Taken at face value, Be Practical and Avoid Frivolity would seem to be the most austere of the Toyota Precepts, evoking images of a stark workplace, one that is untouched by color and levity. Fortunately, that is far from the way associates of Toyota Industries Commercial Finance (TICF) view their workplace—and a flat and colorless workplace would represent a misunderstanding of this Toyota Precept.

What Toyota founder Sakichi Toyoda meant to capture in sharing this idea was the responsibility all workers have to act with care regarding every decision they make. When you read the second half of the precept, Focus on what is important and make improvements diligently, without being obsessed with appearance, the context becomes clear.

Toyoda was frugal, keeping items for later use or reuse and living a modest life despite his success. Yet this precept isn’t designed to imply that the company aims to hoard assets or deprive its workers. In fact, as Sakichi’s son-in-law Risaburo Toyoda said when he served as president of Toyota, “If [something is] considered effective and appropriate to further develop our business, I am willing to invest however much money necessary, but I shall spend none, not even a single yen, if considered unnecessary.”

Avoiding frivolity reflects the need to act as a diligent steward of the company’s finances and invest resources prudently. Given Toyota’s focus on process improvement, it’s aimed at eliminating waste—whether wasted action or wasted funds. This precept is an excellent example of why Toyota intentionally embraces a slow journey toward automation. If you inadvertently automate a bad process, it just allows you to do the wrong thing faster.

This precept also encourages team members to remain humble; while it’s important to encourage and celebrate achievements, those actions should never veer into boasting or claiming underserved credit.

The precept is also demonstrated by managers who are mindful of muri, mura, and muda (overburden, uneven use, waste), and making sure that every part of the process creates value. And it’s demonstrated by every associate who makes suggestions to remove waste or considers and identifies the root cause of an issue.

Sakichi’s philosophy to “use your head and not your money” rings true today.