Panasonic aims to lighten the pull of its legacy

Like many large, well-established companies, Panasonic is in need of revitalisation. It’s a global household name that consistently ranks near the top of Campaign’s Asia’s Top 1000 Brands survey, but the chances are that the average consumer would struggle to define what it stands for, or what marks it out from a multitude of other consumer electronics names.

The company is well aware of this, and also of the growing threat from smaller enterprises that can innovate without first wading through multiple levels of internal politics. Thankfully, it has stopped short of trying to re-engineer itself as an actual “startup”—an impossible mission that Samsung announced to much bemusement last year. But Panasonic’s management sees empowering younger workers as key to becoming more competitive and evolving its brand.

What does that mean in practice? In March, Panasonic plans to present eight business prototypes at South by Southwest (SXSW), ask for feedback on them, and hopefully identify collaborators and advocates. The prototypes are the work of young developers under something called the ‘Game Changer Catapult’, an ongoing project unveiled last year to give younger staff members more of a voice. In simple terms, anyone with an idea is free to develop it and pitch it directly to senior management. For this initial round, judges whittled a total of 44 concepts down to eight.

Among the ideas are an ‘Ambient Media Player’, a premium narrowcast display system designed to connect artists and content creators; a nutrition management solution; a fermentation and food aging service; and an IoT-enabled sake cooler.

Open culture

Masa Fukata, director of the Game Changer Catapult, said the initiative is part of a bigger goal to create a more open culture within Panasonic. “At the moment, R&D happens in silos,” he said. “People don’t talk to each other.” To change that, he said internal marketing and communications has become a focus. He sees having staff from different divisions work together on projects and pitch directly to top management as an important learning process for everyone, including the management, who “tend to make decisions in meeting rooms”.

Panasonic is also looking for ways to work with other industries. Fukata says we participated in a workshop with an insurance company to generate new insurance ideas. What does Panasonic know about insurance? Not much, but Fukata sees value in combining ideas from different sectors as it “activates a different part of our brains”.

“We are trying to move away from being a legacy company,” Fukata said. “Showing our development processes outside before making decisions is a way to tackle uncertainty in the market. How to interact with the outside [world] is always an issue at Panasonic. The typical process is to try to perfect everything in-house…but we have become very conservative and tend to be late to the market. So we’re trying to learn to accelerate our activities and go to market more quickly.”

Fukata does not seem particularly worried about possible IP theft in unveiling concepts before they are finalised. “If they want to steal it, they can,” he said. “The biggest headache is making decisions late. If we’re too slow, we’re probably already defeated. But we think more positively—that if we propose something, people will come to us and people will be inspired.”

Challenge the old boys’ club

From a brand perspective, Fukata said he hopes to show that Panasonic is more than “an old-minded, traditional company”. This has important implications not just in terms of attracting consumers, but also in attracting the most innovative staff. With funding for entrepreneurs and startups still extremely limited in Japan, large corporations like Panasonic can play an important role in enabling talented individuals to develop new business ideas. Young people should not have to leave a company if they want to create something of their own, said Kosuke Suzuki, the project’s planning lead. He added young people should be encouraged to fight against the “old boys groups” that continue to dominate Japanese industry and government.

It’s unlikely that Panasonic’s Catapult and presence at SXSW will transform the brand overnight, but it’s a step in the right direction. Commenting on the move, Yo Basso, head of marketing at a major startup in San Francisco, said it appears sensible for “an established consumer electronics company that’s faced challenges growing and innovating outside of Japan”. But he added that a meaningful change in brand perception would require a company-wide commitment to innovation, non-linear, iterative thinking and youth development.

Citing the teachings of Morten Hansen, a management specialist and Professor at UC Berkeley, Basso noted that large companies such as Panasonic tend to be mechanistic, making it difficult to nurture innovation from within. Startups by contrast tend to be organic, enabling fast innovation and identification of opportunities. “The irony is, back when Panasonic was becoming Panasonic as we know it today, they had organic systems in place to innovate and grow,” he said. “Once you’re big and existing categories start to slow and you need to look for growth outside, the challenges can be significant.”

He pointed to Logitech, the Swiss computer accessories producer, as a company taking a noteworthy approach to a similar problem by separating its business into established, growing, and new categories without a market. The new category business units follow a different reporting structure and are managed by resident entrepreneurs.

Another potential way for Panasonic to revitalise its brand is to invest in startups directly, as companies such as Unilever are doing. “If they want to make a big splash, they should put their money where their mouth is,” said another San-Francisco-based tech industry observer. Setting aside a billion dollars towards funding startups would “give the public the impression they’re serious”, the source said. 

This article appeared first on Campaign Japan: パナソニック、レガシーからの脱却への挑戦