(4) Grand Design Thinking and Business Models - Hiroyuki Arai a.k.a. Pinky x Toshiaki Miyaki

(3) Grand Design Thinking and Business Models - Hiroyuki Arai a.k.a. Pinky x Toshiaki Miyaki continued.

Customers only talk about past and present issues.

Miyaki Regarding design thinking, I also believe it is better not to focus too much on current pain points. For example, in the case of the process innovation achieved by Ford in the past, if you try to empathize to solve the problems of 'people currently riding horse-drawn carriages,' you tend to focus on things like 'the vibrations must be tough,' 'it must be very hot in the summer,' or 'they would be happy if there were sturdier and faster horses.' This is missing the point, isn't it? To take it to the extreme, there are times when I think it is better to ignore pain points for a moment. Before looking closely at trivial, immediate pain points, if you can focus on the ultimate question of 'what do you want to achieve?', you arrive at the idea of 'comfortable and freer means of transportation,' don't you?

Instead of immediate pain points, based on a deep understanding of human beings, you should gain insight into what that person wants to achieve. In other words, I think what is important is the 'customer job' as defined in Jobs-to-be-Done theory. Identify the important job, and then look at the pains and gains related to it. I believe this order is important.

Pinky At an international urban planning conference held in New York in 1989, the topic of comprehensive urban planning was discussed, specifically how to deal with the 'horse manure' scattered all over the city. Since automobiles were not yet widespread, transportation was centered on horses, which made horse manure a public nuisance. Various experts, including biologists, urban engineers, technicians, and politicians, gathered to argue heatedly about how to solve this, but they couldn't come up with an answer.

What solved the social problem of horse manure was the 'advent of the automobile.'

If you start from the problem of how to deal with horse manure—that is, if you start from the pain—you end up talking about how to clean it up quickly, how to eliminate the smell, or how to reduce the amount of manure horses produce, and you never reach a solution. Because they were trying to solve it under the assumption that horses were a given, even when scholars and politicians gathered to discuss it, no solution emerged.

However, a different means of transportation, the automobile, and the removal of horses from the city became the solution.

If you start from the pain, you become trapped by it, and the range of your pivot narrows. If your thinking is based on the premise that horses exist, the idea of 'getting rid of horses' will never come up.

Miyaki There are quite a few people who think that design thinking is just 'meeting customers and listening to what they have to say,' but I always tell them, 'Don't become a mere order-taker.' You can't create a new business if you keep acting as an order-taker who just swallows what they are told and fulfills it.

Pinky The important thing is insight. The definition of 'insight' varies from person to person, but I replace it with 'latent needs.'

Going back to the Ford example, if you go as an order-taker, the customer will likely say things like, 'I want a horse that runs faster,' 'I want a horse that doesn't get sick,' or 'I want a horse that doesn't need to eat.' If that happens, Ford might have just improved the breed of horses.

Customers don't talk about the future, so even if you interview them, only past or current issues will come up. And what lies beyond that is nothing more than customer support. That, of course, is one important type of innovation in its own right.

Art thinking before design thinking

Pinky However, in order to create disruptive innovation, it is important to realize things that are outside of common sense after grasping the latent needs required there.

Therefore, what you should do is not act as an order-taker, but imagine or estimate what kind of insights or latent needs lie behind that. Just like a vision for the future, insights must ultimately be defined in a self-righteous way.

That is why art thinking is necessary before design thinking. Even though Picasso should have been seeing the same world as we do, he painted pictures like Guernica and established the painting technique of abstract art. In the same way, you must first use art thinking in the sense of 'defining how I see society.' Entering directly into design thinking and arriving at a great idea is... too much of a gamble.

Miyaki There are many ways and perspectives on how to generate innovation, but first, you have to be open to the possibility of creating a situation different from the current one, and you can't move forward without a 'hypothesis' that there might be such a way of doing things, right?

Pinky It is not about drawing a visionary picture or coming up with a catchy slogan; what is important first is to think about 'wouldn't it be nice if such a society existed.' And to keep thinking.

Miyaki It seems there are many failed cases of people who, without any of that and without any hypothesis, go to the customer empty-handed and say, 'Please let me empathize with you,' which is a form of relying on others (laughs).

JAPAN as No.1 Again

Pinky I come from the startup village and have never belonged to a large corporation, but I love large corporations, and that is why I do the work I do now. What I advocate is "JAPAN as Number One Again" and "Make JAPAN Great Again." How can we realize this?

