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[Column] ② Companies are designed to fail.

[Column] ② Companies are designed to fail.

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How many years has it been since your company was founded? According to the Small and Medium Enterprise White Paper, the survival rates of companies born over ten years are as follows: the survival rate after one year (newborn) is about 72%. The survival rate after three years (kindergarten) is about 50%. The survival rate after five years (senior kindergarten) is about 40%. The survival rate after ten years (fourth grade) is about 26%. In other words, the probability of surviving for ten years is only 30%, which highlights the difficulty of survival compared to human survival rates. Looking at the trend of bankruptcies at economic turning points: - COVID-19 (2020): 7,773 cases. - Normal period (2019): 8,631 cases. - Great Earthquake (2011): 12,707 cases. - Lehman Brothers (2009): 13,306 cases. - Bubble (1987): 12,655 cases. The factors leading to bankruptcy vary with changes in the environment, but bankruptcies occur in every era, regardless of whether the economy is good or bad.

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[Column] ➃-➂ Small and medium-sized enterprise presidents are critical in their judgments.

[Column] ➃-➂ Small and medium-sized enterprise presidents are critical in their judgments.

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■Managers value perseverance and the basics They are persistently vocal. Whenever they see their employees, they repeatedly discuss fundamental matters. - Keep promises to customers - Greet properly - Do not cause trouble for others - Keep time, and the list goes on. They always consider the balance of being a reasonable person, which makes them particular about manners and ethics, and they absolutely hate being lied to or promises being broken. ■Managers are people who judge black and white Managers of small and medium-sized enterprises have developed their own coping strategies. They do not see struggles as struggles; they train themselves not to show it, learn ways to alleviate feelings of loneliness, and have ingrained the ability to accept both good and bad. Managers are people who make black-and-white judgments. However, there are also gray areas where it is better not to make a judgment or where judgment is not possible. Various things happen. Even if they understand intellectually, there are many things they do not want to accept emotionally. At such times, they may resort to drinking to vent. If they rely on alcohol all the time, it will harm their health. Therefore, they learn to navigate life naturally.

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[Column] 5. Small businesses are organizations full of "not enoughs."

[Column] 5. Small businesses are organizations full of "not enoughs."

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An organization is a group of individuals who share the same mindset, aiming to share goals, devise strategies for implementation, and act according to individual roles based on rules and standards. Most organizations are cohesive because they consist of people with similar values. However, small and medium-sized enterprises (SMEs) are an exception. SMEs can be likened to a "human zoo." Although people happen to work in the same workplace, their values may differ too much, their goals may be scattered, and they may be unsure of the direction they should take. It is a collection of various individuals, resembling a human zoo. SMEs are characterized by a lack of people, resources, money, and management—essentially a state of having nothing. Furthermore, they operate under a system where one person takes on two or three roles, which prevents a deep exploration of the functions that the organization possesses, leading to daily struggles. The structural balance of the organization is disrupted, making it difficult to accomplish even the most basic tasks. Although they are trying hard, the way they are trying is different, resulting in a situation where outcomes do not meet expectations. The foundation of SMEs is thus fragile. Due to this weak foundation, SMEs operate while chronically dealing with some form of ailment.

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[Column] Management Plan Involving All Employees ➀ The Essence of the Management Plan

[Column] Management Plan Involving All Employees ➀ The Essence of the Management Plan

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■What is a Management Plan? A management plan is an essential tool for a company to systematically and strategically promote management in order to achieve its objectives and desired outcomes. There are two key perspectives to consider in the management foundation. One is the management elements, which include people, materials, money, and management. The other is the management functions, which encompass the functions of the management department, sales department, manufacturing department, and general affairs and accounting department. The management plan outlines how to direct these management elements and functions over the course of the year. ■Positioning of Policies in Management The positioning of policies in management ranks fourth in the following principles that guide an organization towards a common direction: 〇Management Philosophy 〇Mid-term Vision 〇Structural Formation Strategy 〇Policy 〇Product Strategy 〇Tactics 〇Combat However, it serves as the pivot between: 〇The future (from philosophy to structural formation strategy) 〇This year (from product strategy to combat). In other words, without policies, there is no function to connect the future with the current fiscal year, leading to confusion for the company and its employees. Therefore, it is of utmost importance in management operations.

