Chapter 4
Option Power
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Living the Rule of Self-Responsibility <<
4-5.  Living the Rule of Self-Responsibility

  At the time of its establishment, the members of Strawberry Corporation set ten principles for thoroughly implementing company member self-responsibility.

  1. The president will be solicited.
  2. All company members will be solicited.
  3. All company members will retire from Kato Spring.
  4. All company members will be on an annual salary system.
  5. Company members can take leaves of absence as they want and arrive and leave the company at anytime they desire.
  6. Pensions and bonuses will be included in annual salaries.
  7. The company will have two offices, one each at Kawagoe and Nagaoka, and no head office.
  8. The company will be a flat organization centered on the president.
  9. The company will be a fabrication-free company without manufacturing facilities. The company will specialize in development and marketing.
  10. Accounting and general administration work will be outsourced.

  I assumed the post of chairman and two people from Kato Spring participated as advisor and auditor. Therefore, the company began with 14 people. However, the number has grown to more than 20 people.
  At the inception of Strawberry Corporation, about 80% of the proposals from the head office were refused, but I accepted this.
The proposal to apply the annual salary system to only four directors, including the president, was refused. This is the uncompromising stance of the president, Oizumi. If this attitude spreads throughout the company members, a strong vitality will be born. The reasoning for this was that it eliminates the applications from people who love recognition more than work. I agreed with this concept. The salaries of all company members have increased dramatically compared to when they worked at Kato Spring, and the system of pooling pension resources has been eliminated.
  The proposal of "It would be better to form a scrum at one office during the startup period" was also refused. Although the corporate registration shows a head office, there is no head office mechanism. Katoites were assigned according to the logic that people who were in Niigata would go to Nagaoka and people in the Tokyo area would go to Kawagoe. There is no functional division of "You go to R&D and you go to Marketing."
It is Oizumi's personal theory that, "A head office is unnecessary in the network age."
  Since the company's inception, each individual has been given a notebook computer and has managed his/her time personally. This result is directly reflected in the annual salaries.

  However, I emphatically rejected the next proposal from the Strawberry side. In response to their proposal of "We want to introduce stock options," I said, "I would like you to stop such 'salarymanesque' ideas." A system linked to performance such as increasing bonuses when profits increase is okay. But stock options only represent the right to buy stocks at a certain price. There is too little risk in this. It is my thinking that venture businesses must have a greater spirit of risk taking.
  As a result, company members bought 15% of the shares. On a pure asset calculation, these stocks are now worth five times what they paid for them. On the other hand, if performance drops, the value may become no more than the paper the stocks are printed on. I believe that a company will probably survive and be victorious the more people it has who take this risk and fight the battle earnestly.

  Once in the past, the market Strawberry Corporation operates in underwent intense changes and sales dropped by about 30%. This was, of course, due to demands for discounts. As I watched the staff wondering what they would do, they developed new markets overseas by sending company members who weren't good at English flying around the world and found new outsourcing companies that enabled them to lower production costs in addition to other measures. These efforts enabled the company to recover to a point at which it could secure profits.
  I was positively struck by the intense battle being fought by individuals challenging matters at their own risk to the extent that people of the same age employed at Kato Spring, whom I felt may have the same abilities, began to be overshadowed. Therefore, I am doing as much as possible to prevent influences from the parent company side. The reason I took the approach of having the company members resign and not be dispatched to the subsidiary is because the latter always ends up creating superiors at the parent company. I felt that this wouldn't allow for the individuality and abilities of Strawberry Corporation to be demonstrated. This is the requirement for energizing the venture companies that are to be the trigger for reforming the entire Kato Group administrative organization into the associates system, and the first step for doing this is to build a foundation that is flexible.

  Another important role of the Strawberry Corporation is to serve as a trigger that intensely stimulates the parent company's administrative climate and culture. This may be a slight detour, but when I introduced the history behind naming the company Strawberry Corporation earlier, I mentioned that the image overlaps with the freshness of strawberries that shine with morning dew in local markets.
  I personally feel that human society has only been worsening. For example, convenience stores always have seasonal food products on sale throughout the year regardless of the season. One can obtain what one wants whenever one likes to. This has become natural. Hasn't this life in which clothing, food and shelter can all be conveniently arranged created a situation in which we have forgotten the importance of planning and the important value of being thrilled by something before we knew it?
  Cherry blossoms are beautiful because they only bloom for one week in a year. The fact that we have to wait one year for the blossoms to bloom again helps the image concerning them swell and nurtures a fertile spirit.
  I expect Strawberry Corporation to serve as the trigger for a dynamic new culture for Kato Spring and thrill based on the principles of self-responsibility. In 1997, the year following our 50th anniversary, Kato Spring followed my old "theory of a small head office," tore down the Tabata head office we had enjoyed since 1963 and moved into a single floor in a nearby skyscraper. The head office organization was also cut from 180 people to 50.

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