In his book The Mind of the Strategist, Kenicihi Ohmae claimed that successful strategy has more to do with a particular mind-set than cold analysis.
The 1990s promised so much for Japan. Buoyant stock prices, soaring property markets and a strong yen as the decade began provided a cruel illusion of future prosperity. Japan's economic woes since then have made talk of 'imitating the Japanese' unfashionable. It all seemed so different back in the 1980s when everyone wanted to know the secrets behind Japan's drive toward global economic dominance. Luckily, Kenichi Ohmae was on hand with the answers.
As a star performer at top management consultant McKinsey, Ohmae's explanations had more authority than most, not least because he was Japanese. The Financial Times described him as 'Japan's only successful management guru' and he had the added glamour of being a concert flautist, a trained nuclear physicist and a sometime advisor to Japan's prime minister Yasuhiro Nakasone. In his classic text, The Mind of the Strategist, he wrote of his popularity with Western business chiefs: 'Everyone thinks the Japanese possess some special magic that enables them to run rings around their competitors in world markets. (They think) I might whisper the secret formula into their ears.' But rather than make himself rich by concocting his own secret formula and peddling it to gullible westerners, to his lasting credit, Ohmae used The Mind of the Strategist to warn against hyping a 'Made in Japan' miracle of business strategy.
The Mind of the Strategist was translated and published in the US in 1982, some seven years after it was written. Until then, most Western corporate bosses remained indifferent to learning about Japanese ways of doing business, with oil crises and the Soviet threat more obvious causes for concern. Even when the Japanese competitive 'threat' became more pressing, understanding of its nature was limited. The importance of a job for life and the singing of the company song were stereotyped and elevated beyond their true significance. Ohmae sought to redress this imbalance and, in so doing, gave the Japanese 'miracle' a human face.
Intuition versus itinerary
He argued that much Japanese strategy was due to creativity and intuition, a far cry from the common perception of remorseless logic and detailed planning. Indeed, relative to many of the biggest Western businesses, the strategic units of Japanese companies were tiny: '(Japanese firms) have no big planning staffs, no elaborate, gold-plated strategic planning processes. Some of them are handicapped by lack of the resources ... yet they are still outstanding performers in the market place.'
By contrast, said Ohmae, in a controversial remark for the time, 'many large US corporations today are run like the Soviet economy'. These companies felt that they had to plan ahead comprehensively, controlling critical processes in every detail. Clearly, creativity and intuition get lost in these sorts of organisations. Ohmae noted that advocates of 'any bold, ambitious strategy too often find themselves on the sidelines, while the rewards go to those more skilled at working with the system'.
If creativity and intuition are the key, then the central thrust of Ohmae's argument is that successful strategies result not from rigorous analysis but from a particular state of mind. 'In strategic thinking', he argues, 'one first seeks a clear understanding of the particular character of each element of a situation and then makes the fullest use of human brain power to restructure the elements in the most advantageous way'. Brain power on its own is not enough. Hence, at the heart of a Japanese business, there is often a single, talented, forceful strategist, who has 'an idiosyncratic mode of thinking in which company, customers and competition merge'. These three C's, as Ohmae called them, are all important but, for the Japanese, it is the customer who has always been at the heart of the Japanese approach to strategy. Concern for the customer's needs is commonplace in the West today but back in 1982 it was less evident.
Four steps to success
An effective strategy, says Ohmae, is one by which 'a company can gain significant ground on its competitors at an acceptable cost to itself'.
He outlines four ways of achieving this. The first is a clear focus on the key factors for success. 'Concentrate major resources early on a single strategically significant function.' The second is to build on superiority by employing technology not currently being exploited by your rivals.
The third is to pursue aggressive initiatives that upset 'the rules of the game'. The final route is to make full use of what Ohmae calls 'strategic degrees of freedom', focusing on areas in which competitors are not involved.
Many of Ohmae's insights, such as customer care and a greater emphasis on creativity and innovation are now generally accepted. Doing things 'the Japanese way' may be unwise in terms of macroeconomic management but the country's corporate strategy remains sound. Ohmae's book shows us how Japanese we have all become.