Difference between ‘Manufacturing (‘Mono-zukuri’)’and ‘Story Telling (‘Mono-gatari’)’ for Customers


What is the ‘strength’ of Japan?  When asked many people say that it is ‘Manufacturing (‘Mono-zukuri’)’, ‘Technology’, or ‘Takumi no Waza (‘the Great Craftsmanship’).  However, I would say that they are important, but may not be enough to create needs, capture the hearts of customers to make them open their wallets, or develop new markets.  Here is where ‘The Creation of New Social Values’, in other words, exactly ‘Innovation’ of the global age is urgently needed as global competition.  This is the theme which I write about frequently and repeatedly in this site as well as elsewhere. (Ref.1; in Japanese) 

In addition, as Asia continues to grow, I don’t think that it is difficult or impossible for Asian people to catch up with and become competent in the skills of ‘Mono-zukuri’ or ‘Technologies’

Then, I ask you, what is the ‘weakness’ of Japan?

From my point of view it is, most of all, the drastic shift to Global World.  The world has transformed from ‘Trilateral Japan, U.S.A., and Europe’ to Global Market Economy in the last 20 years.  In such circumstance in the face of rapidly rising Asian economies in ever flattening world, is Japan able to build a great mid to long term vision, draft core missions with strategies, negotiate, and act?

It is also the power to understand customers and deliver them ‘stories’. (Ref.1; in Japanese)  In other words,  an ability to grasp the needs of the customers, to know them well, and feel as they feel (Ref.1).

Compare Japan with western countries or Asia, or Latin Americas in this growing global society.  How good is our organizations – are Japanese ‘leaders’ capable of creating good strategies, make quick decisions and act?  We must admit that these aspects are the ‘weaknesses’ in current Japan.  You have to think why? So, let us work hard and collaborate with our partners to move forward with speed to reach our common goals.

The Asahi Shinbun sends this message out clearly in its January 8th morning edition on 1st and 3rd pages, in an article titled ‘Excellent Technologies of Japan and the Problems They Face’.  My interview also appears in page 3 at the left bottom as a column. What I am saying in this column is basically the same as what I repeatedly write in my blog postings, but to have it printed in such a major newspaper makes me happy.  Compared to my site, newspapers can reach incomparably broader readers.

Korea wins the Nuclear power plant bid at United Arab Emirates – Part3


As a follow up of my report on the victory of Korea which I have been writing about in a series of Part 1 and Part 2, below are some interesting reactions of Korea, France and other countries

By the way, the person in charge of this project in Abu Dhabi referred to in my previous column (Part 2) is ‘Prince Mohammad’, correctly ‘The Crown Prince Mohammad’I have had the honor of seeing him twice in person sometime ago and just by listening to him I could clearly see his wisdom and intelligence.  This Crown Prince Mohammad is the person who is mentioned as the ‘top management’ in the comment #1 which I have quoted in my report Part 2.

As always,The Economist or Chuo Nippo of Korea (Japanese site) provide us with some movements.  How shocking it was for the French, the top of the world, is described in the report of ‘France 24’ titled ‘UAE nuclear deal: a French flop?’.  France has already started planning the next strategy  based on the analysis of this defeat.

Chosen Nippo continues to send us vivid reports and follow ups.  Here are some titles of the articles which I have quoted from the site.  I think Japan can learn much from this kind of information

Exporting nuclear power: Reversal after reversal, behind the scene of negotiation (Part 1); in Japanese
Exporting nuclear power: Reversal after reversal, behind the scene of negotiation (Part 2); in Japanese

Exporting nuclear power: Search for target after UAE, total war in opening doors of overseas nuclear market. (Part 1); in Japanese
Exporting nuclear power: Search for target after UAE, total war in opening doors of overseas nuclear market. (Part 2); in Japanese

Exporting nuclear power: ‘This contract makes Korea brother of UAE for 70 years’; in Japanese
Exporting nuclear power: ‘Impressed by Korean spirit of “let’s try and see”.’; in Japanese

A Glowing Achievement for Korea

KEPCO Clinches Mega Nuclear Plant Deal with UAE

Then, what are the reactions of Japan?  I have written on it in my earlier reports (1 and 2).  My advice is to learn from the contents in this Part 3 or elsewhere, compare and think hard.  Winning and losing is a part of competition, so reflecting and humbly learning from the experience would be the first step to next move.

