Alistair Davis - Retires

A career spanning more than 40 years with Toyota New Zealand is coming to an end for retiring Chief Executive Officer Alistair Davis.

Reflecting on his stellar career, we probed deeper into what were some of the highlights, lowlights, challenges and learnings.

Over that time, Alistair has seen changes in the landscape of New Zealand’s motor industry. From the controlled market of the early 1980s, with controls on wages prices, and import licencing (which required local assembly of motor vehicles), to the move in the late ’80s to an almost ‘neoliberal’ approach with a completely open market to both new and used vehicles with relative light compliance standards.

He has seen the pendulum swing back and forth, now sitting at a more balanced approach. He says what’s happening with market pricing is more of an equilibrium; after fixed prices in the early 80s to a free-for-all in the late 90s to the digital revolution today in which car-buying deals in the provinces must be as good as those in the larger metropolitan areas.

Balance is a common thread for the retiring CEO.

Alistair has carefully balanced his strong Christian values with the company values. Balanced the need to make a profit with the desire to look after staff and stores and meet the needs of customers. Balanced the need to work hard with his personal values to observe the “Sabbath” and take time for personal health and family and wellbeing.

Alistair joined as a fresh (and he’ll admit a somewhat naïve) graduate in the late ’70s, the day after his last university exam. He went on to graduate from Victoria University of Wellington in ’79, with a law and commerce and administration degrees.

As Toyota’s first graduate to enter directly from university, Alistair went straight into an accounting role. He had to learn on the job as the previous management accountant had left the week prior.

With the deregulation of the New Zealand economy and Toyota’s ambition for market leadership, the opportunities for personal and career development in the 1980s were considerable. By the age of 30 Alistair was promoted to General Manager of sales, marketing and planning in 1987 and Toyota reached the coveted #1 position the following year (“Just lucky timing,” he says). In 1995 he was promoted to Senior General Manager taking responsibility for all the After Sales functions as well as his responsibilities for new and used vehicles sales and Toyota NZ marketing. In the early 2000s he was seconded to Toyota Motor Sales, in the US with a range of assignments, including assisting Jim Lentz (later President of Toyota North America) launch the youth brand Scion. Shortly after his return in 2004, he was appointed Executive Director of Toyota New Zealand and a promotion to Chief Operating Officer followed in 2007. in Jan 2008 he took over the Chief Executive Officer role when outgoing CEO of 25 years Bob Field retired.

In the 40+ years that Alistair has been with Toyota the company has grown immensely, from a two-bit tiny franchise in a very immature state (sitting at about fifth in the market) to a company that has held the number one spot in New Zealand for 32 consecutive years.

Alistair admits the top position in a company requires hard work, but –so too does remaining in the number one position for all those years. He says it’s a hard job to defend your position at the top. You need to have big initiatives to stay ahead and reinvent yourself as a leader and as a business.

Once the deliberate strategy to be number one was achieved (first in 1988), Alistair says, there was then a refocus on customer service. Alistair was instrumental in a raft of initiatives to ensure customers were at the forefront of the business, including the establishment of Toyota’s award-winning Dialogue Centre, the introduction of Extra Care products, a big investment in training (then named Toyota Training Institute), the establishment of Toyota Finance, and the introduction of three year warranties and Lexus Care. It culminated in the establishment of a National Customer Service Centre (NCSC) in Palmerston North in 1991.

Another thread through his career has been building the Kiwi brand and making Toyota synonymous with heartland New Zealand. The Barry Crump ads, the Welcome to Our World campaign, Everyday People, Believe, sponsorships like the 1990 Sesquicentennial celebrations and Emirates Team New Zealand (America’s Cup), and the tuning of cars to New Zealand conditions (local assembly days) with Jan Beck interiors, McKenzie seats and Chris Amon tuning. All these inputs made our vehicles very Kiwi and likewise the Toyota brand very New Zealand.

These initiatives struck a personal chord with Alistair as he reflected on his younger years, growing up with a passion for motorsport as some of the Kiwi legends of the day, Denny Hulme, Chris Amon and Bruce McLaren, competed against the world’s best. He, alongside his colleagues, was passionate about reigniting this legacy of Kiwi motorsport and seeing the next world champion grow from Kiwi soil.

The Toyota Racing Series is testament to this brainchild and dream, breeding a new class of Kiwi youth suddenly making the world stage again – like Mitch Evans, Brendon Hartley, Nick Cassidy, Marcus Armstrong and Liam Lawson, to name a few.

