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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


Steering a New Course for Japanese Management

Leadership in focusing management resources. The basic condition necessary for raising the chance of success and lowering the risks in developing original products is focusing management resources (especially personnel, information, knowledge and motivation). To do this, senior managers must articulate a clear strategic direction.

Top corporations have devised different ways of articulating strategy. While some companies, like Toray Industries, have done so by defining their domain, others have laid down very concrete parameters, as Fuji Photo did with its hit Quick Snap: a 35-millimeter film cartridge and ISO 400 film for 1,000 yen. Sharp's strategy is more middle-of-the-road: "To open up the possibilities for children in electronics, making use of liquid crystal displays," said a member of the company's top management.

However, it is meaningless to try to put labels on fields such as electronics, biotechnology and space-age materials. The words of one researcher at a food company vividly attest to this: "Biotechnology is too broad a term; I don't feel comfortable with it."

Leadership in promoting development. For a corporation to become a front-runner, managers must do more than simply exercise strategic leadership. They must take one more step forward in displaying that leadership.

The type of leadership style that can be seen at top corporations in America, like the Minnesota Mining and Manufacturing Company or Rubbermaid Inc., is a top-down approach, with a typical objective to raise sales a certain percentage by introducing a new product. Leading Japanese corporations rarely adopt such a style. Instead, the fundamental ideology is one of "invisible leadership," which insists on encouraging ideas to rise from the bottom up.

A classic example of invisible leadership can be seen in the recent management practices of the Toshiba Corporation. To develop products suited to the multimedia age, Toshiba's top management assembles talented personnel from within the company to create what is unofficially called a Panel of Experts. The panel is divided into two groups. Team No. 1 sets down 9 or 10 topics ("domains") related to its members' visions for the 21st century, while Team No. 2 takes these topics and creates product concepts and broad enterprise plans. Toshiba went further and established its ADI (for Advanced Intelligence, Information, Integration) Project Department for developing products and technology.

In short, what drives the Japanese leadership style is the power of employees. The personnel system of Japanese corporations is extremely refined, but too fixed. The involvement of top management is required to effect change.

Sharp, one top corporation that is receiving a lot of attention these days, has become quite famous for its Kinpro product development program, a model of management leadership.

Kinpro is short for Kinkyu Proj-ect, or Emergency Project. It is under the direct control of the company president and answers to neither the research center nor any of the business departments; its expenses are paid by the head office. Proposals submitted by each department are carefully considered by a General Technology Council (composed of managers and non-management personnel). Those that are approved are forwarded to Kinpro for action. Members of this team are permitted to wear the gold badges that are normally reserved for company executives and are given preference in the use of company facilities and in procuring materials. However, the Technology Council keeps a very close watch over their activities.

The success rate of products handled by Kinpro, such as the Liquid Crystal ViewCam and the Electronic Systems Notebook, is astonishingly high. This is no doubt due to the fact that the company's energies and resources, under the leadership of top management, are focused on this one project. Furthermore, the close involvement of top management has heightened the motivation levels of product designers, and the special treatment that these select employees receive has given them a sense of pride.

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