Since October 2016, OMRON Corporation has been undertaking a business transformation project to fundamentally transform all business operations with the aim of responding to the peak season demand of patent applications and right-granting operations at the Intellectual Property Center.
Cambridge’s project manager, Mr. Hamamoto, is joined by Mr. Okuda, Mr. Shimosaka, and Mr. Ibata, who led the project as core members for OMRON, to discuss the first three months of the initiative (October to December 2016), which determined the fate of the project.
#01About OMRON Corporation’s intellectual property department
|To start off, please tell us about OMRON Corporation’s intellectual property department.|
|Okuda||The Intellectual Property Center is part of the Keihanna Innovation Center, the global core base of OMRON's R&D. Our operations include national and international patent applications, granting of business rights, rights utilization support, licensing, in-house intellectual property education and system development, and patent infringement responses. We work in four business domains: industrial automation, health care, mobility, and energy management.
The Intellectual Property Center consists of the Technology Promotion Division, Quality and External Affairs Division, Business and Education Division, and Business Support Division. The Business Support Division, which undertook this project, engages in application of national and international patents and logos, rights acquisition, and rights utilization support.
#02Crisis loom to meet peak demand with staff reduced by half
|Please tell us about the background that led to this business transformation project.|
|Okuda||Until fiscal year 2016, application and rights acquisition were carried out in each section, with a total of about 50 staff members. From fiscal year 2017, the work was consolidated into the Business Support Division, with 25 staff members, half of the previous year. This was due to our center's strategy to concentrate resources on strengthening priority initiatives and educating engineers.
Although the number of staff was halved, the number of applications was planned to increase by about 20% compared to the previous year. In particular, applications peak from January to March at the end of the fiscal year (the busy season), and 40% of the annual applications is concentrated in this period. It was clear that if we didn't take action by December, we would not be able to meet the demand at the end of the year.
Ibata led the efforts in transforming our business operation but it was difficult to overcome issues and resistance and to achieve consensus building without external help. Above all, “speed” was necessary to get ready by December. With this sense of urgency, Shimosaka and I started looking for a consulting firm for support.
|Shimosaka||This is a bit off-topic, but I used to study coaching. After transferring to the Business Support Division, I sensed a need to study business coaching again. In August, when I was looking for a consulting firm, my coach told me, “Summarize what you want to do in 30 seconds.” I remembered a recruitment advertisement for Antarctic expeditioners, which was said to have been published by British explorer Ernest Shackleton “Men wanted for hazardous journey”. When I looked it up on Google, that’s when I found Cambridge.|
|Hamamoto||Around that time Cambridge’s Masaru Shirakawa and Ryo Sakamaki was writing a book called “Business Transformation Textbook” (Nikkei Publishing) and sent an email out to the company looking for volunteers. The email was titled “Recruitment for Antarctic Expeditioner” and Shirakawa wrote about this in his blog, which Mr. Shimosaka found. By the way, I was one of the volunteers for the Antarctic expedition.|
|Shimosaka||When I read the “Business Transformation Textbook”, it contained tangible lessons from real experiences with difficult projects, and I thought, “This is the real thing.” Immediately, I called Cambridge and requested a meeting with Mr. Shirakawa. We met with three consulting firms in Tokyo but ultimately decided we wanted to work with Cambridge. After that, we quickly carried out internal administrative preparations, and in early October we started the project with Mr. Hamamoto.|
|Okuda||If there had been enough time, we may have been able to tackle the project on our own. However, there were only two and a half months left and we needed to start as soon as possible. Shimosaka and I kick started the project without properly communicating to the rest of the organization and as a result, Ibata, who was the leader of the in-house projects, was left confused.|
|Ibata||I was assigned as the leader of the new project, but to be honest, in the beginning I didn’t understand what it was (laughs). Like me, other members were initially confused and skeptical of Cambridge.|
#03The goal was to “break away from the old system”
|Hamamoto||The period from October to December can be broadly divided into two halves. In the first half (October to mid-November), we examined current business operations and other companies’ case studies, conducted individual interviews, and created a new business workflow to meet peak demand through intensive discussions.
