Panasonic: The Largest Corporate Restructuring in History - Hardcover

Mcinerny, Francis

 
9780312371371: Panasonic: The Largest Corporate Restructuring in History
Hardcover
ISBN 10: 0312371373 ISBN 13: 9780312371371
Verlag: St Martin's Press, 2007

Inhaltsangabe

Describes the six-year restructuring that transformed Panasonic from a complex, tradition-bound organization into an effective, flexible company designed to adapt efficiently to the global competitive market, without resorting to an outside CEO. 25,000 first printing.

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Über die Autorinnen und Autoren

Panasonic is not about any ordinary restructuring. It is about a company of $72 billion in sales, employing 293,000 people around the world, the tenth largest industrial company not in oil or autos, whose thousands of products are so universally used that it may have more customers than any firm in history. Panasonic is so big that it is one of the few companies which has a product in just about every home and business in the developed world, has operations in almost every country in the world, and has a vast scope of markets--making everything from flat panel TVs to car audio and satellite navigation systems, even entire building systems and home interiors. Panasonic’s breadth and size combined made reorganizing the company incomparably more difficult than even the task that faced IBM’s incoming CEO in 1992.
 
Panasonic delves into how this great eleven-year restructuring (1995-2006) was accomplished without importing an outside CEO like Lou Gerstner. Panasonic was able to reorder a complex and tradition-bound organization in a country that is often thought, mistakenly, to deeply resist radical change, thus demonstrating how Japanese companies continue to adapt to the competitive forces roiling the markets around them. 


Panasonic is not about any ordinary restructuring. It is about a company of $72 billion in sales, employing 293,000 people around the world, the tenth largest industrial company not in oil or autos, whose thousands of products are so universally used that it may have more customers than any firm in history. Panasonic is so big that it is one of the few companies which has a product in just about every home and business in the developed world, has operations in almost every country in the world, and has a vast scope of markets--making everything from flat panel TVs to car audio and satellite navigation systems, even entire building systems and home interiors. Panasonic's breadth and size combined made reorganizing the company incomparably more difficult than even the task that faced IBM's incoming CEO in 1992.

Panasonic delves into how this great eleven-year restructuring (1995-2006) was accomplished without importing an outside CEO like Lou Gerstner. Panasonic was able to reorder a complex and tradition-bound organization in a country that is often thought, mistakenly, to deeply resist radical change, thus demonstrating how Japanese companies continue to adapt to the competitive forces roiling the markets around them.

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Chapter 1

On June 6, 1995, two managers from Matsushita Electric Industrial, one of Japan’s largest companies, visited Sean White and me in our offices in New York. Masayuki Kusumoto and David Chapin asked if we would speak at a July management conference at their U.S. headquarters in Secaucus, New Jersey, just across the Hudson River. Matsushita’s CEO, Yoichi Morishita, was coming from Japan for the occasion, and their U.S. boss, Kunio “Kirk” Nakamura, wanted us to speak. The subject was to be our 1993 book, Beating Japan.

We were worried about meeting Kusumoto and Chapin because our comments in Beating Japan about the staff at Matsushita’s Park Avenue showroom being hungover or worse were pretty hard hitting. We had not met anyone from Matsushita before and we expected a sharp response. The discussion went well for an hour or so and our seminar was arranged. Just before leaving, Kusumoto said that there was one more thing he would like to bring up: our comments in Beating Japan about the showroom. Out of his briefcase, he pulled a copy of a talk Kirk had recently given his management and pointed to what he said about our book. The page was too hot to handle. But, to our astonishment, instead of dumping all over us or slamming the company’s image doctors, he told his managers in no uncertain terms that there was something wrong with the system and that it must be fixed. Now.

Must be a different kind of executive, we figured.

Beating Japan had been ferociously critical of Japanese management styles, saying, in short, that most Japanese companies were designed to put too much distance between themselves and their overseas customers to engender any hope of long-term growth and profitability. Japanese companies were, for the most part, designed to maximize domestic customer input and to minimize, even extinguish, input from foreign customers. After a good run in automobiles and consumer electronics, the business model of an entire nation was bankrupt.

We reached this conclusion after nearly two decades in the telecommunications business. We built our first company, Northern Business Information Inc., into the world’s largest telecom market research house, which we sold to McGraw-Hill in 1988. (McGraw-Hill sold NBI on to Gartner Group some years later.) For several years, our biggest customer had been Japanese telecommunications giant Nippon Telephone and Telegraph.

