Jul 24, 2018

What Kinds of People Can Create Innovation in Large Companies?

Game Changer Catapult

What Kinds of People Can Create Innovation in Large Companies?

Game Changer Catapult is now marking its third year, and one of its main activities is the Business Contest. Through bottom-up efforts, this contest encourages employees to take on the challenge of developing their own new business ideas. We decided to talk with an expert on how to develop star entrepreneurs with a focus on human resources.

Yoichi Aso was invited to visit Game Changer Catapult. As a serial entrepreneur at Recruit Holdings Co., Ltd., he launched a number of new ventures, including an in-house business development program and a startup company support program. Then this spring, he struck out on his own and founded Alphadrive Co., Ltd., which provides support for new business creation within companies. As an original member of Game Changer Catapult, Kosuke Suzuki has been engaged in planning and running the Business Contest, while mentoring employees who are working on new business ventures. Aso and Suzuki met for a conversation about the kinds of human resources who can create innovation in large companies.

With training, anyone can become an in-house entrepreneur

Suzuki: When creating a new business, I believe the most important factor is the people. Obviously the skills necessary for starting a new business are quite different from those that employees acquire during their usual training in a large company. It is like being a baseball player and then deciding to learn soccer. I think our biggest challenge is how to develop or transform human resources.

Picture of Mr.Suzuki_鈴木氏の写真1.JPGKosuke Suzuki, planning leader for Game Changer Catapult

Aso: I always say that every employee can be turned into an in-house entrepreneur. I believe that anyone can develop the skills needed to start a new business. Just as new company recruits will become salespersons or engineers during the course of their first three years, if you create the job category of new business development, and if you provide training for this job type just as is provided for existing categories, anyone can become an entrepreneur after a certain period of time.

Picture of Mr.Aso_麻生氏の写真1.jpgYoichi Aso, President & CEO, Alphadrive Co., Ltd.

Suzuki: What training methods are needed and what should be emphasized during the training?

Aso: New business development is not actually defined as a job category, and often senior managers do not really know what it is. However, those working in existing business areas tend to think that they can also work in new business development. Therefore, in order to get results quickly, we are apt to take brand new hires who do not even know how to properly exchange business cards yet, and to say to them, "Let's try and get a huge order!" When they come up with proposals, we may ask them how much they think they can sell. That's what not to do.

Suzuki: Employees need to go through a proper training process.

Aso: As a matter of fact, it takes about ten years for a business created from scratch to become fully established. That is the amount of time it usually takes before a company is listed on the stock exchange. Therefore, I think that it is important for senior management to understand the timeline involved. However, if a large company cannot wait ten years, it can utilize some of its advantages as a large company. For example, when the startup is in its third year, it can achieve a huge jump in sales by launching products internationally through the parent company's global sales network. It is good to remember that the ten-year timeline can be shortened through the well-timed utilization of the resources of established business areas.

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One advantage of large companies is that they have numerous people in many different job type

Suzuki: There are many people in a large company, performing various types of jobs. This is especially true with Panasonic, where we have designers, sales people, and engineers. If they are so inclined, employees can get a variety of job experiences in the same company. Doing this can also help them come up with various ideas for new business ventures.

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Aso: That's right. It is also very advantageous if you can create a team of various outstanding human resources from inside the company and assign them to the optimal positions. For example, when marketing personnel are needed, get the assistance of about 5% of the people from a certain department who are able to do marketing. If you want to make a beauty-related product, but your business division has no such knowledge, you can go and talk to a team with a high level of beauty-related expertise. Being able to do this is a huge advantage for those in a large company with many employees in various lines of work.

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Preventing failures in team creation

Suzuki: As you say, anyone in the company can become an entrepreneur, but are there certain people who are especially suited for it?

Aso: If you define new business creation as providing new value to the world, then those who work hard for customers are the ones who make the best entrepreneurs. They are the ones interested in helping people rather than advancing their own careers. I think new business creation is especially suitable for those who joined the company with a desire to make the customers they deal with happy.

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Suzuki: While certain people may not have a strong customer orientation or a desire to make something new, they might have very high operational abilities. When such personnel start visiting customers, very positive developments might begin to take shape. So, by slightly changing the outlook of people who are considered to be aces in the company, even if they might not yet be interested in new business creation, I think they can become very powerful in the creation of new businesses and value. I spend a lot of time looking at how to attract such people. It can be quite difficult to change people's outlooks.