We examined the current state of patent-related work at OMRON, and interviewed our staff about the operations at their previous companies. In addition, we conducted individual interviews with the entire Business Support Division, inquiring about their work, methods, and perceived issues. The emphasis here was to “obtain the truth” but many members of the Business Support Division tended to withhold their honest opinions, instead giving general positive comments. Cambridge leveraged our position as outsiders to allow for open conversation and got everyone to express themselves freely.
|Okuda||The Business Support Division has always noticed issues with peer collaboration, knowledge sharing, and junior staff training. For each patent case, a single person is basically in charge from the beginning to end, in a silo. There was no opportunity for teamwork and collaboration, and few opportunities to exchange honest opinions. When staff is reduced while the amount of work is increased, improving the teamwork within the Business Support Division becomes critical, which is why “breaking away from the old system” became a major theme of this project.|
#04The two-day offsite that changed the project members’ mindset
|Hamamoto||In the second half of October, we held a two-day intensive discussion with all members. During the first half of the first day, we discussed the issues that emerged from the individual interviews with everyone. The emphasis here was on creating a sense of urgency and having an honest, open discussion on the path forward. First, we shared data driven simulations to show we would not able to handle peak demand at all. We also showed that cases took vastly different time and effort depending on the business department and individual handing them.|
|Ibata||Business units have unique characteristics so it is not surprising that the business processes took on various shapes, but this was never explicitly discussed in the past. By showing everyone’s workflow objectively, I think I was able to unify everyone’s sense of urgency and share awareness that this was a division wide issue.|
|Hamamoto||Before entering the intensive discussion, I gave “homework” to the project’s core members: “Please think about what the most important issue is in handling peak demand in the face of staff reduction, and what measures to take against it.” Based on that, during the second half of the first day, we looked at high-priority tasks that need to be done in-house and the processes that could be outsourced. Many raised concerns of maintaining quality when outsourcing tasks.|
|Okuda||Many members were resistant to outsourcing because they handle highly confidential information and some also thought that “outsourcing = no more work for us”. However, staff reduction and increased workload meant that there will be plenty of work left and we won’t be able to handle the demand without streamlining our process. By taking a step back and re-examining our processes, I was able to get rid of the preconceptions.|
|Ibata||We have “focus cases” where intellectual property members need to check the contents and pursue quality and “general cases”, which can be streamlined using external specialists. However, the evaluation criteria was not common knowledge. Leveraging external specialists to improve efficiency was also prone to be perceived as “cutting corners”. I think a big change that came out of the intensive discussion was the official recognition that as the division's policy, it is OK to separate “focus” and “general” cases and leverage external specialists.|
|Hamamoto||On the second day, based on the discussions in the first day, we examined specific workflows with the core members to meet peak demand. Throughout these two days, the project’s foundation was laid by establishing a consensus on areas to focus our resources and areas that should be streamlined. This allowed us to have focused discussions later in the project.|
|Okuda||By the end of this intensive discussion, the pessimistic attitude of some members became more forward-looking. There was no need to revisit workflows previously because each case was a silo and one person would oversee it from the beginning to the end. For that reason, “transforming business operations” itself was a novel idea, and it was great that we could involve everyone in the discussion.|
|Hamamoto||After the intensive discussions, participants told us “I was happy I could share my perspective”, “In the past, there were no place to discuss the direction of the division. I want to do this regularly in the future”, and “In the past, there were no peer collaboration and no discussions.”|
|Inabata||In the past, even when discussions took place they tended to be superficial exchanges without honest opinions. Cambridge as an intermediary and their skillful facilitation allowed us to have a frank, honest discussion for the first time. I just transferred to the Business Support Division in the spring of 2016 and didn't know much about the division’s work, so I was worried if I could effectively lead the team in this project. As I attended Cambridge's individual interviews I acquired various information and knowledge and gained confidence. For that I am very grateful.|
|Okuda||He may not agree (laughs), but I think Ibata’s attitude towards the project changed the most after the offsite. Ibata was able to keep the members’ motivation high throughout the peak season and various people in the company commented on how Ibata had changed through the project.|
|Ibata||I didn't realize it at all (laughs), but I may have gradually become more optimistic as I saw the process of consensus building advancing.|
|Okuda||At Cambridge's suggestion, we solicited ideas for the “Project Name” and after discussing with everyone, we decided on the name “Compass”, and even made a badge. The idea is to open a new path as the Business Support Division while using a Compass as the cornerstone pointing to our future direction. We felt a sense of unity as we proceeded with the project.|
|Hamamoto||I suggested this to make the project as inclusive as possible. I feel that Cambridge has strengthened its relationship with the team through this initiative as well.|
#05Fostering a sense of “this is something we can do”
|Hamamoto||Two actions were taken in the second phase (mid-November to December) based on the new workflow proposal defined in the first phase. One was trial and implementation. We asked a senior member to try the workflow proposal to confirm whether the work could be done and asked him to explain the results in detail at the division meeting. Rather than having Cambridge explain, it would be more convincing if a senior member from the company explained it. From there, we had other members implement the new process too.
