Passing over the arctic circle aboard my favorite Boeing Triple Seven aircraft after a long journey to visit customers, prospects and the growing Steelwedge team across Asia and Europe, our Japan initiative is top of mind.
Spain is in crisis and the social tensions have only just begun. Greece is suffering with no solution in sight. German is powering forward. China expands. The Unites States is adjusting and muddles forward. And Japan? It is the nation that has suffered more knock-out blows in its long history than any other place on earth. Sometimes self-inflicted, sometimes not. And yet Japan has a long and profound history of reinvention.
A History of Reinvention
At the turn of the 20th Century, after centuries of total isolation, the Meiji restoration opened Japan up to the world. And within a few short decades Japan had not only adopted and internalized the greatest ideas of the West, but adapted and transformed these concepts in a meticulous and ingenious manner.
After rising from the ashes of the Second World War, in the course of three decades Japan one again reinvented itself – transforming its economy and people from colonial warriors into a finely tuned economic machine. By the mid-1980’s, however, the collective Japanese survival imperative was replaced by comfort, luxury and individual materialism.
And then came the crash of the Japanese real estate bubble, the rise of China, the global recession, and finally a devastating earthquake, tsunami, the most pervasive and devastating nuclear disaster in history, and a subsequent overnight loss of more than 30% of their productive energy capacity. So once again the island nation of Japan is in recovery mode.
With this recovery a legacy of Samurai stoicism, collective effort and ingenious adaptation has moved to the forefront. In steamy summertime Tokyo, offices are bathed in heat while air conditioning plants sit idle. Ties and jackets are gone – replaced by a sweaty and intense determination to overcome. Take a humid nighttime ride on the subway and you will encounter masses of driven workers dashing home after extreme days.
Can S&OP help?
But what does all this historic reflection have to do with integrated business planning and S&OP? Everything!
The rise of the post-war Japanese economy was fueled by ingenuity. Creative design coupled with manufacturing intensity become the heart of Japanese re-invention. Leveraging a phenomenal knack for adopting and then improving Western principles finely honed during the Meiji restoration, the Japanese became the world’s greatest export-driven machine. Think Deming.
Leveraging close-knit supplier relationships, a truly obsessive approach to efficient design, continuous improvement, and a collectivist yet decentralized approach, Japanese brands – Toyota, Toshiba, Sony, Panasonic, Sharp, Honda, Nissan to name a few — became household names.
And, what’s the problem now? The world economy has suddenly become more competitive, more interconnected, fast paced, and unpredictable than ever before. And Japan now faces competition from every one of its neighbors. Witness the rise of Samsung – trouncing its Japanese competitors in just about every business segment it has entered. And of course, there are many other examples – Chinese computer maker Lenovo quickly surpassing the former leaders of the consumer electronics industry – Toshiba, NEC, Panasonic and others. And, of course, there is the distressing case of Sony.
And what’s at the core of the survival struggles facing Japan’s most global brands? Peeling away layers of the onion, the root cause becomes apparent: a lack of Agility. Lenovo, for example, as a dynamic, aggressive, fast paced, and flexible organization has demonstrated its ability to quickly re-invent itself, collaborate across silos, rapidly adjust to new trends, take risks, re-plan, global teamwork, and quick course correction. All of these were characteristics were demonstrated by Japanese companies during the initial post ward decades but have been replaced by the creation of monolithic regional organizations focused on product allocation.
Changing the Status Quo
Japanese leaders are waking up and adjusting. And the challenge? Connecting Sales with Operations after decades of focus on growth and product. Connecting product development with customers and sales to ensure that supply is consistent with demand. Collaborating across regions after decades of regional isolation whereby the European, Asian and American divisions of Japanese conglomerates operated in isolation.
How is Japan to proceed? The next economic renaissance in Japan will require Japanese companies to couple native ingenuity with the kind of global planning agility that companies such as Samsung, LG and Lenovo have amply demonstrated.
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