Japanese youth reshaping the future of big business

Chiaki Hayashi, co-founder of Loftwork Inc.

Last year Panasonic Corporation asked Tokyo based Loftwork Inc. to help them build a café in a trendy part of town. Panasonic wanted the café to give students a free coffee in exchange for their email addresses. They hoped to recruit some of them.

Loftwork designs, builds and operates trendy café workspaces, so designing another café wasn’t a problem. But what did Panasonic really want? Loftwork’s soft-spoken and charismatic co-founder Chiaki Hayashi asked.

One hundred years after Konosuke Matsushita founded Panasonic, management felt many of their employees were too ordinary. Their real objective, she discovered, was to recruit changemakers like Matsushita, in order to reinvent the company.

In 1918 Matsushita began Panasonic (formerly Matsushita Electric Industrial Co.) from his home where he initially made and sold a better two-way lamp socket. The 23-year-old lacked capital or experience. When he died in 1989, his firm was a sprawling $42bn enterprise. Besides enriching himself, Matsushita fulfilled a lifelong dream to improve the lives of ordinary people.

Since, the company’s fortunes have withered. Panasonic’s plan to build a café underscores a wider problem among many large Japanese companies—the inability to innovate fast enough in a more speedy and competitive global world. To their credit, big firms have begun experimenting with crazy ideas—like cafés.

After listening, Hayashi told Panasonic the obvious—their problem solving approach did not fit their purpose—and began formulating an alternative solution.

In truth, Hayashi isn’t only in the café workspace business. More than 100 of her staff work across multiple industries in what is in effect a small to medium sized creative lifestyle business. No single adjective sufficiently defines what she does. However, her passion is to help big companies. As well as Panasonic, big clients include JR East and Omron. Each seeks inspirational ideas to reinvent themselves for the 21st century.

Her proposed solution called 100BANCH is now operational. 100BANCH supports young people who work within teams on various projects. The teams, comprising entrepreneurs, designers, students and so forth, all aged under 35, are given free mentoring and workspace in a specially renovated complex called an “experimental district”.

100BANCH is unique because mentors and participants are selected in a non-traditional way. Hayashi eliminated consensus decision making to avoid group decisions generating average outcomes. Mentors decide for themselves which people and projects to assist. “I felt if a mentor thought a student interesting, for instance, that student might become the next Matsushita,” she explains. On the other hand, “If the decision is made by group consensus, it’s probably too late.”

Mentors are also selected in an offbeat way. Hayashi chooses independently minded mentors with unique and diverse backgrounds across all age groups. They specialize in microbiology, music, manga, the public sector, etc. Mentors range from their 20s into their 60s. Some are male and others female. “Mentors are ambitious, charming positive and strange,” Hayashi admits. Only one is from Panasonic.

One year after launching 100BANCH, the collaboration with Panasonic has not produced tangible results. However, a group of young and talented people work on more than 80 projects whose voices shine a light onto the shape of future business in Japan. Their inspirational ideas are not available from ordinary research reports. “They teach a lot about what the future will be like,” says Hayashi. “Panasonic’s challenge is to use this inspiration effectively,” she advises.

For example, one 100BANCH project is prototyping a system to raise crickets for food fisheries. Insects are high in food energy. The younger generation cares a lot about both food taste and sustainability. Panasonic may not be interested in going into the cricket business, but they do care about taste and sustainability.

The firm, which makes kitchen tools, including coffeemakers and rice cookers, naturally follows consumer trends. Increasingly, these are story based. Next generation consumers want to know the reasons for choosing a service or product. For example, young people care about where coffee beans come from. Sustainability and collaboration are equally important to them.

Last century was about processes, functions, features and closed innovation—when technological invention was the main driver of company sales. In some fields it still is. But in others “it’s not only about functions or features,” she says. “Were all connected, for example. So why don’t companies collaborate for everyone’s betterment?” she asks.

Indeed, they’re trying. Big firms are pouring money into Japan startup companies through their corporate venture capital arms. CVC investment almost doubled to 133.8 billion yen ($1.23 billion) last year. Just how they can leverage investments in startups remains to be seen. Through open innovation, “big companies are now learning how to do this. Panasonic is surely figuring it out,” Hayashi reports.

Young people—not only in Japan—are pressuring firms worldwide to pursue wider interests beyond generating shareholder profits. They believe firms should also invest responsibly and with social purpose. Japanese youth especially feel growth and endless consumerism is not life’s single purpose.

Hayashi thinks Japan is overly influenced by the growth message coming from the United States. “We admire the US a lot, but I don’t think that Japan can design the next Facebook” because “our character is different,” she believes. Japanese companies are good at making small day-by-day improvements. “I think that it is good enough. Why do we need to grow forever?” she asks. “That is the mindset of big Japanese companies. That’s what I love. I want Japanese companies to go back to their origins…to the founder’s will,” she says.

Hayashi views Japanese companies as social public platforms for making the world a better place. Managers want to improve the world just like Panasonic’s founder. They just don’t know how.

The left and right brained guru starts change management by recounting to company employees their founder’s stories about how the firm started. It’s not her message as a consultant, she tells them. It’s your own company founder’s message: “You love your founder, right? Then, why don’t you…”

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