Iris Ohyama and Keyence are practicing.Three mechanisms for companies that keep changing

The term ambidextrous, or two rabbits, refers to “Search for knowledge”and”deepening knowledge” Knowledge exploration is the act of trying to expand knowledge far beyond the scope of one’s own or company’s existing knowledge, and in the context of business, it means thinking about new businesses. Another way to deepen your knowledge is to continue to dig deep and refine your own/company’s knowledge in a certain field to further expand your existing business.

In general, existing business, or the deepening of knowledge, is often expressed as the right hand (dominant hand), and new business, or the search for knowledge, is often expressed as the left hand. Since the requirements of both parties are different, it becomes difficult to understand each other. .

The global company I introduced at the beginning is a typical example of a company that is busy deepening its knowledge and is unable to explore it. You could say that you are running your business using only your dominant hand.

Incidentally, many empirical studies in business administration have shown that companies with ambidextrous management tend to have more innovation and higher performance.

Even if you know, you can’t change. The “dilemma” of large companies

However, many companies are unable to change.

This is detailed in Clayton Christensen’s masterpiece “The Innovation Dilemma,” translated into Japanese in 2000, and it is a common dilemma faced by leading companies in their industries from the past to the present.

Best-in-class companies become great because they listen carefully to their customers and invest aggressively in new technologies to make that happen. Because of our strong experience of success, we will continue to pursue “sustained innovation.” This can help you make more money in the short term. This “sustained innovation” is a concept similar to “deepening knowledge” in ambidextrous management. In other words, your dominant hand becomes stronger and stronger.

However, while the company is engaged in “sustained innovation,” a small company engaged in “knowledge exploration,” which is referred to as ambidextrous management, introduces “disruptive innovation” and turns the market of superior companies upside down. . Looking back at history, disruptive innovations have occurred many times in Japan’s home appliances, personal computers, mobile phones, and the semiconductor industry.

This is something that most business owners and managers should know. However, we are so busy every day that we become complacent and think that something like this will never happen to us.

Japanese military failure

People don’t notice subtle changes. And I don’t want to change. He doesn’t change even though he knows he has to. Well, to put it more accurately, it’s “unchangeable.”People and companies don’t change until a major problem occurs.It is.It’s called “boiled frog syndrome.”

Why do companies and organizations rely only on deepening their knowledge, that is, on their dominant hand? This can also be seen from the book “The Essence of Failure: An Organizational Study of the Japanese Military” by Professor Emeritus Ikujiro Nonaka of Hitotsubashi University. .

The Japanese military in World War II remained committed to infantry warfare, even though warfare at the time was no longer infantry-centered. The military was made up of Japan’s elite, so they fully understood that the way wars were fought was changing. .

However, I couldn’t change. There are three reasons.

1. People who achieved results using traditional methods became executives.
2. They were making big investments in refining traditional methods and not investing in new things.
3. I couldn’t say that I could lose 100% using traditional methods.

The “traditional method” here refers to infantry-centered warfare, which is the Japanese military’s dominant strategy. In other words, from an executive’s perspective, changing traditional ways of doing things means denying one’s past.

Moreover, doing something new threatens your status. It’s easy to imagine that investing in something new can lead to pushback from organizations that have been optimized for traditional methods. Moreover, since a large investment has already been made, someone has to take responsibility for the sunk costs.

As a result, they choose to continue with traditional methods, even though the chances of winning are extremely low.

The same thing is happening to companies today, about 80 years after the war.

“Three points” to keep changing

To sum up the key points of ambidextrous management a bit harshly, it is that if you do not continue to evolve, you will decline. However, as mentioned earlier, when things are going well, people become conservative and have a greater energy to stay as they are. To prevent this, it will be difficult to rely on individual judgment alone. If so, it would be effective to create a “system for continuous change” in your company or organization.

The mechanism can be roughly divided into three types.process, outcome, awarenessis.

first”processLet me introduce an example of “.

