Millennial Companies Decide for Themselves

Hello, I am Mitsunori Kimura, an expert in Smile Engineering. Please see this article for more on "Smile Engineering."

The famous British historian Arnold J. Toynbee explained that it is not the difficulties themselves that destroy a civilization, but rather that when a civilization can no longer

respond to those difficulties on its own, it begins to decline.

I believe this applies directly to modern corporate management as well.

Companies that cannot decide things for themselves will decline.

In this article, based on this fact, I will unravel how companies should exist in the digital age.
Please be sure to read until the end.

DX is about changing management itself

I think there is a lot of talk about promoting DX (Digital Transformation).
I also provide a lot of DX support.

As for what DX is, the Ministry of Economy, Trade and Industry defines it as

utilizing data and digital technology to transform products, services, business models, operations, organizations, processes, and corporate culture based on the needs of customers and society, in order to establish a competitive advantage.

In other words, DX is not something that can be achieved just by eliminating paper, introducing systems, or using AI.

DX is a
management reform that determines what a company values, what it changes, what it protects, and whose smiles it will increase.

That is why you must not leave DX entirely to vendors.

Of course, the power of experts is necessary, but entrusting everything—your company's operations, relationships with customers, the pain points on the front lines, and the values you want to leave for the future—to outsiders means you are leaving the fundamental aspects of your company to others.
This will cause the company to lose what is most important.

The Edo period, which lasted a long time through its systems

The Edo period lasted for about 260 years.

Of course, there is no need to idealize the systems of that time as they were, but there is meaning in thinking about why it lasted so long.

The Edo Shogunate established a system to connect the center with the regions and control the daimyo through practices like sankin-kotai (alternate attendance).
Also, they did not completely close off relations with the outside world, but managed them through limited windows.

Rather than rejecting the outside entirely, they designed their points of contact with the outside themselves.
While maintaining internal order, they managed necessary information and trade.

This also applies to DX.

It is fine to use AI or utilize external talent.
However, you must not let go of your company's own judgment criteria.

Japan, which has continued while changing

The country of Japan has also continued to change significantly throughout its long history.

We adopted kanji and Buddhism from the continent.
During the Meiji era, we boldly learned Western systems and technologies.
After the war, we also significantly changed our social structures.

Even so, Japan has continued to be Japan.

This is not because we changed nothing.
It is because we did not simply swallow what came from the outside,
but translated it into a form that suited us.

A thousand-year company is the same.

We protect our philosophy. We change our methods. We protect our credibility.
We change our tools. We protect our stance of valuing people. We evolve our systems.

Companies that can continue to make these judgments for themselves will last for a long time.

Data is a mirror for a company to see itself

To decide for yourself, you need to know the state of your own company.

What is happening with sales?
Where is the front line struggling?
What are customers having trouble with?
Which tasks have become dependent on specific individuals?
Where is information getting stuck?

If you cannot see this, management will rely solely on intuition and experience.

Intuition and experience are important, but in an era of rapid change, that alone is not enough.
Data is a mirror for a company to see itself.

However, data must not be used to assign blame.
It is important that inconvenient facts are visible,
that the true feelings of the front line emerge,
and that we improve systems without blaming people.

A self-propelling thousand-year company

The ultimate goal of DX is to become a company that can propel itself.

We receive support from external experts.
We borrow the power of side-job talent.
We utilize AI.
We build things together with system companies.

However, in the end, we must be able to think for ourselves,
fix things for ourselves,
and evolve for ourselves.

We can cycle through small improvements on the front line.
We can look at data and make decisions.
We can use AI to optimize operations.
We can turn external wisdom into internal strength.
We can talk to vendors on equal footing.

Only when you reach this state does DX become a strength for the company.

Companies that possess a lasting structure, which I call "thousand-year companies,"
do not reject external power.
However, they do not entrust themselves entirely to external power.
They incorporate external wisdom and transform it into their own flesh and blood.

Becoming a company that chooses its own future

With population decline, the evolution of AI, labor shortages, institutional changes, and shifting customer needs,
companies are constantly faced with new challenges.

Will you be swept away by them?
Will you blame someone else?
Will you outsource everything to others?
Will you cling to the ways of the past?

Or will you think, learn, experiment, and change for yourselves?

This is where the future of a company diverges.

Summary

DX is a tool for a company to regain control of its own helm.
A millennium company is one that has continued to respond for a long time.
It is a company that continues to respond to change while holding onto its own philosophy.

Becoming a company that can decide for itself.
Becoming a company that can change for itself.
Becoming a company that continues to learn for itself.

Beyond that, the smiles of employees and customers will increase.

I believe this is what DX for a millennium company is all about.

Thank you for reading until the end.

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