From the "Industrial Revolution Model" to the "Information Revolution Model" — The management shift
In the previous dialogue, I talked about the concept of Vision Thinking (link: Vol. 1). The element that has a large impact on implementing these measures in businesses is the change in the management model. Please take a look at the figure below.
The "Industrial Revolution Model" is the management basis particularly of manufacturing companies, especially in the "market growth phase." In a situation where demand can be created by providing value in the form of a new products or services to meet the world's unmet needs (*1), organizations unite under the clear vision of seizing the market. By increasing the efficiency of operations, you create value in accordance with economies of scale (*2). This type of management model is effective if you are aiming for continuous growth.
*1 Unmet needs: Potential customer demands or needs that have not yet been met in a company's marketing.
*2 Mass-production brings down the cost of production.
However, recently, I feel that we have been shifting toward the "Information Revolution Model." This means that as we enter a period where the "value" of everything is transformed into "information" such as knowledge, whether or not that information holds value to someone is less clear. Once this happens, a company needs to change its viewpoint. Instead of seizing the market that's in front of them, they need to come up with visions like "it would be fun if this thing existed" or "this is the ideal society we want to create," and create new value with users, competitors and partners. I think it's effective to take the stance that strategies will be created as a result.
A company may propose a view of the future that doesn't have value now but has potential. People then empathize with that and collective action is taken. I feel that what will ultimately function as a trigger for this are visions that should be handled in the Information Revolution Model of management.
What kind of social value can a manufacturing company create in the era of kotozukuri (creation of systems, stories and services)?
Unlearning the Industrial Revolution Model and obtaining the Information Revolution Model — or what you may call a new "OS" for an organization — is not an easy task. As the leader of an organization, I think Mr. Mori is concerned about this too. Mr. Mori, what do you think?
In the most literal sense, Hitachi's business is shifting from "mono (product) to koto (service)." I truly feel the difficulty in simultaneously realizing monozukuri (product manufacturing), which has proved a successful business model so far, and kotozukuri, which is our new focus. As Mr. Saso mentioned, I am struggling to find a way to update the minds of my employees in order to shift from vision creation as the goal to vision creation as the future ideal.
In addition to this, when we practice "Vision Design" with customers during our co-creation project, we need to carefully think about what will motivate the customer. If we fail to do this, as Mr. Saso mentioned, a situation where "the initial vision was great, but as it took shape, it became increasingly dull" will occur. Of course, such situations need to be avoided and we need to set realizable visions whose results can ultimately be achieved by companies. This has truly made me feel the importance of the process of vision creation, and I've realized that I need to focus on it more.
As a person in charge of R&D and design at Hitachi, until now, when we were focused on manufacturing products, all we had to do was to present the result of our research in the form of a product or an algorithm. However, in the era of kotozukuri, things are not as simple as this. For companies like Hitachi to smoothly shift towards the Information Revolution Model and provide value to society, what should we do?
Hardware will always be a part of society as long as it exists and there are people using it. I even think hardware exists as a lever for creating social change.
I believe there is a form of social implementation unique to such companies. Until now, there have been situations where hardware has proved valuable and then spread around the world. But from now on, how about thinking that things will go the other way round? In addition to this, when you work on a social issue that doesn't seem to have a solution, a chance for external collaboration will emerge not by presenting the economic value but just by raising the problem. I think this kind of situation will become more frequent. If you could draw out the motivation of "I want to solve this problem" or the potential ability of the people outside Hitachi, I think this is well-deserving of being called a social value. I think companies like Hitachi are capable of this approach — of presenting the system and implementing it in society.
After all, I think we are going back to the proposition of "What kind of action should we take for a business to be good?" For example, in the case of Social Innovation Businesses, I think a good situation for the business is "when you are bringing a positive change to society itself." If so, what kind of behavior modification should occur in society? I think we can start with this question. For behavior modification to occur, conditions such as an environmental change of those surrounding it and a change in customs are essential. If a story narrated by a company can change how people act, the story itself has the power to become a form of social value.
CEO/Chief Strategic Designer, BIOTOPE co., ltd.
Graduate of the University of Tokyo Faculty of Law.
Master of Design Methods from the Illinois Institute of Technology Institute of Design.
Mr. Kunitake Saso worked at P&G, marketing hit products such as Febreze and Lenor, before becoming the brand manager of Gillette. He joined Human Value, Inc. and took part in the launch of Sony Corporation’s Sony Seed Acceleration Program, before becoming independent. He specializes in the brand design of B to C consumer goods, and in the concept design and service design of high-tech R&D projects. He is the author of various publications including “Lesson in Design Thinking Taught at the World’s Top Design Schools” (Nikkei BP Publishing, 2020), “Vision Driven” (Diamond Publishing, 2019), “Vision Driven Innovation” (Nikkei BP Publishing, 2019).
General Manager, Global Center for Social Innovation
Research & Development Group, Hitachi, Ltd.
Masakatsu Mori joined Hitachi, Ltd. after obtaining his master’s degree from the Graduate School of Engineering at Kyoto University in 1994. As a researcher in the Systems Development Laboratory, he worked on new services and solutions using cutting-edge digital technologies. He was also a visiting scholar at University of California, San Diego from 2003 to 2004. After leading the Planning Office at the Yokohama Research Laboratory and Production Engineering R&D, he was appointed to lead European R&D as Corporate CTO as well as General Manager of the European R&D Centre of Hitachi Europe, Ltd. in 2018. He was appointed to his current position in April 2020. He has a PhD in Information Science and Technology.
Yukinobu Maruyama, host
Head of Design, Global Center for Social Innovation – Tokyo
Research & Development Group, Hitachi, Ltd.
After joining Hitachi, Yukinobu Maruyama built his career as a product designer. He was involved in the foundation of Hitachi Human Interaction Laboratory in 2001 and launched the field of vision design research in 2010 before becoming laboratory manager of the Experience Design Lab UK Office in 2016. After returning to Japan, he worked in robotics, AI, and digital city service design before being dispatched to Hitachi Global Life Solutions, Inc. to promote a vision-driven product development strategy. He is also involved in developing design methodology and human resource education plan. He took up his current position in 2020.