Innovation in the Corporation
Chairman, IBM Japan
Mr. Kakutaro Kitashiro, Chairman, IBM Japan (MS EECS, UC Berkeley '72) gave a lecture
for UC Berkeley Alumni members in Tokyo on December 7, 2007. Mr. Kitashiro
summarized key success factors for innovation showing that at IBM everyone
talks, breathes and sleeps with innovation in mind, being highly
proficient in executing the innovation process.
For successful innovation in a corporation:
1. Top management must build a climate and culture necessary for innovation. Therefore, they
must incessantly mention the importance of innovation using his own initiative.
2. Create an environment for collaboration among different departments. Wai-Gaya of Honda
is a good example (i.e. enthusiastic exchange of ideas). Make space for
having tea together, reading magazines and informal exchange of ideas.
3. Establish management system for innovation:
a. Set a goal such as 30% of revenues generated from products developed
in the past 3
Define a method for measuring the results in accordance with the
degree of business maturity.
b. Devise the method for evaluating innovation activities from one for
business activities (評価の仕組みを分ける）:
(1) Mainstream business business may be measured by revenues, profits, ROE,
(2) Outcome from innovation effort is uncertain and may take time. Evaluation
based on the
mile stone of innovation is necessary. Only negative evaluation
based on financial prospect
will terminate the project.
c. Verify that enough investment is being invested in the areas with guaranteed
d. Innovation projects need be evaluated, supported and managed by SVP-class
Otherwise, the projects should be terminated.
4. Quick decision-making is essential, otherwise competitors will break
into the market. Large companies tend to take time for decision-making
so as to fail in innovation.
5. Keep on having employees being filled up with entrepreneurial spirits
and lead the project. An original proposer could be an innovator who is
free from conventional approaches, (過去に捕らわれず、独創的な考えを持ち）and he can avoid
an inventor's dilemma.
6. Information and Communication Technologies (ICT) are rapidly advancing.
Use ICT so as to accelerate innovation. ICT can be used as a tool for corporate
management processes, making a core business model (経営に取り入れろ）.
Just 10 years ago, IBM was a 70% hardware sales company, and it has drastically
changed its business structure. Currently, hardware sales portion is about
Clear vision and leadership of the top management has made this transformation
possible, that is, from a hardware-centered company to a service-oriented one
© 2007, University of California, Berkeley,
Japan Alumni Association. All rights reserved.
Photo credit & text: UCB-JAA Homepage Committee. Page design: M.