In the last issue, we provided some of the background as to why Switzerland has been ranked number one in the Global Innovation Index for 11 consecutive years. Japan is ranked 13th. In this issue, I would like to suggest some key points for Japan to become more innovative, based on the results of many meetings I have actually held with people working on new business and innovation in Japan and abroad.
Every month, I meet with people in charge of new business and innovation at more than 30 major domestic and foreign companies to exchange views on the challenges and prospects of each company. The most frequently asked question is: "How are your competitors working on innovation, and how are you actually partnering with other companies?" in the form of case studies. We rarely have the opportunity to learn about case studies from other companies.
When our Swiss office asks the innovation officers of leading European companies if they would like to hear about the successes, failures and challenges of their initiatives, the majority of companies are happy to respond. When we ask if we can share case studies with Japanese companies via the web or video, the answer is 'by all means'.
When asked why, they say they are happy if their experience can help other companies and countries, and if it can stimulate the ecosystem globally. They do not need company approval or review. They have their own discretion and believe that actively contributing to the global ecosystem will lead to their own development.
On the other hand, if you ask an innovation manager at a major Japanese company to share successes, failures and challenges externally, you always need the company's approval. The benefits must be presented and the content of the article or video must pass the company's strict checks, resulting in a case study that is not fresh, processed and edgy. The idea behind this is not only to maintain the company brand, but also to avoid external exposure of the company's failures and to avoid being compared with competitors. This is also quite understandable.
However, the reason why companies around the world are now turning to open innovation is because they feel that even large companies cannot survive in the age of VUCA (volatility, uncertainty, complexity and ambiguity) if only one company innovates on its own.
And in order to cooperate with each other, it is becoming the norm that companies should first contribute to the ecosystem. This spirit of contribution, of "helping someone, even if only a little", is the first step towards innovation that Japanese companies have always possessed.
It is also important for companies to change their internal structures by delegating authority to those in charge of innovation and allowing them to take action at their own discretion. A system in which only the minimum rules are set, the person in charge is given authority and a budget, challenges are supported, and the company recovers when failures occur is important for human resource development in the age of VUCA.
Japan has a well-established system of decision-making rules and approval systems to maintain quality. These rules are necessary to protect the company and employees, but they can also be double-edged. They are a hindrance to the early development of human resources who can try and error and promote agile practices in uncertain times.
In order for Japanese companies to become more innovative, let's first encourage those in charge to actively contribute to the ecosystem at their own discretion. There is a good chance that unexpected chemical reactions may be latent there.