While running NBI, we noticed something unusual about Japanese companies. The commonplace in telecom was that Japan was soon to emerge as the information industry’s dominant force. In the early 1980s we even published a research report saying this was so. Except that Japan didn’t become a dominant force. It didn’t become much of anything. The more we looked around, the more we noticed that apart from a few laptop computers and some very large machines, Japan didn’t exist in computing, or in microprocessors, and certainly not in software.

So we asked the question the other way round. Where was Japan succeeding in global markets? In cars, certainly, and in consumer electronics, but in little else. Why? Were its companies doing something right in a couple of industries, like cars and cameras, and something wrong in all the others? If so, what was it, and what could be learned from this? Were other companies around the world making similar mistakes or different ones? If we could map these distinctions, we believed, we could create a grid, or a lens, that would enable us to see the problem in its full set of dimensions and prescribe practical solutions to modern market challenges useful to CEOs the world over.

To add to our certainty that there was something to the Japan question, a cursory overview of Japan’s postwar history threw our inquiries into high contrast. Almost from the moment the Americans arrived in 1945, the Japanese authorities realized something that the North Koreans, Iranians, and other nuclear pretenders today do not: Japan was not defeated by the atom bomb but by the overwhelming force of cheap information technology that made the bomb possible. Japan moved immediately to secure its postwar position in the information world, pouring tens of billions of dollars in the following decades into computers, semiconductors, and telecommunications. Japan directed the capital budgets of the then government-owned Nippon Telephone and Telegraph, for many years the largest company in the world by market capitalization, into these core sectors.

At the same time government officials, whose “guidance” matters a lot in Japan, were said to have told Eiji Toyoda, the leading light of automaker Toyota, never to export cars. And told Soichiro Honda not to make cars at all. So why did they do well when so many infotech companies did poorly? For most Americans, Japan’s postwar misadventures in information technology are simply an example of government trying to meddle in the private sector, messing things up, and wasting taxpayer money. There is some truth to this, and many Japanese will agree. But it is far from the whole story, as we soon discovered.

The year after McGraw-Hill bought our company, we were approached by Nippon Electric Corporation (NEC), a client since 1976, and asked to go to Japan to figure out why the company, which had been a telecommunications pioneer practically since Bell invented the phone, was seeing its once-promising U.S. telecom business stall, then shrink, while competitors were growing fast in the decade of opportunity after the 1983 breakup of AT&T. It made no sense to NEC, and not much to us either, why an early leader in the United States should stumble so badly.

A bit of corporate archeology reveals that NEC was once part of the old Bell System that included the American company Western Electric (now Alcatel-Lucent Technologies) and the Canadian firm Northern Electric (now Nortel Networks). NEC was the first company to introduce computerized telecommunications products into the United States. But Nortel entered the American market after NEC and quickly pushed it aside. So, whatever the issue in the U.S. market was, it wasn’t being foreign. There had to be something else.

From our work with NEC, we learned a lot about the operations of Japanese companies. At NBI, we put all the companies we studied on a grid, comparing financials to financials, R&D organization to R&D organization, and sales structure to sales structure, and so on. When we plotted NEC on our grid, anomalies leapt out at us. Places where we expected a large organization, like sales, were tiny. Where we expected to see many fewer people, like R&D, there were lots. And there were equally curious overlaps—places where reporting structures were duplicated, even triplicated, when only one, and sometimes none, were needed.

From this work, we looked at other Japanese companies and quickly realized that NEC’s market share problems were common to many and that all the American hysteria in the eighties and early nineties about how Japan was about to roll over the rest of the industrial world, which we had helped foster, was grossly misplaced. Japan was in deep trouble.

Moreover, while the American press was working itself into a xenophobic lather about Japan, the view from Japan itself was quite depressing. Japan’s Dow, the Nikkei 225, peaked on December 29, 1989, at 38,916. That day the Dow was at 2,753. By the time Beating Japan was published in May 1993, the Nikkei was down to 19,590, having lost 50 percent of its value. By March 2003, when the Nikkei bottomed out, it had lost 80 percent of its value, which would be like the Dow falling to 550 rather than the 8,000 it was...

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Verlag
St Martin's Press
Erscheinungsdatum
2007
Sprache
Englisch
ISBN 10 
0312371373
ISBN 13 
9780312371371
Einband
Gebundene Ausgabe
Anzahl der Seiten
374
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