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Information and communications equipment giant, Brother Industries has come a long way since starting out in 1908 as a small family business, repairing the sewing machines on which straw hats were created. The organisation is today a £2 billion business with over
50 subsidiaries across the globe and in excess of 17,000 employees.
Having established successful businesses in both the domestic Japanese market and later the highly important US and European regions, Brother continued to be successful in the design and manufacture of sewing machines throughout its history but also added typewriters to its offering. A move into the new area of dot-matrix printers followed in the early 1970s before laser printers and fax machines were also added to the Brother portfolio in the 1980s.
The grandson of Brother Industries’ founder and today chairman of the organisation, Yoshihiro Yasui first joined the business in 1961. Having graduated from Keio University with a degree in Mechanical Engineering, Mr Yasui worked briefly for Brother before deciding to broaden his horizons by going to study Industrial Management in the US at the Massachusetts Institute of Technology (MIT).
This two year period had a major effect on his views of the business world and subsequently his management strategy. “When I was in the States, I was very interested in seeing the types of businesses there,” he explains. “It was around the time that McDonalds was just starting up and I took a lot of notice of the way that businesses like this were working and realised that how companies were operating in the States was very different to in Japan.”
Mr Yasui subsequently played a significant part in the development of the very first dot-matrix printer in his work with the US company, Centronics, which teamed up with Brother for a joint-venture partnership - a project that also led to him becoming Brother’s general manager for research & development in 1974. “The introduction of the dot matrix printer was one of the key turnarounds for Brother as a company,” comments Mr Yasui. “It was at a time when computers were still on an individual terminal basis and weren’t all networked together. This idea of having a dot matrix, which used needles to print not only letters but also drawings and had so many different and new characteristics really represented a big change for the company.”
Despite continual innovation of this nature, by the late 1980s Brother had fallen upon hard times and was facing a crisis. The sewing machine and typewriter sectors were shrinking rapidly at this time, hitting Brother’s core areas of expertise hard. This problem was being further exacerbated by the negative impact of the strong yen on exports and problems with the Japanese domestic economy in general.
As a result of these issues, Mr Yasui’s appointment as the organisation’s president in 1989 came at a critical time for Brother. He quickly recognised the need for change and soon after becoming president set about initiating a corporate revolution with the creation of the 21st Century Committee. This team of 21 people were split into three equal groups of seven by age (50s, 40s and 30s) with the aim of formulating a new corporate vision for the 21st century. “The idea of this was to find out from them what they envisaged from the company over the next ten years and what they saw as being the trends that we needed to look at,” explains Mr Yasui.
The Brother management team found that these three different groups gave very different feedback on what they felt was necessary to evolve and grow the business into the future. “The people in their 50s wanted us to persevere with sewing machines and that kind of equipment, while the people in their 40s liked the idea of change and had some interesting ideas based around that. Despite this, it was really the people in their 30s that we ended up focusing on, as they saw the products that were going to grow in the future as communications equipment. That took us onto faxes, karaoke machines, multi-function machines, laser printers and so on, and that is where we ended up focusing our ideas,” Mr Yasui adds.
“These younger people had a very strong understanding of what the future was potentially going to hold and it was almost like they had antennas out there picking up what was going on. Despite this, we certainly didn’t discount the opinions of the older people and we recognised the need to keep these people involved to make sure that we gave enough focus to their ideas as well.”
Based on the results of these discussions, Mr Yasui made the bold decision to retreat from the existing businesses that had lost competitiveness in their markets and move into the information and communications equipment business. “This shift in the market and our offering was one of the areas that I had a strong role to play in,” he says.
Today, the principles behind the 21st Century Committee live on with Brother announcing in 2002 that it was going to go through the whole process again, but this time setting its sights much higher. Global Vision 21 is Brother’s ten-year strategy to become a leading global company and word-class manufacturer through the development of outstanding proprietary technologies.