A representative example of a company that is constantly changing is 3M, an office and industrial supplies manufacturer headquartered in the United States.

3M has a “15% rule” that allows employees to devote 15% of their working time to research that interests them. Google’s “20% rule” is also famous, but 3M actually had this rule in place from the very beginning.

What’s surprising is that although they call it a rule, it has never been written in writing, and they don’t seem to measure 15%. Therefore, it is sometimes called “15% culture.”

In the business I was in charge of during my time at Recruit, we set 10% of our time as an innovation mission, referring to 3M and Google.

20% is equivalent to one day’s working time if you work five days a week. When I was in Recruit, I couldn’t decide not to work all day long, so I cut it in half to 10%. Moreover, we have created an escape route that allows us to double count innovations in our current work.

This means that we acknowledge not only the search for knowledge but also the deepening of knowledge.

In addition, we were recruiting for an idea contest every month, and created an escape route where if you submitted an idea to this contest more than once in a six-month period, this 10% portion would be evaluated as standard.

Thanks to this, we were able to create a situation where an organization of 300 employees submitted 500 ideas every month. When you collect 500 ideas, one or two of them will turn out to be the seeds of truly great innovation. This means that around 20 innovations will be born every year.

Iris Ohyama’s “mechanism” to create new business

The second process for continuous change is “resultThis is an example of “.

This is often adopted by companies that are constantly growing.New business sales ratio to sales” is valid.

Iris Ohyama is a representative of a company that has recently expanded into various fields. The company has set its new business sales ratio at over 50%.

To this end, we hold a weekly meeting to decide whether or not to launch a new business, and the president decides on the spot whether or not to proceed with the new business. All department managers are required to attend the meeting. By proposing new business every week and deciding on the spot whether or not to proceed, we continue to generate more than 50% new business.

Share KEYENCE’s “employee profit per hour”

The third is “consciousness” is an example.

Keyence is a representative example of a highly profitable company. At the start of a new fiscal year, the company shares a figure called the “time charge” with all employees. This is calculated by dividing the previous year’s profits by the total number of hours worked by all employees. In other words, it is a rough estimate of how much profit each person should make per hour.

Keyence is also famous for its strong ability to understand customer issues. By achieving these challenges at a speed that other companies cannot imitate, we are able to provide high value to our customers and, as a result, earn high profits for ourselves.

Naturally, using traditional methods alone will result in lower profits. Therefore, by providing employees with “time charge” figures, they can increase their awareness of constantly creating innovation.

If you think about it, this number is easy to calculate for any company. Not only is it easy, it may be possible to change your mindset.

However, if you share the hourly charge figures with a company whose current profitability is low, they may say that it is okay to stay as is. In that case, you may want to use the profits from your business plan.

If you don’t have a system, do it unnoticed.

However, in reality, most companies do not have such a system. In that case, do it without being noticed. Bootlegging (making moonshine).

Moonshine is illegal, but if you’re creating new business by recruiting colleagues from within your company and holding study sessions, then of course it’s not illegal.

They network with in-house volunteers and develop products without telling their bosses. If we can find at least one company that is interested, it’s ours.

You have nothing to lose if you fail. Even if you get caught and get scolded, I think you should just write a termination letter and quit that kind of company.

If you are a leader reading this and want to increase the number of employees who are proactive about new business, we recommend that you set up a separate budget at your headquarters. The idea is to create a system in which a separate budget can be drawn from the head office for research and projects that are not approved by the field department.

First of all, why not start with what you can do from your position?

Ryuichiro Nakao: Representative Director and President of Nakao Management Institute. Completed the Graduate School of Engineering, Osaka University in 1989. Joined Recruit. He assumed his current position in 2019 after serving as executive officer (in charge of business development) of Recruit Sumai Company, president of Recruit Technologies, and deputy director of Recruit Works Research Institute. He also serves as an outside director for Tabi Kobo, LIFULL, and ZUU, and a part-time auditor for LiNKX. His new book is “When the leader changes, the team changes.”