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Aso: If the leader of a new business places top priority on customers but cannot write a business plan, hedge risk, or manage production for example, then I think it is important to also bring in operational aces. However, it is very important that they be supportive of the business's core beliefs and the aims of the project. By selecting people only based on skills, outstanding human resources are apt to reach a definite conclusion. If a potential team member is only concerned about profitability, efficiency, and investment recovery, then new business ideas can be killed instantly, and that's not what we're trying to do. The team needs to be unified when they visit the customer, in order to make progress by changing both product form and business model. So, the most important thing when building a new business team is not only skills, but also bringing people together based on shared vision and goals. If this kind of team creation process is not followed, problems will surely arise.

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Suzuki: I agree. There is also another point to consider when trying to promote new business creation within an organization like Panasonic, which has tens of thousands of employees. If you build a great team and get it working, even if it breaks up after a few months or years, the experience should prove to be very useful later on. Ace employees come and participate in a project, share a common goal, work to create new value, and strive to benefit the customer, before returning to their original departments. Looking at it from a long-term perspective, I think this kind of activity is very important for a big organization.

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Sparking passion and motivating more people to take on challenges

Suzuki: Now that Game Changer Catapult is in its third year, we want to increase the number of participants in the Business Contest.

Aso: Generally, in the first couple years of this kind of contest, all you need to do is reach those employees who already have a secret desire to start a new business. Since this pool of people is usually gone by the third year, you then need to focus on activities that can spark the interest and motivate people who have never considered starting a new business. All kinds of activities need to be enthusiastically promoted, such as training, study sessions, workshops, and events. Study tours are also a good idea, where participants visit a remote island or places like Cambodia.

Suzuki: We hold seminars, study sessions and workshops, but we have never tried a study tour, which sounds interesting. What about places like Estonia or Israel?

Aso: Instead of a fact-finding tour of successful startup locations, it is more like a retreat. This allows participants who have visited workplaces with deeply rooted problems to find the passion within them. If you visit Estonia or Silicon Valley, your awareness can be raised, but it is not the same kind of motivation. Rather than having participants think, "I really have to apply to Game Changer Catapult and propose my business idea!", we think we had an outstanding experience.

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Suzuki: I see. I guess the issue with large companies is that they do not provide employees with chances to fuel their passion. Currently, we do not offer opportunities for employees either to experience the wider world, or to visit workplaces where issues are deeply rooted.

Aso: When you take people to workplaces where issues are engrained, you have them feel like they personally need to do something about the problems. It is also important to create opportunities for positive and passionate people to meet both in and outside the company.

Suzuki: That's right. I think we also need to be more proactive in sending out information about people who are really doing great things. When it comes to raising the passion level, do you take different approaches for younger and older employees?

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Aso: While it is relatively easy to motivate young people, you need to do a little more work to help spark the passion of veteran employees. The process of bringing together passionate veterans is the same as for young people, but the tendency for passion to cool in veterans is the number-one barrier to success that needs to be eliminated. Even when you have assembled a team of passionate people under a project mission and say, "Let's do it!", if the ladder has been removed many times in the past, the participants won't believe in it anymore. Therefore, it is important to stress to the participants that this time will definitely be different and make a commitment. Only then will the participants have confidence in the project. Being able to instill this confidence is critical.

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Suzuki: To be sure, older employees have experience, and they are able to clearly see the essence of things. This is something that I am amazed by. However, the challenging thing with younger people is that while they find their passion quickly, they can also lose it easily. Even if it takes a while for a veteran to become passionate, they seem to maintain that passion once it is lit.

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Aso: It may not be a question of their youth, it could be that some younger employees have still not found the thing or project that they are passionate about. In that case, they may want to search more widely. As an advisor to Game Changer Catapult I would like to offer as much support as I can for your various activities, and help you build a successful program.

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Special thanks to Alphadrive Co., Ltd. https://alphadrive.co.jp/

Profile: Yoichi Aso

Founder and CEO, Alphadrive Co., Ltd.

Co-CEO (Management / Finance), Genome Clinic Co., Ltd.

After joining Recruit Co., Ltd. (now Recruit Holdings Co., Ltd.), Aso started up an IT business subsidiary (Nijibox Co., Ltd.) as its founder and president. Once the business had expanded from zero to 150 people under his leadership, he was put in charge of the business incubation department at the Recruit headquarters. He launched an in-house business development program, Recruit Ventures, and a startup company support program, TECH LAB PAAK. After providing support for about 1,500 in-house projects and the incubation of about 300 venture and startup companies as the executive in charge of new business creation, Aso decided to become a fully independent entrepreneur. In February 2018, Aso founded Alphadrive Co., Ltd., which provides support to large companies creating a business incubation platform. In April 2018, he also co-founded Genome Clinic Co., Ltd., which provides genomic DNA analysis for medical treatment.

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