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The Question "Why" Not "How" Should Be Raised - Ways to Acquire "Ability to Define Problems"

The tendency to redefine what had previously been matter of course and crave the creation of new value is spreading worldwide...

The article on The Question "Why" Not "How" Should be Raised is published Forbes Japan

The tendency to redefine what had previously been matter of course and crave the creation of new value is spreading worldwide due to social and economic confusion caused by COVID-19.

This situation can serve as a major turning point for Japanese companies that have been growing at a sluggish pace since the bubble economy. It is an "opportunity in disguise" that must be turned into an advantage.

It may be that we are now being tested over whether we can muster the courage to embark on an "uncharted voyage" rather than veering around to the familiar "calm sea." It will be difficult to expect Japanese companies to become buoyant going forward if they are unable to have courage.

Now, what kind of person can tow this corporate ship on such an "uncharted voyage"? I believe that "a person that can define substantive issues" will be able to lead the company to the new world.

Business Is in the Age of "Winner Takes All"

If we take a look at the current business environment, we are in a "Winner Takes All" situation, which is represented by GAFA.

The main reason for this is that various information can now be exchanged at high speed and a great deal of knowledge can be provided owing to the development of networks.

The development of networks has reduced information disparities between consumers and companies and among companies as well. Consumers are now able to share information regarding products and services and companies can also easily acquire customer information.

Information about products and services that received high evaluation from consumers is conveyed instantly to other consumers through a network. This has led to the company with top sales securing a wide lead over its lower-ranked competitors. A balanced market environment where all the companies from the top to the low-ranked groups had a similar business scale, which existed when networks were still undeveloped, is gradually diminishing.

For instance, in the case of entertainment content including movies, games and books, the difference in sales between the No. 1 ranked content and others may far exceed their difference in quality.

This "Winner Takes All" phenomenon tends to occur more in industries with strong digital elements using networks as infrastructure. What’s more, the "Winner" can gain a further competitive advantage in the market by making use of its strong negotiating power to make more competitive presentations to these acquired customers.

In the past, the difference in productivity between companies used to be small and there was value in walking side by side and "doing what other companies were doing." Therefore, a certain level of homogeneity was inevitably demanded in terms of human resources.

However, in the age of "Winner Takes All," it is possible for the "Winner" to initiate a disruptive change to a different field with its technical advantage and mobility.

What is important in this age is said to be to "question why" rather than "how."

It can be said that to "question why" is to examine what the company believes in, what their purpose is and how they are enriching people’s lives through their products and services. In other words, to acquire their world view by questioning the company’s purpose and raison d’etre.

Many people would probably agree with the importance of "questioning why" because today’s society is changing at an unprecedented speed and is in a situation where human beings and companies are required to constantly adjust to a new environment.

"Questioning why" is at the same time a quantitative and qualitative task. We can derive the company’s "why" by objectively organizing the status of the company when viewed based on numbers and the image of the company as seen by all stakeholders, and by "defining the issues" that the company faces.

And the derived "Why" will resonate with the subjective views of employees and other stakeholders of the company, which in turn, will generate a circle of empathy.

I believe that "defining issues," in particular, is an intrinsic part of the series of processes to "question why." This is what I learned in my experience of developing AI.

The Importance of "Defining Issues"

The AI boom in recent years has been called the "3rd Generation of AI." In the early 1990s, I was involved in the so-called 2nd Generation of AI, developing algorithms to recognize handwritten Japanese characters. At the time, we were still developing a rule-based (processing based on the rules defined by people) character recognition dictionary, so it was before the current deep learning method was created.

There was a "period of winter" of nearly 20 years between the second and the third generation, and it was not easy to secure human resources or budget for studying and developing AI at the time. As a result, there was rarely any company that was able to foster AI personnel. Also, there was no company with management members who had experience or literacy in AI.

Now, there are many companies whose top executives plan measures utilizing AI. However top executives instruct next-generation leaders who are close to digital personnel and are in charge of management strategies and corporate planning to "do something with AI for the company" rather than asking the management team with less AI knowledge.

The leaders who were given such instructions will have "management questions" such as why they want to use AI and for what, if the issue should really be resolved by AI, and whether there are any actions that should be taken before applying AI.

Then, if they deepen these questions further, they will end up with "self-searching of the company," namely, asking what the company wants to be, and eventually with "asking the question why."

In providing the answer to this question, looking merely at the company from both quantitative and qualitative aspects will only come up with the same answer as your neighbor. It is not surprising that the more rational the process is to reach the answer, the more everyone will come up with the same answer.

This is why it is important to add creativity with intuition and sensitivity. Doing so will make it possible to "define issues" and come up with unique and essential answers to the question "why."

So, how can we cultivate intuitive and sensitive creativity? Based on my past experience, I believe that the following three actions are important:

The first is to learn history and analogize possible eventualities. The second is to continue making efforts to see through the essence of things and try to create something evolutionary that goes beyond the essential. And the last is to make sure to deny self-righteous ideas and constantly seek fundamental values.

The environment surrounding us is changing with increasing speed led by digital development. The ability to define such fundamental issues will surely be focused on as an important quality of business people.

Why not join me in incorporating these three actions into our daily practice?


※This article was published in "Forbes JAPAN Online posted on October 12th, 2020". This article has been licensed by Forbes Japan. Copying or reprinting without permission is prohibited.

Author

Partner, CEO of KPMG Ignition Tokyo Inc.

KPMG in Japan

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