Associate Professor Yoichi Ochiai of the University of Tsukuba took the podium at Fujitsu Forum 2018, a May 2018 event hosted by Fujitsu. Dr. Ochiai had a discussion with Iwao Nakayama (Chief Evangelist, Global Marketing Group Corporate Executive Officer, Fujitsu Limited) on the theme of "corporate revitalization strategies" based on his bestselling book Nippon Saiko Senryaku (Japan Revitalization Strategy). What will Japanese companies need in the future? The Fujitsu Journal team reports on the session attended by approximately 1,400 people, the most popular of the roughly 120 sessions at Fujitsu Forum 2018.
The approximately 60-minute session consisted of three parts. First was a talk by Dr. Ochiai about what corporate revitalization requires. Second was a presentation by Nakayama on the same theme. Third was a discussion in which Nakayama asked Dr. Ochiai questions.
I think that Japan is the nation where mass communication and modern education have worked most effectively. When developing a nation on the assumption that the population will grow naturally, the "homogenization of people" was efficient because it is difficult to lead people with different characteristics.
That is why the government used the power of mass communication and modern education to provide the same information and education―to homogenize people as much as possible, which was effective when the economy was growing.
However, this will not work in the future. With the declining population, we must change everything, including policies, economic planning, education, and social infrastructure.
We must evolve out of a homogeneous state, which involves various aspects. For example, differences between rural and urban populations will be much larger in the future. That means businesses that can be operated well in urban areas will become more difficult to operate in rural areas than before, and the opposite is also true.
If the population decreases, various problems occur. The measures and policies to promote will continue to diverge between metropolitan and rural areas. For example, the social infrastructure that has been maintained for a village with several hundreds of people cannot be eliminated even if the village disappears except for a single elderly person.
To maintain infrastructure in rural areas, measures and policies that differ from those of the past―as well as differ from those of metropolitan areas―will become necessary, such as selling electricity to earn money for infrastructure maintenance. To cope with such situations, it is important to shift from centralized governance to independent, decentralized governance.
In addition, we have to accept the aging society. The number of people with disabilities will increase in inverse proportion to the population decrease. We must solve the critical issues of the aging society with the power of technology over a period of decades.
Technologies are already helping solve the problems of people with disabilities, such as the blind, the deaf, and the orthopedically disabled. In the future, even greater contributions are expected from technologies.
For example, the Fujitsu-developed Ontenna uses hair as an interface to feel sounds. I myself collaborate in its development.
The Future of Ontenna (Japanese)
I work to research and develop technologies that address social issues and to implement them in society. My job is to implement technologies in society while teaching and co-researching with approximately 45 students at my university and collaborating with companies as needed.
When considering future growth strategies, companies must keep in mind the declining population and aging society with fewer children.
Evolving from homogeneity is also necessary from another perspective. With respect to technology, in the past, information was only available from television, magazines, and newspapers. However, we can now obtain information from various sources with the personal devices in our hands, unlike the past when everyone got the same information looking at the same screen. In the future, there will be more demand for products and services that are simple and optimized for "individuals."
Getting Away from Bad Open Innovation
I will talk about Fujitsu's initiatives to support corporate revitalization. Digital transformation (DX) is a topic that companies face today and will continue to face in the future. There are six factors that help us achieve digital transformation. Fujitsu calls these factors "digital muscles."
Among these factors, allow me to talk a little bit about three of them―"ecosystem," "people," and "agility."
First is ecosystem. Fujitsu is a large company with many employees whose business encompasses a wide range of areas. However, as Dr. Ochiai said, given the circumstances whereby society as a whole is changing greatly and customer demands have diversified, we do not think that our company can survive on its own in the coming years.
I strongly feel the importance of forming an ecosystem and co-creating with multiple companies. In particular, we focus on collaborating with startups that quickly turn fresh ideas into new businesses.
We have collaborated with startups for approximately 20 years. However, these efforts bore no fruit. We got into a vicious circle of mistakes that large companies tend to make in open innovation, such as "unclear objectives," a "condescending attitude," "delayed decision making," and being "urban-centered."
To improve this situation, in 2015 we began to seriously make efforts to collaborate with startups. We have gradually achieved results by speeding up and raising our level of commitment to ecosystem development. In the last three years, we have considered 77 collaborative projects with startups; among these, approximately 40 have been launched as businesses.
Somewhat surprisingly, Fujitsu was ranked fourth after KDDI, Toyota, and Softbank in the Ranking of Large Companies Serious about Collaborating with Startups featured in the March 2018 Nikkei Online Edition. Though the pace may be gradual, Fujitsu is changing.
A New Profession, "Digital Innovator"
The second factor is people. Fujitsu has recently created a new profession called "digital innovator."
"System integrator (SIer)," a category that applies to Fujitsu, refers to a business that designs specifications by listening to customers' requests and then develops and operates systems in accordance with said specifications. In a sense, this is a reactive job.
However, going forward, we must make proposals rather than merely undertake contract work as we did before, all the while building co-creation relationships with our customers―this may seem to be a matter of course, but such change is not so easy.
