Business Leadership Forum – Day 2
Day two of the Business Leadership Forum at "the auditorium"opened with a big-screen video made for the event by Tom Friedman, author of The World Is Flat: A Brief History of the Twenty-first Century. Less than four hundred years ago, people still thought the world was flat and that ships would “fall off” the globe if they went too far. Then people figured out that the world was round, not flat. Now we are all realizing, thanks to Tom’s book, that the world is indeed flat. Tom Friedman totally gets it and tells it very clearly.
1989 marked the fall of the Berlin Wall and the rise of Windows. This was followed by Netscape going public in August 1995 which triggered the dot-com boom which triggered massive over-investment in fiber optic cable which enabled extremely low cost transfer of information on a global basis. A revolution in web applications enabled collaboration using interoperable standards-based protocols. These three things flattened the world and brought us from the industrial age to the information age. The end result, Tom says, is that when the world is flat, whatever can be done, will be done. The only question is "will it be done by you or to you". He says it takes an innovative flare, not vanilla ice cream — which everybody can make — but "whipped cream with a cherry on top".
Kunio Nakamura, President of Matsushita Electric Industrial Co., Ltd. (otherwise known to most of us as Panasonic) with classic Asian sincerity, paid great homage to IBM for all that his company had learned and how it was supported during a significant transformation. Matsushita was founded in 1918 and now has sales of $75 billion with $3.4 billion in profit and 335,000 employees. Their management philosophy is that the company is a public entity, that the customer comes first, and to start each day anew. Their largest single product is TV’s but it is only 8% of revenue. The company was in crisis condition in 2000, reached the survival level in 2006, and plans to achieve global excellence by 2010. A key element of this comeback is management innovation, a key part of which is using IT to drive productivity. This may seem obvious but Nakamura-san pointed out that culturally productivity was thought of as something that can be nudged by maybe 10%, whereas American companies think of doubling and tripling of productivity. He said Matsushita wants to change from a lead ball to a soccer ball. I have heard many CEO’s describe corporate strategies over the years but never have I seen a CEO use the terms “IT” and infrastructure as extensively as Nakamura-san. He outlined how the company plans to invest $1.5B in IT over five years to integrate their procurement, production, distribution, sales & services from material & component suppliers all the way through to customers. He plans to use IBM as the company’s innovation partner.