CE role.


Source: Liker, J.K and Morgan, J.M, The Toyota Product Development System: Integrating People, Process and Technology, Productivity Press, 2006


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