Toyota Financial Services on Aligning Business and Social Goals
For more than 35 years, Toyota Financial Services (TFS) has made it its business to help its customers achieve their dreams. Through flexible financing and leasing, comprehensive vehicle and payment protection plans, and well-rounded insurance offerings, TFS has helped make driving and owning a Toyota vehicle possible for so many.
And now, TFS is taking that same kind of problem-solving and innovation to a new level: serving the customers—and TFS employees—of tomorrow.
The TFS CSR team has re-positioned itself as an innovation lab, aligning their approach to creating sustainable social impact to business goals and seeking out increased opportunities for partnership between business units and the CSR team. By explicitly tying their corporate social responsibility (CSR) efforts to their business strategies, they are ensuring the next generation has the skills and capabilities to enable them to reach their dreams.
Pyxera Global’s John Holm recently had a conversation with TFS’ Elena Sacca Smith, Group Manager, Corporate Social Responsibility and Corporate Communications regarding TFS’s approach to strategically aligning social needs with business goals for greater opportunity and impact.
TFS has been a leader and innovator in the automobile financing space for some time. Given past successes, what was the motivation to explicitly link CSR activities to business operations?
As a company, giving back to the communities where we work, live, and serve as a financial services institution has always been of great importance. We’ve been named one of the most community-minded companies in the United States for five consecutive years by the Civic 50, and we’ve seen great engagement from our team members, 59 percent of whom participated in community activities in the last year. While we recognize we’ve been doing a lot of good work—true to our “Kaizen” philosophy of continuous improvement—we knew we could do even more.
In 2017 we expanded our focus to incorporate CSR into business operations. We gathered input from internal departments, our partners at Toyota Motor North America, and our nonprofit partners. When we studied the landscape and consulted with strategic advisors like Pyxera Global to evaluate best practices and lessons learned, we knew we had the opportunity to increase the good we do by tying our activities directly to our strategic areas of business for a more unified approach.
We knew we had the opportunity to increase the good we do by tying our activities directly to our strategic areas of business for a more unified approach.
What were the approaches and specific actions you took in refreshing your CSR platform?
First, we evaluated the cumulative impact of our CSR activities and explored how we could improve on our work with community partners. Like all companies, our resources are limited, so we looked to organizations with complementary missions and capabilities that would have the greatest impact on the two categories which are most strategically aligned to our business: financial inclusion and workforce readiness.
We also partnered with Pyxera Global to review our existing CSR platform to assess not only social impact but also the business impact from our CSR initiatives. We held in-person meetings and interviews to discuss current programs and goals and then designed a Project Impact Framework to help us categorize existing and future CSR projects into one of three categories—conventional, strategic, or Shared Value. We’re now using the Framework to examine each project in terms of the potential social impact; the potential for return on investment to our business; alignment to our impact categories; and ultimately the rationale to continue deploying funds and resources in the project for the future.
With Pyxera Global’s help, we also developed Common Performance Indicators to pilot, increasing our ability to measure program impact across all CSR activities
What were some of the barriers you overcame to be successful?
Our journey is just getting started. One of our biggest barriers has been how the leaders in our company view CSR as mere philanthropy. While it’s in our DNA to give back to the community, we need to learn that what can be great for the community can also have a positive impact on our business, which is the idea of Shared Value.
In addition to working with leadership to drive purpose, we’re also looking to the rest of our team, socializing the idea of Shared Value. During one of our last Innovation Fairs, an internal competition for Toyota employees to submit inventive business ideas, we introduced a community component that opens our CSR ideation to all departments. We found that, while the Shared Value category wasn’t initially on the Innovation Fair application, many employees were submitting ideas that already aligned community needs with business opportunities. It was the perfect time to recognize these ideas and start to really define what was already happening organically with such a community-minded culture at TFS.
One of the participating teams was awarded for their proposal that supports environmental goals while reducing operational costs. It was a team that envisioned hybrid vehicle batteries being put to use well after their life with a vehicle had ended, to perhaps serve as a power generation station to an area after a natural disaster. This would also save Toyota the cost of recycling the batteries. The CSR department will fund this pilot program, and successful results will help build a foundation for future programs.
You have longstanding relationships with Junior Achievement, Boys & Girls Clubs of America, and the Girl Scouts. How will the new CSR strategy impact your collaboration?
For many years we’ve engaged these three important nonprofit partners on various levels, all with the underlying goal of making a positive impact on the lives of children. While our collaboration has included an array of programs and approaches, we have increasingly sought to incorporate our impact categories for CSR into programming to better align with the business, with a focus on workforce readiness and financial inclusion. Through mentorship, scholarships and internships, and other educational programming, we are preparing underserved children, teens, and young adults for higher education. Our goal is to ensure they are financially capable and ready to make a difference in their local communities when they enter the workforce.
For example, Toyota became a founding partner of Boys & Girls Clubs of America’s Great Futures movement and the Signature sponsor of their Youth of the Year program. In our partnership with Girl Scouts USA, we are implementing a new monitoring and evaluation approach that enables us to move beyond counting the number of children served, number of volunteers engaged, amount of dollars funded, and other statistics. Rather, we’re seeking to understand if and how the programs we support are moving the needle on the change needed to close the gender gap in financial education. Girl Scouts USA conducted a study revealing that 92 percent of girls lack confidence in the financial decisions they will need to make in the future. We are looking to see how we can improve on not just the number of financial workshops we hold each year, but how we’re helping build girls’ confidence and financial understanding over time.
How has your focus on impact measurement changed the way you evaluate programs?
We remain committed to these important partners, but with our recent work in impact measurement and evaluation, we are now positioned to see the reach of past efforts and areas we need to target to create a legacy of change. We can now look at each strategy through a new lens, thinking beyond outputs to measurable, long-term outcomes.
We can now look at each strategy through a new lens, thinking beyond outputs to measurable, long-term outcomes.
As a team, we’re feeling more equipped to articulate our fundamental goals to our partners based on expected outcomes. With the benefit of the impact measurement component, they are able to advance their own missions using storytelling and targeted capacity building, among other tools, more effectively. They can also use these measures of success to pivot from activities that are generating limited results in favor of those that are truly contributing to enduring progress.
Our new measurement strategy will help us and our partners to better communicate the impact that their programming and the partnership has in the communities. This can help them pursue new or additional funding from their partners by showing the return on investment and their program impact.
We now have an even better opportunity to create sustainable change, building the capacity of our partners, and strengthening our own team in the process. We’re forging new paths with our existing partners and will consider new partnerships with a different level of scrutiny and intent. Our journey continues with a focus on developing strong outcomes with real, tangible results and looking both within our own strategies as well as externally with our partners for the most meaningful approach.
We’re in the process of introducing these concepts to our partners and illustrating the importance and impact they will have. We are developing strong outcomes based on the work and value our partners bring. We know that this requires sustained effort, but we also understand the tremendous value and opportunity this direction brings.
When we are able to seamlessly blend our business objectives with our social strategy, when those values overlap and business operations support CSR activities and vice versa, we will have accomplished our vision of true alignment, which we expect will not only increase our value as a company, but also provide a model for real social progress.
About Toyota Financial Services
Toyota Financial Services helps millions of Toyota customers drive the vehicle of their dreams, thanks to their flexible financing and leasing, comprehensive vehicle and payment protection plans, and well-rounded insurance offerings. Their goal is to deliver exceptional customer service that matches the exceptional quality of Toyota vehicles. With over $120 billion in managed assets—through financing, leasing, and protection plans—it is one of the largest automotive finance providers in the world.