Small Giant Strategy Born from Passion

The reference book for the July Jibun Inc. Business School, "Small Giants," truly feels like a book that describes the initiatives Mr. Kinoshita has been carrying out in various regions across Japan.

A characteristic of all the companies introduced in the book was that, in addition to numerical targets like operating profit, they prioritized non-numerical KPIs, and in return, these companies were able to gain "control" and "time."

In other words, as Mr. Kinoshita often emphasizes, when conducting any business, it boils down to "who you do it with is what matters" (something that only works because you have like-minded companions), and "being able to decide for yourself who your customers are" (not just chasing numbers).

Translating this back to my own main business, I am someone who is currently trapped in a KPI hell of numbers lol

In the automotive business, there are various KPIs, but among them, segment share and profit per vehicle model are items that are always a subject of debate within the company.

Even if we set a target for annual sales volume that exceeds the previous year, if the segment share (by model: sedan, SUV, etc.; by size: B-segment, C-segment, etc.) is lower, we are required to provide a corresponding explanation. In short, it is a pattern where the more KPIs you set, the more points of criticism increase, such as "Isn't the increase in volume compared to the previous year just because demand has grown, and not due to our own efforts?"

Regarding profit per vehicle model, in order to somehow move the plan forward, we sometimes set a higher composition ratio for high-end grades with larger profit margins within a single model to make the profit per unit look better. This is fine if the content (such as equipment improvements) matches the increase in the composition ratio of high-end grades, but if not, you will see hell when the actual results are revealed lol

〇 Who do you work with?

Danny Meyer, founder of the hamburger shop Shake Shack. He is a person who has appeared many times in Mr. Kinoshita's Voicy and was also featured in this reference book. What was impressive was the point: "I want to provide not just good service, but every consideration (here called 'enlightened hospitality'), and do my best to ensure that customers leave deeply satisfied. I hire people who have those qualities and abilities, that is, human skills, from the start."

The point is that while technical skills are of course necessary, they place even more importance on this psychological ability—how much one can think from the customer's perspective. I think this is a fundamental part of a person's character and not something that can be easily fixed. Regardless of the industry or the type of work, whether one can think about the pre-processes and post-processes of work and understand the feelings of the person who requested it and the person who was requested to do it—this is an element cultivated through the life that person has led so far, so it is difficult to correct. Aren't there people around you who are good at their jobs but lack a little consideration, and you think it's a bit of a waste...?

Even listening to Mr. Kinoshita's conversations with his travel companions and stories about work, I felt that because Mr. Kinoshita himself is conscious of "who you work with", the people who gather around him are all people who can see the big picture and act proactively without anyone telling them what to do.
I always thought this was true when listening to stories about sharing chores during Mr. Kinoshita's travels (shopping, cooking, washing dishes, etc., where tasks are naturally decided without any hitches). If you can't proceed smoothly with the arrangements for cooking, you definitely won't succeed at work either lol

I believe that only when there is a foundation where employees understand their own work, find it rewarding, care for each other, and can increase their loyalty to the company they work for, can they provide some kind of value to customers. Once again, I felt that "who you work with" is truly important, and if you make the wrong choice here, it will be irreversible.

〇 Being able to choose your own customers

McDonald's, the prime example of franchise management. It provides all the know-how, so it's a matter of following the rules and doing this. It is a quick way to provide uniform service with a focus on expansion and to chase numbers at any cost.
Japanese McDonald's has good service and a good image for families, so it is a little different from the positioning of McDonald's around the world, but even so, it is rare for people to say, "I was moved by McDonald's service!"

To chase numbers, it is essential to expand the network by increasing the number of stores. Without considering regional characteristics, products and services are increasingly standardized. I think that because of this standardization, the charm of the company is lost more and more.

That is why the companies introduced in Small Giants understood the range of choices they defined and clearly identified who their customers were. None of the companies thought about their business on a national scale, but were "deeply and closely connected to that region and had clearly narrowed down their target customers".

In this book, it was expressed in French as "terroir (=soil)".

"The flavor of food is influenced by the region's soil and climate (because mineral content of the soil, sunlight and rainfall, and plants unique to that land differ by region). The same can be said for business. Each region has its own unique personality, which becomes a kind of spiritual terroir. If you are deeply rooted in a region, it will have a major impact on how you do business."

Certainly, for companies that operate on a national scale, I think that is true in terms of having a common culture and rules and not eliminating variations.
However, to put it in one word, I think that is ""boring"".

Considering this point, I think there is infinite potential in Japan's regions in the future. There are not many countries that have such unique and individual different foods and cultures with a distance of just crossing a prefecture lol

The rest is how well companies in the regions can convey their regionality. Even if they have a history of over 1,000 years, if they cannot properly explain its meaning and value regardless of language, it means nothing.

In all the companies featured in this book, it is depicted that not only the CEO but also the managers and staff are working with "passion", and as Mr. Kinoshita always says, no matter how much logic you build, I realized that "in the end, it comes down to how much heat that person has when moving forward".

Alright then, let's do our best today too!