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[Column] Principles for Unifying Organizational Groups 7

[Column] Principles for Unifying Organizational Groups 7

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Strategy is the method of mobilizing people and ensuring it is thoroughly understood and implemented. Strategy is a means to move people, and the key points are management and HOW TO. The essence of management is to ensure that what has been decided is carried out as planned. HOW TO refers to know-how and the standardization of work. Organizations are driven by people. To make it easier for people to drive the organization, it is essential to patternize what needs to be done. Without establishing patterns for what needs to be done, it becomes difficult to form habits. A representative management measure for patternizing what needs to be done is the management plan and performance review. Once the goals are set, we consider how to implement them and create a plan. At the stage of thoroughly communicating the specific route, steps, arrangements, and methods toward the goal, various issues arise, such as: - Not understanding how to do it well - Never having done it before, etc. Thorough communication includes properly teaching how to do things. The problem with operations in small and medium-sized enterprises is standardization. Simply put, it is about not creating a divide between those who can do things and those who cannot. Companies or departments that do not achieve results tend to create plans but fail to train, leading to a higher probability of failure when they face challenges unprepared. Taking this into account, we clarify roles and responsibilities in the 5W2H format: who does what, by when, and how.

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Master's Perspective ② Unique Techniques for Creating Weapons to Fight

Master's Perspective ② Unique Techniques for Creating Weapons to Fight

We are explaining the basic concepts of strategies for growing a company (future breakthrough power) through three themes. Please use this as a reference.

We would like to introduce the perspective of our Meister: "Unique technology for creating weapons to fight." Simply providing existing products using existing methods in existing markets will inevitably lead to a decrease in sales, a decline in gross profit margins, and a lack of profitability. ● What would happen if Toyota no longer produced cars? ● What would happen if Nippon Steel no longer produced steel? In 2003, Fujifilm's President, Shigetaka Komori, instilled a strong sense of crisis among executives and shifted the focus towards nurturing new growth businesses. This marked the beginning of Fujifilm's two-year transformation of its business structure, referred to as "the greatest escape from the existing decline disease." *For more details, please download the PDF or contact us.

  • Management consultant/Small business consultant

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[Column] Why do wage reforms in small and medium-sized enterprises always fail?

[Column] Why do wage reforms in small and medium-sized enterprises always fail?

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This is because it does not view wage reform as a company-wide strategy. By only looking at the aspects of the wage system, the essential themes of management do not become visible. The theme that many managers are struggling with is the reform of the profit structure through the variable cost of labor. No matter how much the wage system is revised, if the source of funds does not increase, bonuses will not increase. To increase the source of funds, performance must be examined; otherwise, it will not grow. To be satisfied with evaluations, it is difficult to accept evaluation criteria given by others. Therefore, employees should be allowed to create evaluation criteria based on this period's management policies and goals. For employees, wages are a theme where they are the protagonists. It does not work well because managers struggle alone.

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[Column] A market with a scale of 3 billion is a battleground where small and medium-sized enterprises can win.

[Column] A market with a scale of 3 billion is a battleground where small and medium-sized enterprises can win.

