Panasonic makes game-changing efforts to innovate

Marina Kaji (left) and Sayaka Matsuo (right) pitch the Kajitrainer at Slush Tokyo 2019

The gray-walled silent corridors were ominously foreboding. I had come to visit the man tasked with jump-starting creative innovation at a large Japanese consumer electronics company. The building’s ambiance otherwise projected values of a big bureaucratic organization. The elevator décor proved no more uplifting. Surprisingly, on arrival the doors opened to reveal a modern startup workspace.

A few weeks earlier I had watched young entrepreneurs pitch new digital ventures on a small stage tucked in a far corner at Slush Tokyo 2019 where anybody could pitch their idea. Some presentations were slick. Many were amateurish. Few, if any, would likely become disruptive game changers.

Stepping onto the stage, Marina Kaji (above, pictured left) put her best foot forward to demonstrate the invention which bears her surname (and which coincidentally means “housework” in Japanese) called Kajitrainer. Kajitrainer is a floor duster with an inbuilt motion detector. The product monitors a user’s movement and gives real-time verbal advice to encourage healthy exercise while doing housework. To her right, Sayaka Matsuo explained to the audience that intended users are elderly people who would otherwise not get proper exercise. Arguably, aging societies need such silver products.

While not convinced Kajitrainer was a game changer, neither did I wish to assign it to the dustbin. So after the pitch I made a beeline to Kajitrainer’s booth, nestled among similar startups within exhibition space kindly provided by Panasonic Corporation. “How possibly could two young female entrepreneurs make a success of an interesting but seemingly non-disruptive product in Japan?” I wondered. The answer took me by surprise. Kaji and Matsuo, I discovered, were not entrepreneurs. They are intrapreneurs working at Game Changer Catapult, Panasonic’s in-house innovation accelerator.

Both had joined Panasonic’s home appliance division at the same time after graduating from university two years earlier. They had both majored in medical fields, one as a technologist and the other as an instructor. As students, each had witnessed the pain elderly people experience because of declining health. Some elderly people expressed the wish to die early, to not burden their families. “Those words were painful for us to hear,” says Matsuo. So she and Kaji wanted to develop a product to keep elderly people active and healthy. After joining Panasonic, they dreamed up their new idea and then applied to join Game Changer Catapult.

Launched in 2016, Game Changer Catapult aims to create and speed up new business formation, working with business champions both inside and outside Panasonic. From their second year onwards Panasonic employees can apply to start new businesses through Catapult. More than 120 product ideas have been produced since the program launched three years ago. Only the best are showcased at events like South by Southwest (SXSW) in Austin Texas and Slush Tokyo. Kaji and Matsuo were among those selected.

Catapult team members remain full-time Panasonic employees, devoting 80% of time to their regular jobs and 20% on new ventures. Kaji, for example, is responsible for marketing stove-top ranges domestically, while Matsuo is a product planner for refrigerators sold in Latin America. They don’t receive any equity at Catapult but do gain valuable startup experience early in their careers.

Back at their office, I am joined by Masa Fukata, Catapult’s director. I ask if it is reasonable to expect Panasonic employees to launch new products, when devoting just 20% of their time to Catapult? “They can overcome difficulties with passion,” he says. “Won’t their regular jobs suffer?” I further ask. “They have to work more efficiently,” he advises. Panasonic provides engineering, sales, accounting and other support services to reduce their burden. Intrapreneurs also receive mentoring. “But at first they must develop their own business model,” he explains.

Panasonic also creates new businesses working with people outside the firm. It does so by investing in entrepreneurial startups through BeeEdge, a joint venture between Panasonic, US based Scrum Ventures and TOKYO Innovation Network Corporation of Japan (INCJ), a government funded public-private agency.

The corporate venture capital company, of which Fukata is a director, makes early-stage investments in startups in Japan as well as overseas. Panasonic employees with good startup ideas which don’t fit into Catapult’s program are sometimes seconded to BeeEdge. If their venture succeeds, entrepreneurs stand to earn a capital gain. “They can always come back to Panasonic if it fails,” he assures.

Fukata is passionate about his mission. “We encourage young and top people within the corporation to work together both inside and outside Panasonic,” he says. “Eventually, this will change the corporate and industry culture of Japan. Then we can encourage innovation to compete against other countries,” he suggests.

It is a huge undertaking. Transforming Panasonic into a world-class innovator requires company-wide adoption of intrapreneurship at all levels of management. Yet cultural change occurs slowly at best, if not only because employees with vested interests resist change.

To their credit, Panasonic is moving away from seniority to merit based pay. The firm no longer exclusively hires new graduates. And it has launched Catapult to accelerate innovation and start new ventures. Still, Panasonic’s top management positions are mostly occupied by the older generation. There are few reported examples of recent AI technology graduates in jobs of authority and high pay. As at other big Japanese firms, startups likely perform poorly after being acquired, when unhappy founders unwilling to adopt traditional management ways choose to quit their jobs.

While making positive strides, it may make take a generation or more before Panasonic achieves game-changing success.

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