In an interview by a certain magazine prior to introducing the associates system in 1997, I responded to a question in the following manner.

  "Although we changed our personnel system from a seniority system to a merit system, it was not a system based upon results. We will shift our focus to a 'results based system' from now on. We would like to move in the direction of ensuring that a section that generates better than contracted results with the company shares in the fruits of its activities.
  The company is a virtual world. Therefore, there can be companies comprised of section units or companies comprised of groups of company members. We have no problem with Katoites that chose to leave the company and work on a contractual basis. I believe it is ideal to give company members this choice as an option. Regardless of the form, we call this the "associates system," and will begin implementing it on a trial basis from April of this year. I would like the associates system to be completed by sometime around the year 2000."

  I have slowly proceeded with my plans one step at a time accepting failures as a lesson. The following is an example of a failure.
  In 1988, which was essentially the first year of my presidency, I began to create the "associates system." I indicated my intent by showing that options are available through various measures like abolition of the morning assembly, changing the uniforms of female Katoites into uniforms selected from an option of four colors and reducing the management presence. A flex-time working hours system was introduced at the Kashiwazaki Factory on a test basis and a pension based on points was also introduced. All this happened during the first year of my presidency.
  But what was the result of these measures? As seen in many of the companies that posted rapid growth in the postwar era, my father, Kiyoshi, was a charismatic personality who led the company by telling his company members to follow him. It was this leadership style that led to corporate growth through a unique and dynamic management style that did not copy others and which often had surrounding individuals wondering if Kato Spring was going to go bankrupt. This time this reputation backfired.
  During the period led by my father, Kato Spring became a company that can be described as having many "Yes men." The idea that everything is okay as long as we do what our leader says naturally came to dominate both the management and other Katoites. All of a sudden, I appeared in this environment, and began telling Katoites to set their own targets, manage their own work and do as they will. This transformation resulted in personnel not knowing what they should do or how they should react. Consequently, the atmosphere in the company became lax and productivity dropped off the charts.

  It was at this same time that the Fukushima Factory was being expanded and Kato Spring was working on an important project in which it was entering the market for insert-type molded parts for the first time. I was alarmed, so I tightened the management strings, though not as much as before, and slowly loosened them as time passed. This experience revealed that something I had done with the best of purposes in mind had been rushed too quickly as the company was not prepared for it.
  The associates system was started with this past confusion as a "scar on my forehead." Although I do not perceive my thinking to be radical or ideal, it was apparent that the sudden change was also very difficult for Katoites to understand quickly.
  Although this is only natural, when humans are placed in a certain environment for a set period and stability is maintained during that period, a certain mindset is formed, whether personal life or work. Adaptation to an environment is necessary for life; however, it is also true that "adaptation locks out adaptability."
  Adapting to a certain environment ruins the ability to adapt to the next environment. In this kernel of truth lies the thinking that "success is the root of failure."
  Excessive adaptation causes experiences to be absorbed and held personally, making it impossible to dispose of those ideas. Being insensible concerning a new direction and methods is also an administrative issue we are confronted with.
  As mentioned earlier, something new is different from everything else. Each time I encountered something new I kept telling Katoites my concept as if I was starting from the beginning all over again.
  Adapting to "constant change:" The key to forming a company with continual growth is to form a company that accepts constant change as the foundation of its corporate culture.