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No matter how wonderful a product you create, it means nothing if you don't win. While many small and medium-sized enterprises develop excellent technologies and products, if they misjudge the arena in which they compete, they will only have their know-how stolen and be pushed aside, no matter how good their technology or products are. If you don't identify a winning arena, your approach to fighting will be flawed. A large creature like a whale can swim in the Pacific Ocean, but if a water strider ventures into the Pacific, it will be immediately swallowed by the waves. It is better to act confidently in a small puddle. Even in a muddy puddle, if there is no one else inside, you can win. This is the way to fight, and the principle is to win in an arena where you can win. From the perspective of market size, considering niche areas and gaps, the current market size for niche areas is changing to 3 billion yen. A certain major corporate group has established a criterion for new business development that any venture that does not reach an annual sales of 3 billion yen within three years will be withdrawn. Conversely, this means that they will not enter markets with annual sales of less than 3 billion yen. Incidentally, Kobayashi Pharmaceutical, known for product development, is developing products that can win in a 1 billion yen market.

  • Management Seminar
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[Column] Unique Technology for Creating Weapons to Fight

[Column] Unique Technology for Creating Weapons to Fight

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Companies that have been established for over 10 years invariably possess unique technologies. It is because of these technologies that they have been able to operate for a decade. The perspectives on these unique technologies include: - Technologies for producing goods - Technologies for creating services - Specific technologies in individual fields - Core technologies There are two approaches to competition: "fighting to overcome weaknesses, which is a battle to bring negatives to a zero base," and "fighting to enhance strengths, which is a battle that can build upon positives." Fundamentally, it is easier to achieve results by focusing on strengthening one's advantages. The key point in this approach to competition is unique technology. - Unique technologies that are not found or cannot be replicated anywhere else - Unique technologies that exist in other companies but are outstanding or superior Identifying these unique technologies is one method of strategic development. Because unique technologies enable services that differ from competitors, the greater the number of unique technologies, the better the conditions for winning in competition.

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[Column] Growth Trajectory of Small and Medium-sized Enterprises 5: Expansion Growth Phase

[Column] Growth Trajectory of Small and Medium-sized Enterprises 5: Expansion Growth Phase

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■Expansion Growth Period The expansion growth period refers to a company that has broken through the billion-dollar barrier and aims for three billion. It actively promotes multifaceted development centered around the power of its management. This multifaceted development involves the expansion of branches, stores, and areas. Therefore, it is inevitable that gross sales will increase. However, when growing from one billion to three billion, the internal structure of the company often does not keep pace. Inevitably, a tendency for "expansion" precedes the growth period. In cases aiming for three billion, the company lacks the pieces of a shogi game, such as gold, silver, rook, and bishop, resulting in a "king and pawn management style." If the king stumbles, everyone stumbles, creating instability; however, on the other hand, there is also momentum as a company. If the current president feels, "My company is at eight billion, and I want to somehow break through ten billion," then as a manager, they must challenge themselves in their role as a leader.

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[Column] Growth Trajectory of Small and Medium-sized Enterprises 7: From Expansion Growth Phase to Growth Expansion Phase

[Column] Growth Trajectory of Small and Medium-sized Enterprises 7: From Expansion Growth Phase to Growth Expansion Phase

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■Expansion Growth Period This period experiences growth through multifaceted development and the introduction of multifunctionality (implementation of multiple business divisions and headquarters system), becoming a 5 billion company. However, while it appears to be a medium-sized enterprise externally, the content of each multifaceted and multifunctional aspect remains that of a small to medium-sized enterprise, resulting in a phenomenon of significant gaps. The company expands through the establishment of sales offices. However, when examining the content of those sales offices, they are essentially small to medium-sized enterprises. In a small to medium-sized enterprise that operates from a single location, the president is present, allowing for quick responses to issues and easy communication of company policies. In contrast, the sales office is led by a sales office manager. Therefore, the internal structure of the sales office is actually weaker than that of a small to medium-sized enterprise. In other words, "the gross is a medium-sized enterprise, but the internal structure of each aspect is often weaker than that of small to medium-sized enterprises." This leads to various gaps frequently occurring. To surpass the 5 billion mark during this expansion growth period, it is essential to implement multifunctionality, namely the headquarters and business division systems; otherwise, operations will not run smoothly. Additionally, a characteristic of this scale is the clash between the "old" and "new" in various aspects. Through this clash, if the necessary elements for the company are not integrated, it will become difficult to manage from a human resources perspective.