I think that difference of top management of the organization; whether the leader is a ‘winner in tournament’ (basically, one who avoid mistakes will make it through) or one who ‘won in league’ (one who learn lessons from his/her defeats will climb up the ladder) will be clear and causes effects at situations like this.  Refer to books by Kazuhiko Toyama, ‘Yubi ippon no syunen ga shyobu wo kimeru (A finger-tip of obsession decides the winner), ‘Kaishya wa atama kara kusaru (A company will rot from the head)’ or Ref.1 .  People without any personal experience of fighting hard in their young age tend to lack spirit of learning lessons from defeat, or seeing chances for growth in defeat ? in other words, these people lack adventurous sprit, spirit of entrepreneur, value of‘nails that stick out’ (Ref.1, in Japanese)

For Japan that failed to grow and now suffered ‘lost 20 years’ after the bubbles, 2010 will without doubt be the crucial year.

Korea wins the Nuclear power plant bid at United Arab Emirates – Part2


What were the reactions to the victory of Korea in the international bidding on nuclear plant contract?  Here are some examples which I have gathered through my local sources.

1.  ‘The result was no surprise, but certainly was shocking.  Nuclear power project is accumulation of SYSTEM in every sense, and that Korea proposed a lower price by 10% and has won the trust of UAE suggests the reality of decline in competitiveness of Japanese industry.  Japanese industries stressed in their presentation only its high techs and quality of appliances, without any comments on the safety control of government or how capable Tokyo Electric Company (giant electric producing house of Japan) is in running the system, which was a sharp contrast to the overall aggressive presentation of Frenh team. The difference of their view (an ‘easy way’ of thinking based on the faith on their technologies) apparently caused a miss-match between Japan and the expectations of the customer (Japan has neglected the importance of building network of ‘personal connections’, which takes time).  This sort of difference was such that I hear some leaders of UAE have actually given advice to Japanese top leaders about it.’

2. ‘Whole Korea worked on this, by contrast.  I feel that we have to send young people to overseas and invite foreign talents to Japan ? this is, in my view, the only way for Japanese to recognize how fast the world is changing.  In fact my company also lost a competition for a mega project at Abu Dhabi to a Korean company.  We absolutely have to make people more international minded- which I believe that this is the key to the success of management in the future.’

3. ‘This success was not only good for strengthening ties between Abu Dhabi and Korean electric company but also in other fields (semiconductors, ICT, energy (Masdar), education, etc.)’

4. ‘People say that Korea was outstanding in following 3 ways on this bidding of nuclear plant agreement, that in fact the proposal was the State of Art; 1) Competitive price, 2) Shortest construction period, 3) Offer of support for education and human resource development in nuclear energy field at UAE ‘

5. The President of Korea, worried about the situation, sent a large mission to UAE, including the President of KAIST as the core member. KUSTAR (Ref.1), was designated as the only university in UAE to offer courses in nuclear energy.  This opened the way for Korean Professors on nuclear energy to visit UAE, and students from UAE to study at KAIST.’

6. ‘Korea was trying to see things as Abu Dhabi would see: it perceived the needs of Abu Dhabi, what kind of cooperation it was looking for.  Korea understood that human resource development was the key to survival for Abu Dhabi.  This is why Korea won the heart of the Crown Prince.  I understand that the Crown Prince and the Korean President became close enough to have direct conversation by cell phone (reference is available on Chosun online, as I have introduced to you in my column, part1)’

7. ‘Also, responding to a remark that ‘Korea is unable to produce all necessary parts or components of the nuclear power plants, so it must order them to other countries’, Dr. Myung Seung Yang, President of Korea Atomic Energy Research Institute (KAERI) commented that ‘In shipbuilding and semiconductors also, we don’t make them 100% domestically, but import necessary technologies from overseas.  What is important is the fact that Korea possesses the ability to design, run, and maintain those systems as a whole and export them’.’