The other action was identifying risks. We identified the risks associated with the new workflow and discussed countermeasures. We also showed how much time and effort would be saved with the new workflow’s implementation. Through these measures, we were able to foster a sense that we will be able to overcome the peak season.
|Shimosaka||Another effective measure was inviting Mr. Naohiro Seki, co-author of Cambrudge’s business transformation book and the chairman of the Cambridge Project Facilitation Association (CPFA), in early December to talk about challenging projects that he had faced.|
|Okuda||After hearing Mr. Seki’s talk, when asked how confident they were in overcoming peak demand, members who had been saying “this is something we can do” responded, “I am actually full of anxiety.” I was so surprised that I almost fell over (laughs).|
|Shimosaka||I had anticipated this reaction when I asked Mr. Seki to give a talk. I felt that we had not had enough debate to truly transform our business. By thoroughly discussing project risks, we were able to truly get rid of the anxiety and concerns.|
#06Developing initiatives to meet peak demand and realize future vision simultaneously
|Hamamoto||In the second phase, we began to consider the “future vision of the Business Support Division” along with initiatives for peak season. If business operations can be streamlined, there will be leeway after the peak season, but how do we use that time effectively? One of the important points of a business transformation project is to always consider the “future” beyond current discussions. Like before, two intensive discussions were held on this topic. We identified mid- and long-term issues; we made a matrix where the horizontal axis was “strengthen existing business” and “creation of new businesses”, and the vertical axis was “proactive proposal” and “request based”; and we discussed which quadrant we should aim for. Do we lead our business by improving proposals or increase our expertise in creating patents? We had various opinions and agreed on one direction.|
|Okuda||The peak demand response initiative was merely treating the symptom. Since our work will continue even after the peak season, we have taken this project as an opportunity to consider our future vision as the Business Support Division. Treating the root cause that fundamentally transforms us is also necessary. It was very effective that we were able to tackle the peak demand response and our future vision concurrently because we were able to discuss the present and the future on the same timeline.|
|How did you feel about Cambridge’s facilitation?|
|Shimosaka||When I read Cambridge’s book at first and felt that it was the “real thing”, it was because it clearly described the genuine exchanges with clients and the ambiguous issues they faced. Moreover, the facilitation expertise required to overcome the issue was also openly discussed. The desire to make the book practical in the real world was strongly conveyed. When the project started, Mr. Hamamoto and all other members were excellent facilitators and responded to our requests. I felt that they were providing their service to genuinely try to realize Cambridge’s beliefs and principles.|
|Okuda||Cambridge has a well-established facilitation method, and it has improved the quality of our discussions. In particular, “Scribe”, which makes discussions completely visible, was great. Looking at the contents of Scribe in chronological order, you can see that the project is definitely moving forward, increasing our motivation.|
|Inabata||The reflection (checkpoint) after each meeting was also effective. Cambridge posted a To Do list on the wall during checkpoints and managed each tasks in detail. This allowed us to concentrate on our own roles. If there had been a gap somewhere, it would have been impossible to finish preparations by the peak season.|
|Hamamoto||We tried to be open and work in parallel as much as possible. The content of each session was always shared with members who did not participate, and the current status of discussions and the project’s progress were shared. In addition, we reported to executives including the Director of the Intellectual Property Center twice a quarter and we held meetings within the division to share the same content with all members, reducing information and awareness gaps. When I notice something, I would immediately speak to Mr. Okuda and Mr. Ibata who always responded quickly, which was a big help.|
|Ibata||Okuda, who was the project manager, was always determined to make the project a success. Okuda had the authority to make decisions and was able to lead effectively. Thanks to Okuda, work got done quickly.|
|Hamamoto||Mr. Okuda’s balance in terms of management was also fantastic. Tasks that needed close monitoring such as progress management and direction identification were closely managed, while those that should be left for the actual workplace were entrusted to the members. As a result, the members’ initiative and motivation also improved.|
