Collision Course

Toyota Creates the Ultimate SneakerNet

The four members of the electronic-commerce strategy team at Toyota Motor Sales USA Inc. don't mind being a hub of activity. Their shared office, on the first floor of Toyota's IT building in Torrance, California (headquarters of the Japanese company's U.S. sales and marketing arm), has windows on three sides. Colleagues heading to or from the parking lot knock on the glass and wave hello; engineers visiting from Japan pop their heads into "the Lab" to see what the team is working on; executives from Toyota divisions around the world stop by to surf the Web on a giant, 50-inch Sony plasma screen. The only part of the IT building that could rival the Lab for popularity is the corner that houses the soda and candy machines -- but you can't become entranced by techno music there.

Peter Dames, the 32-year-old leader of the e-commerce team at Toyota Motor Sales and a 9-year veteran of the company, is like a Zen mutineer. His head is shaved and slightly stubbly. His eyes are intense. And he doesn't waste words. Despite the unwritten shirt-and-tie dress code on the Toyota campus, those on Dames's team wear jeans and suede sneakers. He swapped the team's old plasma screen for the prime office space -- even though they didn't own it (it was on loan from Sony, as is the new one). Without asking permission from anyone, team members designed their own business cards, which are much edgier than the standard-issue red, black, and white Toyota cards. On the back, they sport slogans like "better to shoot yourself in the foot, than have a competitor shoot you in the head."

There's a reason Dames wants his team's rebelliousness to be visible within Toyota: His top priority is to show the rest of the organization that the Internet economy doesn't favor companies that revere tradition, adhere to familiar processes, and play by decades-old rules. That's a tall order at the proud and history-rich Toyota, founded in 1918 -- even more so because the company, which earns $100 billion in annual revenues, is already comfortably profitable. "Every month is a new record in sales," says Dames. "We can't build enough cars. So one of our biggest challenges is to create a sense of urgency around e-commerce."

What's a bit strange about the existence of Toyota's electronic-commerce strategy team is that no one can remember who gave it permission to exist. Certainly, no one granted it any formal authority or influence over Toyota's Internet strategy. Yet Dames's crew has been instrumental in setting the direction for the parent company -- globally and for the U.S. marketing arm, which accounts for about a third of global sales, as well as for operations in other countries where Toyota sells cars and trucks. The team practices intellectual "viral marketing": promoting the spread of ideas through casual conversations in the Lab and in the hallways; making presentations at company off-sites; having random encounters with high-level execs; and hosting something called a "sneaker meeting," a condensed dose of information about Internet culture, along with scenarios about how Toyota fits in.

Dames started at the company in 1990, right after graduating from UCLA with a degree in Japanese studies. He's fluent in the language and lays claim to being part of the first wave of Americans hired by the company to work at its Tokyo headquarters. Working in Toyota's North American sales-and-marketing division, Dames immersed himself in the company's culture, learning its nuances and boundaries. He brought the first Windows 3.1 laptop into Toyota Japan, for example, and remembers the 26 stamps of approval it required before he could use it on the corporate network. With his own 14.4-kb modem, he became one of the first staffers in the office to gain Internet access. Back then, executives would gather around his desk to look at Web sites.

In mid-1996, Dames returned to his native California, planning to get his MBA from UCLA's Anderson School of Management, but Toyota Motor Sales derailed his plan by offering him a short-term job that turned permanent in the technology department. He was surprised by the lack of Net savvy. "Very few people had Web access," he remembers. "We didn't have an intranet at a time when most large companies were starting to get with it."

In December 1996, when Toyota Motor Sales hired former MicroAge Inc. CIO Barbra Cooper as its own chief information officer, Dames was curious to see whether an outsider like Cooper might support his desire to get Toyota up to speed with e-commerce and the Web. While everyone in the it group was slightly wary of the new exec, Dames seized the opportunity to introduce himself.