Big companies can deliver big innovation

Epson President, Mr Usui, speaking in London

Big companies can deliver big innovation

At an event in London, Epson president Mr. Minoru Usui made the case that, contrary to the zeitgeist, large companies have an advantage when it comes to innovation.

The theme ‘Big vs Small’ sprang from the perception that innovation has become the preserve of small, nimble start-ups. Large corporations by contrast being characterised as stifled, bureaucratic, hampered by their size, and slow to turn around.

Not so, said Mr Usui. Instead he emphasised that, as long as a company nurtures innovation at its core, size is an asset.

For evidence he charted his turn-around of Epson’s fortunes. He said, “Over the past seven years, since becoming president, I have restructured and refocused Epson to develop it into a top performer on the Japanese stock exchange, generating record profits in excess of one trillion yen, all as a result of innovation.”

An innovative culture is essential to performance

In 2008, when he was newly appointed, Mr Usui realised Epson’s products were predominantly aimed at the mass market. He felt that rather than innovating for its customers, the company had become too focused on matching the competition. This business strategy offered limited growth potential, so he set about changing it.

He instead wanted to rebuild Epson’s fortunes around a group of core products, capabilities, principles and philosophies, one of which was the “relentless pursuit of innovation”. His belief, as a former head of the Corporate R&D Division, was that by revitalising a spirit of innovation within the company, Epson could create original value, exceed expectations and eventually be considered as an indispensable partner to its customers and society.

New technologies from old principles

He found the way forward by taking inspiration from the past; by reconnecting with the founding principles of the Epson pioneers.

They were watchmakers whose aim was to exceed customer expectations. Their ambition to achieve extreme accuracy led them to develop highly accurate quartz, energy saving semiconductors and high-precision robots that simply didn’t exist elsewhere.

Mr Usui spoke of his conviction that the secret to Epson’s future lay in echoing the watchmakers’ values; maintaining the honest endeavour, spirit of creativity and challenge, they handed down.

He said, “They set high goals and took on tough challenges. The technologies they created for watches had to be compact, energy saving and high precision – or, in Japanese, sho-sho-sei.”

Now, as then, the focus is not on profit but on excellence. Epson believes that the only way to create value that others cannot imitate is to refine its strengths and technologies through its worldwide manufacturing base. Mr Usui said, “As a company that follows the Japanese traditions of monozukuri - the art and science of manufacturing - our philosophy is centred on generating value by creating core components and products ourselves.”

Focussing innovation

Perhaps one of Mr Usui’s boldest moves though was to focus Epson’s global intellectual strength and research and development budget into four core product segments in which he felt Epson’s unique technologies could have the most impact: printing, visual communication, quality of life and manufacturing.

The strategy worked. Rather than being another flat-screen TV manufacturer, Epson is now regularly unveiling significant innovations across its product portfolio. For example, in addition to reducing the energy consumption of business printers by 96 percent, Epson has created the next-generation of high-precision, labour-saving robots to support the reshoring of manufacturing, its Moverio smart glasses (which use semi-transparent projections to tap into the augmented reality market), and most recently the PaperLab – the world’s first compact, in-office paper recycler.

While some of these innovations are still on limited commercial release, and remain under development, the spirit of innovation that has been rekindled at Epson has driven significant commercial success and customer value. Far from being stagnant, the company is investing heavily within Europe, opening new offices in Berlin, Munich and Madrid with significant further investment planned.

Mr Usui stressed the importance of making all employees understand that their company exists, not just for profit but to make a contribution to society. 

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