Our generation just barely benefited from the period of high economic growth, so we can think, "I'm glad I was born in Japan," but if things continue as they are, our children and grandchildren's generation won't be able to think that way.

For example, the means we should take now is to emigrate overseas. Escape Japan. So, at the very least, I think it is a parent's duty to work hard, earn money, send our children to universities abroad, and create a situation where they can "speak English fluently and have a network all over the world."

But more than that, how can we leave behind a country where people can say, "I'm glad I was born in Japan"? Thinking about that, I decided that I wanted to focus not on startups, but on making large corporations innovative and sparking innovation from within them.

But that might not be something I have to do, and I don't know if it can be realized. However, it is something that must be done. I have a selfish sense of mission, and although I don't know if it can really be realized, I feel it is my destiny. Like, "I'm the one who will make it happen!" ...Is it suddenly sounding like a new religion when I talk about missions and destiny? (laughs)

Miyaki Everyone, this is a precious story. It's the Church of Pinky (laughs).

Pinky Well, whether or not you can draw a vision that allows you to talk about what you want to do with that much passion. This is truly the most important point.

Miyaki And it's not that it suddenly falls from the sky in a hot state one day, but rather that you meet various people, talk to them, and are told things, and I think it's more common to encounter something that makes you think, "Ah, this is it!" little by little. In fact, Pinky-san, you wrote in your book, "When I gave a lecture, people were happy, and I discovered that this kind of talk is well-received in large corporations," right? I think you were able to encounter your destiny because you had a high volume of actions and a wide variety of actions among them.

Pinky So, in that sense, I think effectuation is important. First, just try it. I think there are things you encounter by trying.

Large corporations are what move Japan

Pinky I tend to say yes without hesitation. Since I have always worked in the startup village, to be honest, back then, I looked down on people in large corporations. What is fun about getting on a train at a set time and heading to the office with dead fish eyes? Startups have a sharp increase in salary when you are young, so I thought, what is fun about being worked like a slave for such low wages? I emphasize that this is what I thought when I was young (laughs).

But when you properly understand society, you realize that it is indeed large corporations that move Japan. And when I came into contact with the people in those large corporations, I found that there are many excellent people, and many honest and good people. They have a very strong sense of learning, and they properly listen to the stories of a young person in their early 30s like me, who nobody knows where they came from. I am such a nobody that I have even gone to a large corporation for a meeting in the summer wearing an aloha shirt, shorts, and beach sandals.

I happened to have a connection and was asked, "Can you talk about how you create new businesses at a startup?" and when I talked about it, there was a need there. I was asked, "Can you do human resource development training?" and although I had never done it, I said, "Yes, I can," and did it. In that flow, I also designed business competitions and did mentoring, saying, "Can you do it?" "Yes, I can," and I was allowed to do it. By accumulating these things, I realized, "Ah, I didn't succeed as a player, but maybe I am suited to be a coach."

And as my contact with people in large corporations increased, I thought, "Large corporations are really interesting." They have a brand, technology, excellent people, and sales channels all over the world. But the only thing they don't know is the method of zero-to-one. There are many people who can take a 1 and turn it into a 10, 100, or 1000, but there is no one who creates from 0 to 1. If so, I thought that by taking on that role, I could make large corporations even more interesting.

Make "salaryman" the number one dream job for children

Pinky I also think, "I want to make 'salaryman' the number one dream job for children." "Being a salaryman is incredibly fun!" From the perspective of a startup, being able to receive a stable salary, not being fired even if you fail, and being able to take on challenges using a large amount of the company's money is truly enviable. Startups have to take on challenges while cutting into their life time and money and neglecting their families.

Miyaki I also feel sympathy for Pinky-san. I joined Konica Minolta three years ago, but until then, I had worked in fields other than large corporations, such as being in ventures and small-to-medium enterprises, or starting my own business.

If I have something I want to achieve in my life, it is to increase the number of children who think they are glad they were born in Japan. To that end, it's not just children, but everyone needs to be able to think that way. I have three children, and when I think about what my role is, first of all, I want to leave an environment where my own children can live with peace of mind in Japan.

When I think about that, there is almost nothing I can do as a single father. I have to involve more people around me. I don't know at all yet whether my children will work at a startup, get a job, or start a business, but no matter what choice they make, I want to leave an environment where they can live reasonably happily. And as an extension of that, I think it would be the best if I could provide possibilities and fun to all children.