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[Column] Team Management in the 21st Century: Shared Management

[Column] Team Management in the 21st Century: Shared Management

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■What is Shared Management? As the environment changes, adapting to it is the same for society, industries, companies, and individuals. In a mature society where work becomes more complex, all employees working within an organization are required to perform two types of tasks: operational work on the ground and work that drives the team. The style of adapting to these changes is called Shared Management. As diverse leadership is needed to drive teams, there are increasing cases where a single leader cannot handle the situation alone. Instead of having a few individuals manage the organization concurrently, it is necessary to assign the role of job leader to sub-leaders and mid-level employees for each required functional role, changing the standard level within the organization and enabling all employees to drive the organization. *For more details on the column, please refer to the related links. For further inquiries, feel free to contact us.

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[Column] Activities and Management for Controlling a Team

[Column] Activities and Management for Controlling a Team

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The team's performance is designed not to improve. Understanding this fact begins to reveal the meaning of achieving results through leadership and management. Small and medium-sized enterprises have a structure where profits do not materialize unless they do something beyond the monthly routine work, and without considering measures for performance gaps, achieving goals is impossible. Creating performance requires both activity and management as two wheels. Activity refers to sales and production activities aimed at securing sales and profits. In contrast, management involves the task of checking whether things are deviating from the ideal state. Interestingly, if activities are neglected, sales, gross profit margins, profits, productivity, and funds naturally decrease. On the other hand, if management is neglected, expenses, accounts receivable, and inventory naturally increase. In other words, if a group is not controlled, activities will be carried out according to individual judgment, and management is often neglected because it is seen as troublesome. Therefore, performance is structured in such a way that it does not improve unless the functions of controlled activities and management by people or teams are incorporated. *For more detailed content of the column, you can view it through the related link. For more information, please feel free to contact us.*

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[Column] Key Points on Balance Sheet for Selecting Fiscal Month

[Column] Key Points on Balance Sheet for Selecting Fiscal Month

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The income statement is based on annual figures, while the balance sheet represents the flow of funds at a specific point in time. Therefore, when selecting the fiscal month, the weight given to the balance sheet is higher than that of the income statement. What must be particularly considered is the balance between total current assets and total current liabilities, with the ideal situation being when total current assets exceed total current liabilities. However, the composition of total current assets is also questioned. The worst scenario is when 2. inventory reaches its highest amount throughout the year, while the best scenario is when 5. cash and cash equivalents are at their highest when preparing the financial statements. Since the balance sheet reflects the flow of funds at a specific point in time within the 12 months of the year, it should represent the optimal financial flow for the company. *For detailed content of the column, please refer to the related links. For more information, feel free to contact us.*

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[Column] The Density of Interaction Between the President and Employees is a Factor in Company Growth

[Column] The Density of Interaction Between the President and Employees is a Factor in Company Growth

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Through 30 years of management consulting activities, I have discovered several absolute laws necessary for company management, one of which is that companies where the president spends a lot of one-on-one time with employees will definitely grow. One-on-one interaction with employees means personal interviews, discussions about sales and field trends, and educational sessions from the president. Recently, I had the opportunity to attend a management plan presentation for a certain company. When they first started the management plan presentations 16 years ago, they had 60 employees, and now they have grown to 250. This time, the presentation was held at the same venue as 16 years ago, returning to the origin after 16 years. Back then, the president was the sole star, with a management style akin to a king and a pawn. In this presentation, there were multiple stars (executives) who confidently presented, showcasing their growth and the expanded team. Thanks to the efforts of the president, executives, and employees, the company has grown significantly. The president of this company also values interaction with employees, creating time for it, and holds study sessions for employees regardless of weekends. *For more details on the column, you can view it through the related link. Please feel free to contact us for more information.*

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