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 / Summer 2007 / Issue 47(originally published by Booz & Company)


Innovation Agility

By investing the shusa with these multiple roles, Toyota gives that person the authority to quickly and effectively make the necessary trade-offs between technical and cost requirements for the benefit of the program. But this shusa-style authority can be vested only in someone with the technical skills, business acumen, and managerial experience to warrant it. And developing such skills takes time: At Toyota, becoming a shusa is a 20-year process in which promising engineers, with a good 10 years of experience in a particular functional area, are promoted to assistant chief engineers, where they need another 10 years of seasoning before being promoted to shusa.

Is it appropriate for other companies to develop a shusa-style chief engineer? We believe it is, but not in a vacuum. First, establish for each significant launch a single person with authority over and accountability for engineering-related decisions. This should be the most qualified person available — someone with top engineering skills, business experience, and management clout. Then look freshly at the career paths of engineers throughout your company. Like Toyota engineers, for example, perhaps they should begin their careers by developing deep technical expertise in a particular discipline. They may also need to spend time working with marketing teams, deepening their understanding of customers. As they move up the hierarchy, they would assume broader responsibilities within vehicle programs while still representing a specific function. And in doing so, they can serve as mentors for junior engineers, transferring both their explicit skills and their tacit knowledge.

You may choose to emulate Toyota’s approach to shusa candidates; top engineers shift into product planning and project management, where five years or more is spent learning how to lead vehicle programs. This period is intense: The candidate must master technical competencies in areas beyond his or her functional specialty, while developing the ability to make complex technical decisions as a vehicle development leader and to supervise an organization made up of several hundred program engineers.

Having rethought future career paths, examine the promising engineers in your current operation. What gaps exist in their backgrounds, including gaps in customer, operations, or financial knowledge? How can you use cross-platform training and mentoring to fill those gaps? What incentives can you put in place to help each candidate develop more in-depth capability? Can you use resources outside the company, including rotation through jobs at other companies or in university programs? How can you build the kind of trust and investment that leads your most effective staff to commit their future to the company?

Leveraging Function–Product Tension
A typical product development program must balance an implicit tension in the organizational structure. On the one hand is the goal of making everything different: distinguishing product features to give them market appeal. On the other hand is pressure to make everything the same: to scale production and reduce costs. At most companies, this tension manifests itself as conflict between the overall product development leaders, who champion differentiation to target their markets more precisely, and the functional leaders, who support many different products and seek as much commonality across them as possible.

Rather than try to resolve, or deny, that tension, you can leverage it for more effective product development. At Toyota, the functional areas are led by buchos, who occupy the same level in the management hierarchy as the shusas. Buchos are evaluated not just on their ability to run their functions efficiently, but also on the ultimate success of the development programs they participate in, so it’s in their interest to cooperate closely and productively with the shusas.

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  1. Matthew A. Clark, editor, Mastering the Innovation Challenge: Unleashing Growth and Creating Competitive Advantage (s+b Books, 2006): An omnibus of approaches for improving and expanding a product development or R&D core function.
  2. Jon Gertner, “From 0 to 60 to World Domination,” New York Times Magazine, February 18, 2007: Incisive introduction to Toyota’s unique culture and its view of the future, particularly with hybrids.
  3. Barry Jaruzelski, Kevin Dehoff, and Rakesh Bordia, “Smart Spenders: The Global Innovation 1000,” s+b, Winter 2006: What Toyota has in common with Christian Dior (plus Apple, Adidas, Petrobras, Samsung, Google, and 87 other high-leverage innovators). Click here.
  4. H. Thomas Johnson and Anders Broms, Profit Beyond Measure: Extraordinary Results Through Attention to Work and People (Free Press, 2000): Based on methods developed at Toyota and Scania, this book describes how to substitute ingrained awareness for rote metrics.
  5. Matthew May, The Elegant Solution: Toyota’s Formula for Mastering Innovation (Free Press, 2006): Inside look at the creative process that implements 1 million ideas each year.
  6. James M. Morgan and Jeffrey K. Liker, The Toyota Product Development System: Integrating People, Process and Technology (Productivity Press, 2006): For engineers; dense and detailed.
  7. Taiichi Ohno, Toyota Production System: Beyond Large-Scale Production (Productivity Press, 1988): Shusa-style wisdom from one of the originators of the Toyota production system.
  8. For more articles on innovation, sign up for s+b’s RSS feed. Click here.
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