That is why Fujitsu has created a new profession called "digital innovator" that specializes in responding to such movements. Digital innovators are subdivided into three types: "designers," "producers," and "developers." We will cultivate 1,200 digital innovators by the spring of 2020; these personnel will take the lead in solving customers' problems.
Agility = Design Thinking
The last factor is agility. Although it may be difficult to imagine from the word, here agility refers to design thinking.
Corporate revitalization requires new approaches. However, there may be cases in which no ideas come up or ideas do not take shape. To think differently from daily work, we must change the way we use our brains.
Fujitsu talks to customers about the following five points to aid them in their design thinking.
Specifically, we ask customers to spend approximately two days "locked" in a room (laughs) to have thorough discussions. Fujitsu provides a specialized facility where customers can attend workshops according to our programs. Customers have highly evaluated the programs and facility because these enable customers to generate ideas that are different from the usual.
The Digital Transformation Center uses equipment and tools specialized for workshops and design thinking to support thinking that is different from the usual.
Nakayama: Now, I'd like to ask Dr. Ochiai three questions. Which theme shall we start with, Dr. Ochiai?
Ochiai: Let's start with Theme 1. This is difficult if there are no key people who can make appropriate decisions on both sides that are collaborating. The speed of decision-making in normal operations is inevitably slow not just in companies but also in schools and local governments. Therefore, it is very important for both sides to have personnel who can make decisions on their own in order to move ahead with projects.
Nakayama: "Both sides" is the point, right?
Ochiai: Yes. If only one side tries to carry out a project speedily, and the other side is behind, the efforts will be meaningless.
Nakayama: Your laboratory collaborates with many companies. How many projects have you collaborated on?
Ochiai: I haven't counted, but I think it is about 40.
Nakayama: What percentage of the projects has gone well?
Ochiai: Almost all of them have gone well.
Nakayama: Almost all of them? Are you really doing so well?
Nakayama: Is that because you manage everything well in all of your projects?
Ochiai: No, I think it is because I do not collaborate with any party that does not have a key person.
Nakayama: I see. What are the necessary characteristics of a key person?
Ochiai: There are a few characteristics. First, the person must have influence in the company or know the company's system well. In addition, the person must have a similar specialty so that he or she can communicate in a common language. The person must be able to share visions with us and have a flexible brain to listen to others' opinions―oh, and not be too young.
Nakayama: Around what age is best?
Ochiai: From the late 30s to mid 40s.
Nakayama: That is much older than I expected.
Ochiai: In Japanese companies, employees in other layers cannot move things into action at all. Young employees may be very capable and energetic, but there are no examples of success. Meanwhile, employees in their late 40s and older have positions that are too high, causing others to shrink. Therefore, the right key people for collaboration projects are employees in this layer because they can make decisions and other members feel free and flexible when working with them.
Nakayama: I see. So, let's go on to Theme 2. I'd like to go into some detail. In an era in which effective use of data increases competitiveness, I want Japan to be the country that uses data more freely and effectively than all other countries. What do you think we should do?
Ochiai: It is not just about data use. The Japanese government has a completely divergent, compartmentalized bureaucracy; therefore, they will have difficulty in the future as well. I serve as a member of a Cabinet Office project, but the bureaucracy still wants to design the same ecosystems as in the past.
Nakayama: The same ecosystems as in the past?
Ochiai: They want to do it in the same way as they did in the past. This is natural in terms of being their habit, but as I said at the start of my presentation, we must promote policies that are completely different than those of the past. That is why I think the government needs to change significantly, too.
Nakayama: I see. Let's finish with Theme 3. What do you think about the work style innovation boom?
Ochiai: Do you mean the one about shortening working hours?
Nakayama: No, I do not think that is what it is about, but people somehow seem to take it that way and focus on reducing the number of working hours... I feel something is wrong.
Ochiai: Isn't it said, "The younger you are, the harder you should work"? I think that is wrong. Half work and half play are okay for young people.
Innovative ideas do not come only when one is working; rather, new business ideas can arrive while playing. Though diversity is said to be important for organizations, it is also important for individuals.
Therefore, it is better to have various experiences and spend time in various ways. In a sense, it is good to secure more time through work style innovation. However, people do not know how to use the extra time generated by reducing the number of working hours. That is the problem.
Nakayama: I agree. People have not considered substantial issues, such as what they should do to create new value after changing their work styles and improving efficiency. Herein also lies the key to corporate revitalization, does it not?
During the session between Dr. Ochiai and Nakayama, Tamura Kai of Fujitsu Design made a graphic recording to visually record the discussion content in real time. After the presentation, the audience reviewed the presentation while viewing the graphic recording. "I hope this graphic recording helps you to review the content and deepen your understanding immediately after the presentation to make it more memorable," said Tamura. After the presentation, many visitors took photos of the graphic recording, commenting that it was enlightening. This session helped raise awareness about the future of Japan and companies.
(Interviewed, compiled, and edited by Tsuyoshi Kimura; photographed by Koichi Kitayama)