Mission: To provide "Eureka!"

Mr. Yuichi Kato

President, ADVANEX Inc.

Interviewer

Kiyoshi Itao

Supervising Editor of Nature Interface

Itao: I like your office. You have plenty of light and greenery here.

Kato: I'm glad to hear that. I'm wearing a nature necktie (one with plant patterns) today, because of this "Nature Interface" interview. (laugh)

Itao: Before your company changed its name to ADVANEX Inc., it was called Kato Spring Works Co., Ltd. Production of springs is the origin of your work, isn't it?

Kato: Yes. We started with making precision wire springs that were used in scales, cameras, and office machines. We then introduced press-forming technology and began making flat springs. Three-fourths of our spring production is now flat springs.

Now we're using various techniques such as punching, machining, and bonding, and we also work on non-metal materials such as plastics. These techniques have enabled us to produce a broad range of products that can't be simply categorized as wire springs or flat springs.

For example, we're making parts for retractable keyboards of very slim notebook PCs, hinges of flip-type cellular phones, memory stick units for mobile music downloading, built-in cellular antennas, moving elements connecting the liquid crystal display on a video camera, etc.

Itao: Your business expanded from springs to precision parts.

Kato: Yes. We also underwent transition from parts to units. Even when we were only making parts, we needed technical development to produce very small but durable products. In the production of units, we must use much more ingenuity. The figure shown here illustrates an example. We're not simply producing and selling products, but want to provide "Eureka!" in this way.

Itao: To provide "Eureka!"

Kato: It's our corporate mission. In addition, we define our "domain" as "idea and solution design." By "idea design," we mean the technical development and commercial development that we conduct before accepting actual orders. "Solution design" includes guest engineering and other efforts to solve problems of customers (partners). By doing this, we're not simply taking orders and making products.

Itao: Oh, Eureka! (laugh)

The new company name ADVANEX reflects

What's the meaning of this name?

Kato: ADVANEX was coined from "advanced" + "next." This name doesn't suggest what are our products, but it reflects our corporate attitude to plan and develop future business aggressively. Just as we have expanded our product line-ups from wire springs to precision parts, our business will continue to change in the future. So, a name suggesting a limited range of products will not serve as a brand name that lasts a long time.

Itao: I understand. But, isn't it a little too abstract?

Kato: You're right. That's why it is important to define our "corporate mission" and "domain" clearly.

This name is not intended for corporate identification (CI), but for what we call "corporate future creation" (CFC). It doesn't define and explain what we are or limit what we're going to do. This name indicates the direction in which we want to move. The public image of the name is much more important than the name itself.

Itao: You mean the brand power.

Kato: Exactly. In addition to the product itself, we want to provide our customers with reliable, trustworthy services, such as dependable support systems and assurance of delivery dates. This also includes information on new technologies and new ideas. In my vision, the ADVANEX brand stands for all these things. Although we're a manufacturer, we think a great deal of the service aspects of our business.

Itao: You're not relying on the strength of an outstanding element (key component) of your business. Rather, you emphasize the value of integrating all elements, including services, and the relationship among them (system integration).

Corporate management backed by overseas experience

Itao: By the way, I've been wondering what is the badge you're wearing.

Kato: This is the badge of YPO.

Itao: What is YPO?

Kato: Young Presidents' Organization. It's a group of about 8,000 young corporate and organization leaders with the purpose of education and idea exchange. Actually, I've grown too old to be a member, as I exceeded the age limit of 50.

Itao: May I have a closer look at it? Oh, it's great. You've been working as chairman and president in YPO chapters and in the whole organization. I think your experience with YPO has been useful in many ways for the management of your company.

Kato: Yes. I could exchange ideas and keep company with distinguished YPO members, who are very influencial and socially respected. It was in itself very exciting and meaningful.

It was also the influence of YPO that I introduced IT network as a communication tool ahead of others. We were using Lotus Notes when almost no other companies had notebook PCs.

Itao: Were you ambitious for doing business overseas when you were young?

Kato: I became interested in foreign countries when I was a student. My predecessor established our California office, and I worked there as the first member of our company sent abroad. I purposely chose my apartment in a place where there would be no Japanese people, and also went to a barbershop in such a place. This experience of interacting with local people later helped me greatly in moving people and moving an organization consisting of people. So-called "new type" young workers in Japan resemble Americans in thinking that loyalty to company is not all-important.

Itao: Your company has a considerable number of overseas business bases today.

Kato: Yes. We have many production and sales facilities in America, Europe, and Asia.

Itao: Having this many overseas facilities, I think you need techniques for group management.

Kato: In our concept, the parent company is a supporting center for basically independent subsidiaries. The parent company doesn't take control of subsidiaries. Abroad subsidiaries are staffed with local people, from the top management to ordinary employees.

Itao: I see.

Kato: The concept of independent subsidiaries, indeed, has some problems. Customers sometimes complain that why the parent company doesn't come in to handle troubles, or why there is no Japanese staff in a Japanese company.

Operating a company abroad with Japanese staff may succeed in the first. But in pursuing new endeavors, such a company will certainly run up against a wall. We need to grow people. When we sow seeds, we'll see flowers, but that isn't the end of the story. We want to see that plants bear fruits and new seeds are spread.

Itao: Thank you very much for your talk about your business philosophy. I hope your company grows flexibly and resiliently like a spring in this age of drastic changes.