|How was the peak season from January to March 2017?|
|Okuda||In the second half of December, the trial results and the risk countermeasures were documented, a new workflow was established, and a system was in place to execute it. Thus, from the beginning of the year, we were able to concentrate on handling the peak demand in a smooth manner, thanks to Cambridge’s support. We were able to overcome the peak period, which we didn’t think was possible.|
|Hamamoto||I think that we were able to overcome the crisis precisely because all members faced it directly and had thorough discussions. A tremendous amount of energy was condensed during the six months from the start of the project to the end of the peak period.|
#07Becoming OMRON’s model case for “work style reform”
|So it appears that the Compass project has been highly praised in your company.|
|Ibata||It was introduced to the entire company and garnered a lot of attention as the project that realized “ROIC Management 2.0”, which is an important management index in our company. In addition, as a model case for work style reforms, we have also been receiving interview requests and visits from other departments, affiliated companies, and labor unions. By the way, a picture of the “Compass” badge is included in the materials distributed throughout the company.|
|Okuda||The project’s progress and results were regularly reported to the executives but reductions in working hours and improvements in productivity and teamwork have been praised since the New Year. Executives have commented that “This is what a work style reform looks like.” As we were concentrating on overcoming the immediate crisis, we didn’t even notice that we were reforming our work style (laughs).|
|Ibata||We only noticed it through the praise from around us. “Ah, so this is a work style reform.” (laughs) I am surprised by the comments around us, but if I looked at it from the Intellectual Property Center’s perspective, I realized that we were able to increase field personnel where we wanted to concentrate our resources, the Business Support Division’s operations were streamlined, and our productivity improved. In that sense, it was a project that produced a variety of ripple effects, more than we had expected.|
|What about your current efforts?|
|Ibata||In fiscal 2017, we are allocating the time generated by last year's business innovation to strengthening strategic support and quality improvement. Specifically, we support the execution of the business department’s strategies through Intellectual Property Producer activities (IPP) such as the formulation and execution of intellectual property strategies and the creation of patents. We are involved in strengthening OMRON's competitiveness and IPP activities, which contribute to securing long-term profits. Furthermore, we are establishing property rights for technologies that are in line with our strategies, and we are engaging in quality improvement activities involving patent creations which will give us an edge over competitors.|
|Okuda||These have also been progressing smoothly, thanks to the discussions that we had on our future vision.|
|Finally, the Compass project is still ongoing, but what did you think about the first three months of the project?|
|Shimosaka||At the time, there were lots of meetings, including ones on Saturdays. Normally, it would have been chaotic because we were engaged simultaneously in multiple activities, such as workflow design, trial and implementation, risk identification and countermeasure development, and definition of the future vision. However, thanks to Cambridge’s excellent organization and facilitation, we were able to come up with effective and feasible initiatives.|
|Okuda||The six months from project launch until we overcame the peak season were truly hectic days. When we looked back on the project at the end of last year, there were comments such as “When we started, I felt nothing but anxiety. I was very surprised that we were able to overcome the peak period with our own strength.” This was probably what every member felt. I'm very happy that this experience has given us great confidence and changed the mindset of all our members. On the other hand, reflecting on how hard we worked at that time, I notice that we are now starting to relax. We need to get back in the right mindset again and continue tackling the project.|
|Ibata||I also feel that the success or failure of the Compass project was determined within the first three months of the project. Currently, overtime hours are less than last year, and opportunities for members to collaborate are increasing. Both the team and I gained so much from the project.|
|Thank you for your valuable time today.|