Published on June 5, 2019
Job titles and other details are as of the time of publication.
(The interview was conducted in Japanese and was thereafter translated into English.)

Creating case studies in management revolving around technology

My main areas of research are management strategy theory and technology management theory. I originally worked at a private company (more on that later) from an interest in management revolving around technology. Now as a researcher, I continue to visit businesses and conduct interviews to create case studies, which I then use to carry out qualitative research in topics such as “Research and development (R&D) management in manufacturing,” “Logic of creating new business,” and “Dynamic business model and sustainable competitive advantage.”

Because Hitotsubashi University has a partnership agreement with the National Institute of Advanced Industrial Science and Technology (AIST), I also visit companies that are seeking to grow their technologies and businesses, and provide consultations to bridge the gap between the technologies held by AIST and its network and the challenges faced by those firms.

The companies that I find attractive as research subjects have two main characteristics in common. The first, companies that are known for their unparalleled technological prowess: the company that boasts technology no other company has and it could be of any size. And the second, companies that present strong concepts. The messages delivered by the company should be consistent with its management. Ryohin Keikaku Co., Ltd. (Muji) is a perfect example. Why those two characteristics? That is a question I receive often, and to be honest, I am always at a loss for an answer. And the answer is not the logical kind that I would discuss in an academic paper. It’s more about my interest in consumer goods and a consumer society, and my fascination with coherence and symmetry.

Inability to cope with uncertainty is an obstacle to open innovation

In the interviews I conduct with companies for my research, I recently hear a lot of complaints about their struggles with open innovation. Open innovation is a concept defined as the organic combination of ideas from both inside and outside a company to create value. For instance, in order to commercialize a product more quickly, a company should conduct a minimum of in-house R&D and instead make the most use of another company’s knowledge and expertise. But my analysis of the companies struggling with open innovation suggests a certain pattern of failure, namely an inability to cope with uncertainty.

Up to the burst of the asset price bubble in the 1990s, Japanese companies enjoyed continuous growth. Back then, there were few variables in the economic environment that affected corporate performance. Forecasts were simple. The more products a company manufactured, the more it sold, the higher its share price. The companies that are struggling today are probably stuck in the mindset of the good old days.

But times have changed. The international situation has changed. China has risen to become an economic superpower. The European Union is unstable in the face of political and economic difficulties. The variables in the economic environment have changed significantly, and there is a lot more uncertainty. Moreover, advances in information and communication technology have incredibly improved the speed of calculating and obtaining data is incredibly faster today. And the pace of change will continue to accelerate. To adapt to that environment, the companies themselves must be willing to change.

In times like these, a company that is struggling on its own cannot partner with an external firm for that reason alone and hope for the best. In order to join hands and achieve a win-win scenario with a firm that has an entirely different background, from corporate philosophy to size to revenue, the company first needs to change itself and boost its ability to cope with uncertainty.

A company with energy to spare that can afford creative freedom

Now, let’s take a look at the kind of company that is good at coping with uncertainty.

My research up to now has revealed two trends. First, the company has energy to spare. A typical example is Toyota Motor Corporation—an industry leader that developed the first hybrid vehicle (Prius) and is now working on a hydrogen fuel cell vehicle.

And second—this is even more important than having energy to spare—the company and its leaders always have a sense of crisis, provided that the sense of crisis is not translated into pressure on the creative team, but channeled into giving them freedom. I learned that from my experience of working at a private company.

Engineers running wild led Fuji Photo Film’s reforms to success

I worked in the management division of Fuji Photo Film Co., Ltd. (currently Fujifilm Corporation) from 1992 to 1996. The company entered into the digital camera business in 1995, so I was there to witness from the inside the transformation from the gelatin silver process.

The digital camera business initially focused on professional users, but the demand quickly shifted and expanded to general users. The company was able to keep up with that dramatic change thanks to its pool of a broad range of technologies for sure, and what’s more, the skill of its in-house engineers. To put it bluntly, those engineers were running wild. In other words, they had the luxury of side project time. Sensing the advent of an era of liquid crystal display screens, they had independently initiated a project of developing the Wide View Film, with an original liquid crystal coating that expanded the viewing angle.

The directors and the leaders of the research division at the time tolerated, allowed, and encouraged the initiative. That paved the way for the success of Fuji Photo Film’s transition from gelatin silver to digital.

Society is constantly changing, and technologies will be superseded

In management terminology, the creative freedom offered to engineers is called slack. Simply put, it means giving engineers room. For instance, Google has a 20 percent time policy, and 3M has a 15 percent policy, both of which encourage employees to dedicate a portion of their work time (i.e., 20 percent and 15 percent, respectively) to side projects. That slack is believed to give employees emotional relief, the chance to think about their future, and the time to test their ideas.

By contrast, imagine an environment in which engineers are allowed to pursue only a limited range of research topics. They are so overwhelmed with trivial routine tasks that they have no time for side projects. They go about their daily work for the sole purpose of improving transparency and efficiency, and producing results. All of that will rob a business of the excess energy needed to create and embrace change. In time, in-house technologies will become obsolete, and the company will lose the ability to cope with the ever-changing industry and society. By that point, there is no use trying to incorporate external knowledge and expertise, and the company ends up complaining that it is struggling with open innovation.

Society is constantly changing. Technologies are destined to be superseded. Leaders need the discretion to offer creative freedom. That will prevent the obsoletion of technologies and improve the company’s ability to cope with uncertainty.

Business administration is about appreciating constant change

The study of business administration is difficult because there is no such thing as a theorem. Everything I have discussed here, I derived by inductive reasoning from my observations of many company experiences. From external rivalries to internal study programs, there are so many variables that it isn’t practical to formulate statements like “If A happens, then B will (always) follow” as in the natural sciences.

Actually, the absence of a theorem is not even the point. Business administration is about recognizing the importance of and appreciating constant change. That forms the basis of my research because I have worked at a private company myself. I hope to take advantage of that experience to establish the core variables, analyze the relationships between those variables, and create my own framework.

Furthermore, because I have the experience of working at a private company, I hope to present management theories that are convincing to businesspeople and can be reflected in their day-to-day real-world operations. My aim is to provide management theories in easy-to-understand words, without relying too heavily on technical terms and academic vocabulary. In other words, theories that are useful. In this interview, I have also tried to give a lucid explanation and I hope it helped you understand what I do.