Another area of huge impact during his tenure has been the hugely successful establishment of the Signature Class brand and our Used Car business. With the deregulation of the New Zealand vehicle industry came the advent of used vehicles imported from Japan. After initially trying to stop the trade in order to protect local jobs and the manufacturing infrastructure in New Zealand it eventually became clear that NZ no longer needed a vehicle assembly industry. Accordingly, Toyota entered the used vehicle trade and converted its Thames assembly plant into a vehicle refurbishment centre. This enabled Toyota to offer customers both used imports and ex-rental and lease cars refurbished to Signature Class Standards. Toyota’s used car business has expanded the value chain and this business has now grown to almost $300m per year.

Fast forward to 2018, and Alistair was instrumental in turning the traditional method of buying a new vehicle on its head – shifting from the more traditional purchasing model to an agency-based model and introducing the Drive Happy Project.

“When I reflect on all these significant milestones in my career, all of them took time. A long time.

“The key is having an ability to persevere. You don’t achieve overnight success overnight. Take Barry Crump; that was 14 years, the America’s Cup took three decades and the new business model ‘Drive Happy’ was 10 years in the making.

“I hold on to a saying that I often quote to my kids: ‘Observe the postage stamp. Its effectiveness depends on its ability to stick at it, until it gets there’.”

When asked about legacy, Alistair points to the investment in people more than anything else, be it customers, retailers or the culture of his team. With any ups there are downs. And while there is a deep acknowledgement of staff lost during his service to illnesses and accidents, he has had other challenges to face at the top.

Like the challenges of managing the expectations of stakeholders, staff, dealers and customers. “Often people come in with only a limited picture from their perspective of what’s going on, and they struggle to understand the bigger picture of what’s happening. That has been probably one of the biggest challenges in this role as CEO – managing and balancing expectations for all the stakeholders, be it managing government expectations about low-emission products available or managing retailer revenue expectations and pressures from our parent company.” He says it’s a balancing act, with constant trade-offs between short-term and long-term goals. “But that’s a CEO’s job,” he adds.

When asked what he’s enjoyed in the past 40 years, one thing sticks out. Alistair loves teaching others and says he probably should have been a teacher.

He shares his passion for teaching and imparts his wealth of knowledge, enabling others to understand the most complex of financial, political and global matters. He has an incredible knack of synthesising things into a framework that people can digest easily.

His favourite weekly read is The Economist, which he reads cover to cover. On the morning of the interview he’d read about: BC and AD – ‘Before COVID-19 and After Domestication’; the future of work and whether work will change in the new world; the Chinese equity markets; and some artist (Sophie Taeuber-Arp) who’d died in 1943 but has recently been rediscovered. This is all information he stores in his memory bank and somehow entwines into one of his state-of-the-nation staff or store speeches.

Alistair admits to being hugely steeped in the two foundational pillars of Toyota, Respect for People and Continuous Improvement. For the past 11 years he’s made it his mission to visit every Toyota store in the country. It has been during these visits, aptly named ‘the Believe tours’, that he’s imparted some of his knowledge. He engages with the front line retail staff at all levels and involves them in strategic directions that the company is taking. Each year that has added up to almost 3 months on-the-road, engaging with the wider Toyota Family.

This dedication and sacrifice come from a leader who values a huge investment in people, and holds dearly to the Māori proverb: He aha te mea nui o te ao. He tangata, he tangata, he tangata (translation: What is the most important thing in the world? It is people, it is people, it is people).

“A CEO can do very little on their own,” Alistair says. “Whatever success I have had at Toyota over the years is largely attributable to the team I have had around me.”

Alistair also acknowledges that he’s been well mentored for many years. “We stand on the shoulders of giants,” he says – and this is literally and figuratively true, for Alistair learned from the previous CEO Bob Field, who literally and figuratively stood out like a giant.

Alistair reflects on the early days in the company, in not only a male-dominated industry but a male-dominated world, and says we’ve come a long way but there is still a way to go. “Teams are far more empowered and appreciated today; devices and the digital revolution make everything easier. The flip side to this is home and work lives become blurred.

“The other positive change over the years is sustainability is much more accepted, not just green issues but the whole range – workforce sustainability, social license to operate, environmental impact as well as financial sustainability.”

In recent years Alistair has been a champion for delivering sustainable business solutions. A long-term member of the Sustainable Business Council, from which he has just stepped down as Chair after four years and two terms, Alistair was one of the founding signatories of the Climate Leaders Coalition and is currently on the Massey University Council.

Toyota won’t see him step down completely though, as he will remain the Chair of the Board for the next two years.

So, what for retirement? An emphatic rest Alistair says! After 40 years of hard work it is time to withdraw from most boards and take time out to enjoy his grandchildren and have some quality family time. He’s a keen photographer, so he’ll keep his hand in that and maybe get into a bit of cycling, and he’s looking forward to walking the Milford Track early in 2021. The rest, he says, he’ll leave to see what God puts in his path.

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