Innovation in Japan: Beyond the Disruption Narrative
Part 2 of When “New” Means 90-Years Old”
By Maya Matsuoka
Perhaps We Have Been Asking The Wrong Question
During a leadership course I took at GLOBIS, we studied the case of Matsushita Denki. While reading the biography of Konosuke Matsushita, I would talk with my classmates enthusiastically about his business genious. Until one day, a colleague said, “Well, Matsushita didn’t have any innovations. They just took existing products and improved them.”
When I started my first job at a Japanese IT comopany, I thought of innovation and continuity as opposites. I associated innovation with change and disruption. But neither that first IT company, nor any of the Japanese companies I worked for over the years, ever showed any willingness to go in this direction. The processes that already existed were consistently preserved, partnerships were maintained, and organizational structures were altered only when absolutely necessary, with a lot of caution, and without much rush.
When foreign executives first begin working with Japanese companies, many are surprised by how much attention is given to building long-term relationships, maintaining trust, protecting institutional knowledge, and ensuring organizational harmony. To most newcomers, these priorities seem to be incompatible with innovation.
Although we often hear people say that the Japanese cannot innovate, how has Japan been able to produce some of the world’s most outstanding advances in manufacturing, robotics, automotive engineering, materials science, consumer electronics, and process management?
It does seem that the case is different and a question tham might be more suitable to ask is, “How do they innovate?”
The Dominant Story Of Innovation
In many parts of the world, innovation is understood as and expected to be an act of disruption. Popular business stories celebrate entrepreneurs who challenge existing industries, break established rules, and move faster than competitors. Innovation is linked to ideas like “creative destruction,” first-mover advantage, and the willingness to abandon old ways of doing things.
The language surrounding innovation – “Move fast!”, “Challenge convention!”, “Disrupt the market!” – tells us that the underlying assumption is that progress requires a decisive break from the past. In this line of thought, stability appears to be the enemy of innovation. Existing systems are viewed as walls to be demolished rather than foundations to be built upon. This approach has indeed produced remarkable results. It has given rise to transformative technologies, entirely new industries, and business models that have reshaped the way we live and work.
But if you have worked with any Japanese manufacturers that have been around for decades, you have probably realized that they have built a different path to innovation.
In Japan, most innovations emerge through accumulation rather than rupture. Innovation here can take the form of thousands of small improvements, repeated experimentation, and the gradual integration of new ideas into established systems. Before deciding what to tear down, Japanese manufacturers determin what should be preserved, and how it can be made better.
Seen this way, continuity is not the opposite of innovation. It is the platform that allows innovation to endure.
The Japanese Alternative: Improvement Over Disruption
Rather than assuming that existing systems must be dismantled to make way for progress, Japanese manufacturers first look at what strengths embedded in those systems can be preserved and improved, “how can we build on what already works?”
Instead of replacing the old with the new, the objective of this process is to strengthen, refine, and evolve existing capabilities while preserving the qualities that have already earned trust.
In practice, new ideas are not rejected just because they are new, nor are established practices protected merely because they are old. The challenge lies in determining what deserves to be preserved and what should be adapted so that the organization can evolve without losing the foundations of its identity and credibility.
This perspective is associated with the concept of kaizen, commonly translated as continuous improvement. Applied both in manufacturing and personal development, kaizen is the expression of the belief that excellence is never finished.
Even a successful product, process, or organization can be improved. Small adjustments, accumulated consistently over time, can produce extraordinary results and products that look and feel entirely new without requiring dramatic disruption.
This approach values both innovation and continuity and recognizes that not everything from the past must be discarded in order to create something better.
Innovation Hidden In Plain Sight
Earlier this year, I worked with a client that produces seatback recliner mechanisms for Toyota Motor Corporation. Through continuous improvement of their existing products, they had engineered and patented a torque controled recliner that ensures smooth reclining regardless of how much weight is applied to the seatback.
While talking about their products with a factory manager he said, 「やっているうちに誰もやってない技術にたどり着いてしまう」or, “As we work at it, we stumble upon a technique that no one else has used before.”
As foreign observers usually look for visible disruption, it is easy to underestimate Japanese innovation because it is born out of continuous improvement that often remains unnoticed from the outside. It is in the process of always asking how things can be done better that innovation becomes part of everyday work.
Yet some of the most influential innovations have occured behind the scenes: a manufacturing process that reduces defects by fractions of a percentage point (Toyota’s TPS or Shinkansen’s operational reliability), a supply chain system that improves reliability under difficult conditions (7-Eleven Japan’s Supply Chain), or a production method that delivers higher quality while reducing waste (Canon and Sony’s Improvements Through Miniaturization and Refinement) – all of these innovations have had a profound impact on quality, customer satisfaction and industry standards in general.
Japan has long excelled in areas where rather than the number of headlines it generates, innovation is measured by how reliably it performs over time. Many Japanese organizations have built global reputations not because they introduced the first version of a technology, but because they refined it, improved it, and made it last.
Knowing this, it comes as no surprise that innovation in Japan is a result of long-term processes and is both dependable and durable.
Consensus Is Not An Obstruction To Innovation
Perhaps one of the most misunderstood aspects of Japanese organizations is their approach to consensus-building.
Foreign executives frequently view consensus as a barrier to innovation. Discussions involve more stakeholdrs and decisions “take forever” to materialize. Viewed from the outside, this process indeed looks inefficient. This criticism, however, often focuses on idea generation and omits implementation all together. Because, while innovation starts with ideas, ideas themselves are rarely the hardest part of innovation. Implementation, though, is.
Even when an organization produces a brilliant idea, if employees resist it, managers do not support it, or customers do not trust it, the innovation might never be realized, let alone create measurable value.
But in Japan, the practice of consensus-building resolves this challenge. By involving stakeholders early, companies ensure stronger buy-in before implementation begins. Stakeholders share their concerns earlier, resistance is reduced, and employees understand not only what is changing but why. And this results in a smoother and more sustainable execution.
In this context, consensus is not necessarily an obstacle to innovation. Rather, it is one of the conditions that allows innovative ideas to be born and to be brought to fruition.
A Different Definition Of Success
The difference in how we view innovation also stems from the way success is defined. As we discussed in Part 1, Japanese organizations often measure success not only in monetary terms but also through intangible achievements. Maintaining trust in the brand, preserving long-standing partnerships, and safeguarding the reputation that enabled their success in the first place are not secondary considerations. Rather, they are assets to be protected and passed on, shaping the decisions organizations make and the pace at which they choose to evolve.
It would be naïve, however, to portray this approach as universally beneficial. The same processes that reduce risk and build consensus can also delay necessary change in times of crisis. Each approach has it advantages and disadvantage and the challenge, I bellieve, is not choosing between continuity and disruption, but learning when each is called for.
For foreign companies working with Japan, the lesson should be not to abandon their own strengths in favour of Japanese practices, nor to dismiss the Japanese approach as outdated. Rather, it is to understand the logic behind it. The most successful partnerships are often those in which both sides recognize what the other brings to the table: the ability to move quickly when circumstances demand it, and the wisdom to slow down when trust, quality, and long-term consequences call for careful consideration.
References:
Liker, J. K. (2004). The Toyota Way: 14 Management Principles from the World’s Greatest Manufacturer. McGraw-Hill.
Imai, M. (1986). Kaizen: The Key to Japan’s Competitive Success. McGraw-Hill.
Christensen, C. M. (1997). The Innovator’s Dilemma. Harvard Business School Press.
Nonaka, I. & Takeuchi, H. (1995). The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation. Oxford University Press.