The recent advances in information technology have driven major progress in technologies such as AI and IoT, and the world is changing at an unprecedented pace. The accelerating speed of change in the business environment is causing business lifespans to become shorter. It has become vital for companies to create new businesses.
This is equally true for people. We are said to be in the "age of the 100-year life," so people must think about what it means to work over longer spans than they ever have before. It is important that they think about how to create their own opportunities to gain experience. That experience may be the key to creating new business.
ORIX has always listened attentively to its customers, anticipated their needs, and reflected them in its initiatives and services. It is currently gathering ideas from employees in order to generate new business that helps solve the problems faced by customers and society as a whole. This new project proposal system was launched in 2019.
Enjoying and Taking Great Interest in Work; Sparking Entrepreneurialism
Ishikawa: We're now in the third year of the program, which we launched in 2019. Having been in charge of the final judging rounds for the past two years, what are your impressions?
Akiyama: A lot of work has been put into each and every proposal. I'd always found that ORIX employees were brimming with a passion for taking on new challenges, and the people I've met through this project have fully embodied that image.
Matsuzaki: I think ORIX has always had a "culture of inquisitiveness." When employees encounter something in their work which they think is interesting, or which they're sure would benefit customers, they go ahead and try their hand at it. They all like new experiences, so we have a culture of having fun while we create new business.
However, the rate at which the market and external environment are changing has suddenly picked up over the past few years, making business even more difficult. Then, from 2020, we've had the COVID-19 pandemic, so I feel like having fun taking on new and interesting challenges has become much harder.
Watanabe: That said, if a company just sticks to its existing business, its future growth will dwindle. Even if it takes a long time for a new business to contribute to a company in terms of profitability, launching new businesses has a lot of qualitative benefits for companies, such as contributing to human resource development and fostering the company's culture.
That's why I want to kindle the spirit of entrepreneurialism that is in each and every employee.
Freely Coming Up with New Ideas that Fit Our Changing Times
Ishikawa: What kind of mentality or approach do you place great value on with respect to coming up with new business ideas?
Matsuzaki: I believe that if you fully leverage the expertise and assets found throughout the diverse businesses within the Group, there are no limits to the business ideas you can turn into reality. That's why I want employees to allow their minds to roam freely, using the seed ideas that occur to them in their day-to-day lives and work as starting points. That said, I also want the ideas to fit our changing times. That's why I want people to actively utilize the option of open innovation.
Ishikawa: What do you mean?
Matsuzaki: The world is changing at a dizzying speed. New services, technologies, and business models are constantly appearing. Digital technologies such as IT and AI are evolving at blinding speed, and technologies are also rapidly becoming more segmented. I think that we need to work with companies, organizations and individuals that already have advanced technologies to speedily extend our knowledge.
When planning new businesses, as well, I want them to go through numerous rounds of discussions with people both inside and outside the company to better refine the ideas. By collaborating with people in various industries, we can create plans that pave new roads into the future.
Watanabe: Novelty is also important. ORIX has expanded by building and expanding new businesses into adjacent fields. For example, our ship charter and ship broker service originally began with just ship leasing. However, a downturn in the shipping market led to leased ships being returned, so we used those ships ourselves to recover the outstanding loan balance. Through this, we built up expertise, and now we're engaged in a broad range of management operations, including maintenance and crew recruitment. We've steadily grown our business by expanding existing businesses into adjacent fields.
Now, though, what's needed is not expansion into adjacent fields but moving into outlying fields. Times are changing fast, and the problems that are being faced by our customers are growing more complex. To rapidly address those problems, we need to first create new ideas that directly solve them, and then to bridge the gaps between them and our existing business fields.
The Key Concepts of "Synergistic Innovation" and "Fan Stratification"
Ishikawa: Ms. Akiyama, you also have entrepreneurial experience. What tips can you share about creating innovation and new business?
Akiyama: Values are diversifying, which is segmenting the market. That's why it has become difficult to capture a large amount of market share with a single service or product. I think it's important to work steadily at creating new businesses that address the diverse needs of customers, even if the scale of each business is small, to steadily create more fans of our Group.
New business is created through synergy. However, if the company lacks expertise regarding any of the elements that are combined, this merely increases the risk of failure. That's why the key to success is to combine a field in which the company excels with a field that is somewhat new to the company.
Combining these elements creates new services, which can be refined through trial and error. You need to keep a close eye on how customers react, gradually improve the quality of services, and increase customer satisfaction. I think that kind of business cycle will be the blueprint for success in the future.
Watanabe: What about combining business segments? For example, in ORIX's case, combining the environment and energy segment with the automotive segment.
Akiyama: That would work too, of course. Normally, when a company becomes large, there is a tendency for it to become highly compartmentalized and rigid. In ORIX's case, though, there is a steady flow of human resources within the Group. I think this environment is highly conducive to synergistic innovation. ORIX does business in a wide range of fields, so I'm sure that in the coming era it will continue to provide services that offer all kinds of value.
Organizational and Personal Changes to Be Achieved in the Post-COVID Era
Ishikawa: Due to the COVID-19 pandemic, many companies are being forced to transform their business models. Staying a step ahead of market needs is a part of ORIX's corporate philosophy.
Matsuzaki: That's right. The post-COVID world will doubtlessly present game-changing opportunities. It will be difficult to survive without supplying services and products that meet the unprecedented needs that are being created by new ways of living.
Akiyama: Starting up new businesses requires resolve. Ideas alone are not enough. When you're pushing forward with new businesses, you'll often encounter obstacles. You get a keen sense of your own limitations. However, if you stay the course, never giving up, the road will open up before you. That passion and resolve isn't just necessary for the people and organizations creating new business, but also those that provide them with support. It's important to supply new businesses with the money and resources they need and to nurture them long-term.
Ishikawa: As you just pointed out, in addition to the importance of new business creation for companies, and the stances they take, it is also important to change mentalities at the individual level.
I think the concept of "experiential assets" will become a vital one for businesspeople. The lifetime employment system is becoming a thing of the past. We are now in an era in which people must create their own opportunities to gain new experience. The amount of experience they have will directly affect their own career development.
Belonging to a company yet coming up with new business ideas on your own and ten working to implement them will become an invaluable experience.
Watanabe: Today's discussion has impressed on me the importance of thinking about new business growth from both organizational and personal perspectives. I'll work harder than ever to provide support for the launch of new businesses. I hope to foster a desire among employees to keep coming up with new business after new business.
Matsuzaki: I have especially high hopes for the successes that will be achieved by younger employees. When it's an everyday thing for junior members to be saying, "This is really interesting" and their superiors saying "Then go for it," that's when you'll see people coming up with new ideas for solving critical issues faced by customers and new ideas that lead to the creation of new businesses. I hope that we'll be successful in creating that kind of atmosphere in ORIX even during the COVID-19 pandemic.
Ishikawa: I'd like to thank you all for sharing your ideas about new business creation based on your own individual perspectives. I hope that in the future, even more people decide to take on new challenges. Thank you very much.