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Kaizen can stifle innovation and risk taking

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Kaizen, if used on its own, can stifle risk taking and the ability to produce creative innovations. Here we look at two companies where too much kaizen resulted in the destruction of the Walkman, Sony's flagship product, and Toyota, where less kaizen let them pull away as the undesputed leader of the hybrid car.

By Karn G. Bulsuk

One of the greatest weaknesses of kaizen is that it focuses on the past: make what were doing better. While kaizen is great, one of the major problems of kaizen is that it stifles risk taking and innovation. Kaizen encourages you to play it safe and keep improving on what you already have and promotes an inward looking culture where market opportunities may be missed.

Unfortunately, the next disruptive technology or product rarely comes from kaizen and playing it safe. Rather, it comes from making big bets, taking risks and creative innovations, which may go beyond products that a company may have initially offered.

No longer do you bring around a Walkman for music, but an iPod
Sony is an excellent example of where kaizen has failed it. The once ubiquitous Walkman cassette tape player was not Sony technology, but rather taken by Sony and developed to perfection. The same story was for the CD player: originally developed by Phillips, Sony took the technology and perfected it to form through kaizen.

What they didn't do well was to figure out that by the end of the millennium, the wind would blow towards digital music in the form of MP3s. Sony's permanent decline in the digital music player market would come in the form of Apple, whose unorthodox entry into the market via the popular iPod managed to unseat the formerly unsinkable Walkman.

Sony responded to the competition as anticipated, using kaizen to produce even slimmer and more colourful portable CD players with ever better battery life,. They even made improvements on their Mini Disc (MD) system so that users could transfer MP3s (but only via conversion through propriety Sony software) and even store up to 1 GB of data on the small discs, but it was too little, too late. The iPod was a disruptive product which redefined the rules of the game, where ease of use, a large music catalog via iTunes and the coolness factor played a large role in cementing Apple's success, and sealing the demise of the Walkman. Kaizen simply didn't provide the speed, nor the product that could respond to something this disruptive.

One of the ways that companies get around such problems is to put innovators on the right team. When Toyota developed their Prius hybrid car, Toyota executives deliberately chose Dr. Shigeyuri Hori to lead the development team, because he was innovative, able to think outside the box and was different from others. Tellingly enough, one of the reasons he was chosen was because he was untainted by previous experience in car development, and so he could approach the challenge of developing a hybrid car from a fresh perspective: no kaizen required here.

While kaizen is and will remain an important part of the quality repertoire, it's important to remember that kaizen isn't the answer to all problems. In fact, kaizen on its own will stifle innovation as people forget that to survive in today's market, you need to make something new every now and then.

Make kaizen a rule, but don't make it the rule.
Related articles:
An excellent article published by Newsweek in 2007 asking "Why Apple isn't Japanese" provides an excellent analysis of why Sony has fallen so far from its mantle.
CNET also recently published a piece titled "Sony's fall and Japan's hang-ups" explaining why Sony, and Japan in general, continues to experience severe economic hangovers, even over a decade since their bubble burst. Kaizen is identified as a main issue, along with other very valid points.

Photo credits:
iPod: Carl Berkeley
Walkman: Grant Hutchinson
Prius badge: RaeVynn Sands 

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  • Joe Marshall said:  

    An interesting proposition based upon two different companies but is the join realy kaizen? I don't think so!
    Kaizen is part of the philosophy of lean and as such is abstract.
    The concrete join is strategy. Sony had poor vision and bad strategy whilst Toyota had good vision and excellent strategy.
    Poor old kaizen doesn't live in a vacuum!

  • Karn Bulsuk said:  

    Hi Joe

    Kaizen was a part of their strategy, making it directly responsible for Sony's failure to engage in disruptive innovation. They simply didn't have the mindset to create the next best thing.

    Kaizen is a concept, but it is also a methodology which is quite solid, hence all the associated tools (PDCA, 5-whys, mieruka) used to achieve it.

    As for Toyota having good vision, that is true. But to say that kaizen wasn't responsible at all for the failures of Sony, and of indeed many Japanese companies to innovate and disrupt the market, would be an understatement.

    I'm afraid the join is kaizen, Joe.

  • Henk Hemstra said:  

    Hi Karn,

    I think dat your analysis is 100% correct.
    Focus on Operational Excellene alone is fine until your market shifts.

    When (as Sony did) you only react with more Operational Excellence and not making something new every now and then, your strategy is only defensive.

    Hope Sony recovers and shifts focus to innovation + Kaizen again.

    Kind regards,

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