Case Study: Kao Corporation

Case Study: KAO Corporation

        The case study on the KAO Corporation was an interesting read.  The company follows a very innovative approach.  The approach was very Japanese in how different it is from Western companies.  This paper will cover their enabling mechanisms, innovation strategy, the supportive climate, external linkages to provide open innovation, and how they capture learning to develop improved innovation management capability.

        The Kao Corporation has a very effective series of enabling mechanisms.  It has allowed them to rise as quickly as they did.  They have an uncanny ability to find a new market niche before their competitors.  The company will send out intelligence collectors to assess pricing, positioning, the competition, and the customers before a product is released.  Every employee has a say in the process and has access to all of the knowledge.  When they do make a decision, they do so quickly.  For example, when testing a certain product, a decision was made to change the sample package at 1530 hours and by 1830 hours the change was already being done by workers.  At the company, no one has their own idea, as they are encouraged to share with everyone else.  The idea gets passed around and modified before being presented to higher ups.

        The company has a clear innovation strategy.  Learning is the core value of the company.  In the commercial sector, knowledge is everything.  It is about the only thing that any one company has over another company.  The company is able to come out with new products before their competitors, not just because of its technology, but also because of its ability to learn.  The company has four guiding principles: every product must be useful to society, products must use innovative technology, products must offer customers value, and they must study consumer needs and reactions to their products.  The company further expands this by breaking their products down into five fundamental sciences: Fat and Oil Science, Surface Science, Polymer Science, Biological Science, and Applied Physics.  This allows the company to develop a wide array of application domains.

        The company, which we already know is an innovative organization, provides a very innovative and supportive climate.  The management is not set up like a pyramid, as it is in most Western companies, where the person at the top has all of the information.  The company is considered flat.  Everyone has any information that they need.  There are terminals at the company where any employee can access information.  The company utilizes tataki-dai, essentially meaning to present your idea at 80% completion so that it can be criticized and added to before becoming a proposal.  This gives the idea zo-awase, or common perspective.  There are decision spaces on the work floor.  This area has flip charts and overhead projectors where anyone can contribute as an equal.