8. ‘In contrast, Japan was dwelling too much on the special performance of parts, praising self as the ‘excellence in manufacturing (‘monozukuri’) giant.’

9. ‘I see clearly how Korea attacked Abu Dhabi as one nation.  Korea, confident after winning this bid in UAE, is now moving forward to other markets such as Turkey or Southeast Asia.  President Lee has experience of working for a construction company, so he seems to have giving advices in makings of the plan presentation to be submitted to Abu Dhabi and helping staffs to polish it.’

In contrast, the leaders of Japan was busy with the domestic issues following the Administration change to new political party, so there may have been a huge difference in the level of support by the government.  You can use this as an excuse, if you would….PM Hatoyama visited India at the end of the year and announced that ‘Japan will support nuclear plants in India’ (who advised to say so?), but obviously it was a bit late to notice the trend.  I wonder what sort of outcomes this comment is going to produce in the future

In India also, Korean business people (in Japanese) (Ref.1 in English) are known for their hard work, so even if we do have some technologies on clean energies, this does not necessarily allow us to feel safe.

To share this experience at UAE among government and industries, analyze the reason for defeat (Dr. Ikujiro Nonaka is also point this out repeatedly,learning from failures…), make good plans for the next step, and act ? this is most important.  I am writing this column precisely for this reason.

Basically, current age is not of ‘just manufacturing ability (‘monozukuri’)’, but of‘the entire story telling (‘monogatari’)’. (in Japanese).  Also, the time has changed to ‘Demand ? driven’ innovation.

Korea wins the Nuclear power plant bid at United Arab Emirates – Part1


In the end of last year, news that surprised the world came in.  There were some reports on newspapers about this international call for building and operating 4 nuclear reactors for the United Arab Emirates (UAE), and this had been quite a topic of the time.  Japan, France, U.S.A., and Korea raised hand.  Two joint teams of Japan and the United States; ToshibaWestinghouse and Hitachi - GE.  From France, Areva, the strongest  in the world (I think Mitsubishi Heavy Industries is in collaboration).  Korea was a new member in this Big Business.  Toshiba team retired early so there remained only 3 for competition.

And Korea won.

I wonder how shocking this was for Japanese industries.  France must have had strong confidence since President Sarkozy was involved actively in campaigning.  Naturally the result must have been quite a shock to France.  Some articles said that there is a chance for Korea because ‘Korea offers lower price’.  But this was not the only reason as you will see in sites which I quote to you below.

In Japanese:
Nikkei, Mainichi,Sankei, Reuter,

Asahi writes about Hitachi on its New Year issue.

On the other hand, let us see what is going on at the field, and how things are reported in Korea.  After all  it is a big news that calls for attention.

In English:
Reuters, Wall Street Journal, Korea Times

Japanese translation of Korean Newspapers:
The Chosen Nippo  (English version is The Chosun Ilbo)  offers a lively report in ‘Part1 and Part 2’ (both in Japanese.  For Japanese text in PDF, please refer to Japanese site of this posting.)

Chuo Nippo (English version is JoongAng Daily ) has several (Ref.1, 2)  (in Japanese) (Ref.3 ) (in English)

Editorial shows that Korea is not just rejoicing over the victory (in Japanese)  (Ref.1) (in English)

The point is how to handle and move this kind of National-level highly competitive projects.  There is much to learn from Korea.

A Happy New Year


After 50 years, the new Administration emerged for change, yet the issues to face are countless, and the world is going through a drastic change.
My wish for this year is that greater number of individuals will emerge in government offices, political arenas, business and industry, journalism, universities, science community, NPO, etc., etc. ? people with vision and action.

It is also important to step aside for a moment at times and try to see things from different perspectives, and see yourself.  As I have been pointing out every now and then, trying to see Japan from‘outside point of view’ (Ref.1), from the world or from Asia, is equally necessary.

With high spirits and firm vision of ‘Japan in the global world’, let us start year 2010, the year of great change, making it a year of hope in which each one of us will seek a bright future.