The creation of Brother’s innovative ‘3C’ policy also played an integral part in Mr Yasui’s corporate revolution. He explains the idea behind this philosophy: “We started out with Core Competence, Confidence and Creation in that specific order. The Core Competence starts from the basics of the way of thinking and the way Brother is, where its strengths lie and so on. Then, moving onto Confidence, this is each individual person and the company as a whole, working as entrepreneurs, being aggressive, understanding the need to be competitive and having the confidence and ideas to move forward in whole steps or even just half-steps. Then, with Creation, this could be seen as creative actions and taking that confidence and putting the idea into action. This also includes looking specifically at the needs and the wants of the customers.
“Another of the 3Cs is Control, Computer and Communication, with an example in this area being microprocessors in computers, which we’ve seen move from typewriters to word processors and now through to the PC. With this new generation of the internet, the PC itself is still standalone but it takes on a network by being attachable to the internet, so we start out with Control, then we get the Computer and that in turn leads us to Communication.”
Changing the Brother organisation so fundamentally and introducing these new philosophies brought a variety of challenges to Mr Yasui and his team. “When you try to change a company in such a major way, you have to be particularly strong in how you put this forward to your personnel. So we did a lot of things like changing the names of departments, introducing Global Charter Cards and so on. We really feel that the team leader has a key role to play in improving everyone’s understanding and recognition of the need to change and this is how we try to push it through the company – using these kind of cards,” he says.
“It certainly took time to implement and see the benefits of these changes. I think it was around four years before we saw any improvements as a result of these initiatives.”
These changes have certainly borne fruit and over the last 15 years Brother has increased its turnover by a remarkable 100 per cent, seeing its ninth consecutive year of increased sales in 2004. The organisation is keen to build on this in the future and has ambitious targets to double its turnover again over the next seven years.
Preparing the ground
Brother has spent the past three years preparing and laying the ground to make these aims possible. The organisation has invested $19 million in new production facilities and state-of-the-art factories in China. Research and development into new innovations remains the number one priority and to support this commitment Brother set-up a new research lab last year. The Network Imaging Device Reseach Lab (NID) is intended to develop outstanding technologies that will open up further opportunities for new business. “Over the last three years we’ve also doubled the budget and people allocated to R&D within our business because this is where we see the key line to the future,” says Mr Yasui.
There have also been changes introduced to how development teams work on new products and innovations. “We have found when we start out with new projects that we begin with a basic idea in terms of the technology and there is inevitably resistance to change and worries about how much it will cost or how much development time is involved. Subsequently, we have come to understand that however strong the people involved are, unless they have the management backing there is really no way that this can actually work.
“So we’ve found ourselves as a company taking a group, putting them almost in a protective area, giving them complete management support and giving them the freedom to develop their ideas. The basis behind this is that by giving them freedom and telling these people that have been especially chosen for this project because we believe in them, we give them a responsibility and an accountability.”
Mr Yasui adds: “We wouldn’t necessarily remain with such a small group all the way through, for example when we were looking at fax machines, we started out with seven and that increased to 30. We ended up with around 70 people on the development, which still didn’t work and we had to stop and start again, so we’re always very flexible.”
Important lessons were learnt by Mr Yasui and his team from the success of the realignment of the Brother business 15 years ago, and as a direct result the company is never afraid to make the leap into new market sectors. A prime example being its concerted move into the Multifunction Products (MFP) arena where one machine can fax, copy, print, scan and more. “We’ve noticed that it is not just about progressing the product but it’s about progressing with change at the same time, so we would look at the market demands, see how they’re changing and focus on not what we want to produce but more what the market needs,” he explains. “The biggest single word we are focusing on is ‘network’.
“Therefore we’ve had to change our way of producing, so we’ve really tried to focus on understanding what has value to the customer and then creating something from that. Our sales have been rising very rapidly since we launched our first fax machine and even more dramatically still since we launched our MFP products.
“Looking to the future, obviously the market changes, customers change and technology changes. In terms of our strategy, we recognise that an important part of it is looking at the competition, maintaining a differentiation from them and keeping our individuality because we feel it is key is make sure that we have equipment that people can’t get anywhere else.”
Concluding, Mr Yasui adds: “We have a ten-year strategy that we update and revise on a three-year cycle to make sure that we’re always progressing and always evolving with the market. The new NID will play a central part in this and in ensuring that we remain at the forefront in terms of technology and innovation.”
VTR
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