September 04, 2020

A Visionary's Perspective - Unraveling the Innovations and Corporate Management Philosophy of OMRON through the Thoughts of OMRON's Founder, Kazuma Tateishi

Episode 2 : A visionary Corporate Motto that became the origins of innovation

In this series of articles with 8 episodes, we trace the thoughts and speculations of OMRON's founder, Kazuma Tateishi, a rare technologically minded executive, and look at the background to his growth and business philosophy.

In the second installment, we reveal the background of the Corporate Motto which was established more than 60 years ago but remain as the starting point for OMRON's existence and innovation, as well as the driving force and unifying force behind its enterprise development, as well as Kazuma's thoughts behind it.

The importance of a management philosophy that functions like a nautical chart

In 1948, Kazuma experienced a labor dispute between management and employees, which reduced the number of employees from 250 to 33. Despite the growth in business, this occurrence drove the company to the brink of bankruptcy. From that experience, everyone, from the president down to the youngest employees, was drawn to the importance of the "sharing a common goal" philosophy. And from 1950 to 1955, when the company was on the right track and its business had expanded, Kazuma Tateishi began to think about the relationship between the company and its employees not only the company and society.

That kind of pondering can be applied to the modern-day startup business as well. Even if you start a company to bring one bright idea or one great product to the world, as the organization grow in size, the business becomes more complex, and the questions arise like "What is the purpose of a company?" and/or "Why do we work?" Conversely, this could happen to any company, and it is necessary for management and the company to have the right answers to these questions in order to continue to support employees' personal development and business performance.

Kazuma began to think seriously about the importance of management philosophy to prevent his company from stumbling. He thought it was like a nautical chart that was indispensable as a guideline for a company to explore the ocean of business.

Seeking a management backbone suitable for Japan

How can we ensure that management and employees are growing in the same direction? What are the guiding principles that help employees feel the joy of work, the joy of creation and completion, and ultimately the joy of life? Around the same time that Kazuma started his search for answers, he had an opportunity to visit the factories of small and medium-sized electronics companies in the U.S. through the intermediary of the Japan Electrical Manufacturers' Association. He was impressed by the frontier spirit and the Christian spirit that supported the resilience of American companies.

Of course, due to the difference in national and cultural backgrounds between Japan and the U.S., Kazuma knew that he could not just adopt those spirit for Japanese companies, but he also realized once again that a company needs a solid management backbone.

His speculation continued for few years and in the spring of 1956, Kazuma attended a general meeting of Japan Association of Corporate Executives and was greatly impressed by the views of Michizo Kishi, the president of the association. His talk, titled "Awareness and Practice of the Social Responsibility of Managers," revealed that companies are there to serve society. In order to achieve this, Kazuma realized that the backbone of management should be "the public nature of business".

Create a better society through working on its own, keeping in mind of "the public nature of business"

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The rough draft of the corporate motto, handwritten sketch by founder Kazuma Tateishi himself

What made Kazuma extraordinary as a manager was that he did not try to hastily spread the concept of "the public nature of the company," which he had realized, as a philosophy, but instead prioritized the creation of an atmosphere within the company. At that time, no one was familiar with the concept of company constitution. Therefor Kazuma knew that it would not be easy for him to be understood if he just brought up the unfamiliar concept of "the public nature of the company".

So, starting with executives and managers, he spent three years talking to people in a variety of divisions and waited until everybody became comfortable with the idea before putting it together and making it public.

It was written in simple words, " To improve lives and contribute to a better society ", and was enacted as the official company constitution on May 10, 1959, the 26th anniversary of the company's founding.

In that sentence, Kazuma expressed his passionate belief that "a good society is one that does not simply wait for the arrival, but rather takes the initiative in building it."

Service to society is the foundation of corporate performance and continuity

This Corporate Motto shows the public nature of business. Kazuma believed that if a company grew, it could serve the community by increasing employment, and it could serve its customers as a good supplier and its suppliers as a good customer. Also, about half of a company's profits can serve the nation in the form of taxes, and the rest for high wages for employees and high dividends for shareholders. In addition, they would be able to serve their customers and consumers with better products at lower prices, and ultimately, they could also serve society through welfare services.

If a company can become this kind of entity, society will give it a profit as an expense to keep its good neighbor, the company, alive and growing. Kazuma believed that society and the company could coexist in a mutually beneficial relationship if both management and employees fulfilled their missions based on the corporate motto.

In this way, Kazuma Tateishi's conviction that a company should always be useful to society has helped OMRON to grow in performance, and the company as a whole has achieved a variety of innovations. The corporate motto, which encapsulates this philosophy, remains a guideline for OMRON, from its daily operations to the planning of new businesses, and will continue to support the company as an unwavering corporate spirit.

In the next episode, the SINIC Theory will be covered, a theory of future prediction that Kazuma presented at the International Society for the Study of the Future in 1970, which accurately describes social scenarios up to the first half of the 21st century.