Toyota started by focusing on overshot consumers, and its first cars sacrificed traditional benefits for new ones not previously available. The Toyota Corona was a no-frills, affordable small car, not luxurious at all. But it arrived during the gasoline crisis of the 1970s and it offered two things consumers couldn't get from American cars: fuel efficiency and reliability. Americans were willing to sacrifice some of the size and luxury U.S. cars were offering, in return for being able to save money by paying a lower price, buying less gas and by having a car that didn't require as much repair and maintenance as American cars did. Over the next 30 years Toyota worked its way steadily upmarket, always stressing value and quality, until with the Camry it found itself in the heart of the U.S. car market and taking significant share from the Big Three. This parallels exactly the progress of disruptive innovators across all industries - the "green line" trajectory of the disruptive innovation graph.

Toyota recently disrupted itself with the introduction of its Scion brand, intended to target consumers not interested in traditional Toyota offerings.

Toyota sees itself as a portfolio company, and it understands the "long tail" concept. Its acknowledged mission is to serve every kind of customer, and it makes small batches of many models across three different brands to satisfy as wide a variety of consumer as possible. There is no one big solution at Toyota.

Toyota keeps a relentless focus on customer jobs to be done. Before it designed the new Tundra, its executives went out into the market to talk to truck drivers about what they wanted in a in full-size pickup truck and the ways in which they thought competitors come up short. They went to every state in every season and silently watched all kinds of truck drivers using their trucks to get jobs done. Then they came back and designed the Tundra. To meet all of the identified customer jobs to be done, the Tundra will offer 31 different configurations, including such innovations as mobile office features for contractors.

It's worth noting also that Toyota also doesn't allow production constraints to limit product offerings. If 31 configurations are needed, it will structure its production facilities to be able to offer them.

Toyota views its customers through life circumstances, not demographics. Toyota executives were able to classify potential Tundra buyers into several different groups: outdoorspeople, construction workers and home-improvement enthusiasts, farmers, Nascar fans, motorcycle enthusiasts and country-music lovers. Not one of those falls neatly into a demographic bracket, and each uses trucks very differently, but by focusing on circumstances Toyota was better able to develop solutions for each of these groups.

Toyota uses jobs-to-be-done research to strengthen its core business. Toyota knows that its customers keep their vehicles a long time, so it invests consistently in improving its existing products based on customer feedback: making them more reliable, more convenient and more environmentally friendly while keeping them affordable.

Toyota keeps one eye on the future outside its own company. One of the company's mantras is "Open the window. It's a big world out there!" Each Toyota engineer working on a new car must take into consideration as part of the design the quality, reliability, parts durability, emissions and the external environment in which the car will be driven, not just in the year it's sold but over the entire lifetime of the vehicle. Toyota executives have forecast that fossil fuels will become more scarce, the harmful effects of fossil fuel combustion will become more pronounced, and at the same time demand for cars will increase. Therefore alternative fuels and hybrid vehicles will likely become increasingly important. Using these assumptions, Toyota began work on the Prius in 1991, when gas was cheap and Ford and GM were focused on quarterly profits and introducing large SUVs. Using this approach makes it very difficult for competitors to keep up.

Toyota invests heavily in research and development. It's focused on making a lot of money with core products so it has enough to invest in new ones. It spends much more than its competitors on research and product development. It is never satisfied with what it currently offers; it's always looking for incremental improvements and new opportunities.

Toyota understands the importance of process efficiency. It focuses relentlessly on ways to improve all its processes, either to cut its costs or to provide greater value at the same cost to the customer. It sees new process development as just as important as new product development, and charges every employee with finding ways to improve efficiency and reduce waste.

Toyota makes problem identification an imperative. To solve a problem, it first has to be identified, and most workers naturally want to hide problems. Toyota views problems as reductions in the value of its products, so it celebrates and rewards those who bring problems to light and then it devotes the necessary resources to solving them.

Toyota learns from failure rather than punishing it. The very first car that Toyota introduced in this country was a flop. The Tundra has flopped twice. Each time Toyota has gone back and done more research to try to learn where it didn't get it right, and to tweak accordingly.

Toyota invests in customer feedback loops. With the most recent introduction of the Tundra, Toyota sent dealers out to big events that were likely to draw a lot of pickup truck drivers and where parking was a long way away from the event itself, and they offered free shuttle rides in a new Tundra. This was a valuable source of early feedback from the target audience. Toyota dealers are consistently encouraged to provide the company with regular customer feedback on all products.

Toyota tries to make its innovations adaptable and "repeatable." No one knows what the next fuel will be after fossil fuel becomes too expensive or too scarce, but Toyota's hybrid technology will work with a variety of alternative fuels: biodiesel, ethanol or hydrogen.

Toyota has one clear, consistent set of values, relentlessly communicated. Toyota sees as its mission "to enrich society through the building of cars and trucks." Every employee knows it, employees repeat it often in meetings and in internal communications, and it has become embedded as a common language throughout the company that guides everything they do.