When I think about it that way, the impact of large companies changing is also a hope that it will significantly influence the transformation of society as a whole, and that is one of the reasons I joined my current company. I want to revitalize large companies and show the image of many people, including myself, working vibrantly within them.

Innovation in Japan starts with large companies

Pinky It is said that the population related to large companies in Japan is 20% or even 30%. Of course, there are overwhelmingly more small and medium-sized enterprises, but in terms of the related population, Japan is still centered on large companies, so large companies must be energetic.

Steve Jobs wanted to be Sony. Japan is a country that was able to produce a company that Steve Jobs admired. So I don't think it's impossible for Japanese people.

Conversely, I think startups are difficult in Japan. When Japanese people start a startup in Japan, the market size is small, so the scale of an IPO is limited. That's why fundraising is small. While Japanese startups are struggling to raise 100 million yen, American startups are raising 5 billion or 10 billion yen and can step on the gas all at once.

It's difficult for startups, but large companies can make those decisions, right? So I think that innovation from Japan won't come from startups like in America, nor will it be led by the state like in China, but rather from large companies.

I want to have influence on politics someday. Instead of creating a Startup Agency, I would create a Large Company New Business Agency, and make any investment in new businesses tax-free. In exchange, I would raise corporate taxes significantly. Then, the decision would be to either invest in new businesses or raise employee salaries rather than paying taxes. If that happens, innovation will be born, and employees' salaries will increase. I think it's fine to raise corporate taxes even more. I'm troubled because there is no political party currently proposing that policy.

Miyaki Shall we start a political party together? (laughs)

Pinky Shall we start the BMIA Party? (laughs) Could you make part of the logo pink? (laughs)

Do you have any success stories?

Miyaki We have a question from the chat: 'You mentioned that you have only had failures so far, but please tell us about your success stories as well.'

Pinky I don't have any. (laughs)

I have managed to generate 500 million in annual sales, but it ended as a one-off project, and I hadn't thought about the strategy beyond that at all, so I couldn't lead it to a great success. It was just a lucky hit.

The common thread in my failures is that I fought with the president too much. I changed jobs 10 times by the age of 35, and my average tenure was barely a year. Based on my experience, people who succeed in new businesses have a very strong love for their company. Because their love for the company is strong, they can also talk about corporate fit, saying 'this is the business we should be doing.'

No matter which company I belonged to, I would end up liking the company more than the president, and I would repeatedly defy the president by saying 'what the president is saying is wrong' and then quit. This book is based on that reflection. It's about drawing a grand design and having a conversation with the president.

Miyaki You failed by insisting on how things should be done without a grand design. From that accumulation, you arrived at the point that a careful grand design that everyone, including the president, can agree with and empathize with is necessary.

Pinky Several people have told me that I am 'like a bulldozer.' I clear the path, but I move forward regardless of whether someone is standing there, and I even mow people down. There are many corpses lying behind where I have passed... (laughs)

Miyaki Sometimes a bulldozer is necessary, though. (laughs)

Pinky It's troublesome if you do it too much. Because you end up making enemies. In a startup, it's bad to make enemies within the company.

Another reason I decided to focus on large companies is that I got tired of the startup village. In startups, everyone holds each other's shares. Not only the founding members, but also those who join later have stock options.

At one company, I had stock options worth about 500 million yen if I didn't quit, but everyone in that company was really pulling each other down. If someone quit, they would have to return their stock options, and that share would be redistributed to everyone else. So, they would pull down the people who were actually producing results.

Miyaki　Wow...

Pinky　You have enemies inside the company. Of course, I don't think all startups are like that. But in reality, not only that, I've seen the dirty parts of dirty adults in various situations in the startup scene. That's part of why I grew to dislike the 'startup village' and escaped. ...I've gone off track.

Regardless of success or failure, the ability to involve others is definitely necessary. You also need the breakthrough power to act as the initial starting point, but you need others to follow. Even if you can be the first penguin, the business won't continue if a second or third penguin doesn't emerge. For that reason, you shouldn't neglect the ability to involve others.

When I made that 500 million yen in sales I mentioned earlier, I had built a proper team. I've also had plenty of experiences where I failed at team building and finding partners. I was able to raise a large amount of capital, but the reason it didn't lead to commercialization was because I couldn't become partners with the outside world.

Because I have such an intense personality (laughs), there aren't many people who are indifferent to me; they either really like me or really hate me (laughs). I think that's one of the reasons why I don't do well as a player.

Miyaki　It's common knowledge in the sports world that a great player isn't necessarily a great coach, but I wonder if that's the same in the new business world.

Pinky　At the very least, I wasn't a great player. Perhaps it's better for a coach to be this intense.

Miyaki　You can choose your coach, after all. In that sense, 'coaching' is a business model that can effectively absorb that intensity.

Pinky　I think it serves as a litmus test. Companies with executives who can't accept someone like me generally can't move new businesses forward (laughs). As a result, I've become a character that's convenient in that way. I even tell people, 'Please use me when you need a drastic remedy.' When that's not the case, other members handle it.

Miyaki　I don't have as strong a personality as you, Pinky-san, but I'm still thought of as a somewhat strange guy, so people tell me, 'Konica Minolta must be a really great company if they can put up with a guy like you for three years' (laughs). I'm not sure how to take that, but I'm a little happy. It's a complicated feeling (laughs).

Continued in (5)

Speaker Profile

Hiroyuki Arai a.k.a. Pinky

Curations, Inc. Director, CSMO / Executive Strategy Designer. Born in Yokohama, Kanagawa Prefecture in 1982. Graduated from the Faculty of Science and Technology at Meiji University. While in school, he gained experience as an engineer in website production, SEO engineering, and access analysis. He changed jobs to become a new business consultant for mid-sized to large companies based on technology and trends in the IT field at Archetype, Inc., and focused on launching new businesses at several mega-ventures such as GREE, Inc. Later, he served as CEO, CSO, and advisor at several seed-phase startups, handling management strategy, marketing, business development, and human resources. He founded Chigasaki Ventures LLC to support business strategy formulation for startups and new businesses of large companies from the outside. He joined Curations in August 2019 and remains in his current position.

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Toshiaki Miyaki (Representative Director, BMIA)

Business Development Group Leader, Konica Minolta, Inc.
CEO, Growth Works Inc.
Trained facilitator of LEGO® SERIOUS PLAY® method and material
6seconds Certified SEI EQ Assessor & Brain Profiler
Representative, Parent-Child Holiday Revolution
Mission: To increase the number of challengers in society by supporting them while continuing to challenge myself with innovation.
After graduating from university, he worked at a funeral home and pursued music activities before becoming a corporate sales representative at a trading company. From 2011, he achieved top sales for three consecutive years while also delivering results in internal business transformation (what is now called DX).
In 2014, he founded Discovery Resource Inc. as a drug discovery research support startup and became its Representative Director. The first domestic research support service adopted by major pharmaceutical companies is still in use today.
In 2019, he joined an education IT venture as No. 2, overseeing the corporate business division while working as a consultant and lecturer, dedicated to supporting the growth of people, organizations, and businesses nationwide.
Since 2021, he has served as the Business Development Group Leader at Konica Minolta, Inc. He is currently challenging the DX of the entire printing industry as an innovation originating from existing business divisions through the 'trinity development' of new business development, human resource development, and organizational development.
He has been a member of BMIA since 2015 and began working as a new business development consultant utilizing the Business Model Canvas and Value Proposition Canvas.
In 2016, he was selected for 'Shido 2016,' a global innovator development program sponsored by the Ministry of Economy, Trade and Industry. He honed his skills and mindset as an innovator and was selected as a member of the delegation to Israel after a final selection process.
Since 2017, as his life's work, he has been promoting 'Parent-Child Holiday Revolution,' a workshop program that supports parent-child learning and growth without sacrificing time together.
In 2019, he participated in and won the Grand Championship of the 'YY Contest 2019,' a social business design contest by Nobel Peace Prize laureate Muhammad Yunus. He was selected to represent Japan at the world tournament (currently postponed due to the COVID-19 pandemic).
In 2020, he founded the social business company Growth Works. As a lecturer, consultant, and facilitator specializing in innovation-oriented education, new business development, human resource development, and organizational development, he supports the growth of people, organizations, businesses, and local communities through training and workshops.
Books:
'Practical Book of Business Frameworks Overflowing with Inspiration and Ideas,' MdN Corporation (2020/7/28)
'Work Efficiency Illustrated Guide: Small DX to Start Today,' MdN Corporation (2021/10/22)