How to initiate and acceleratemanagement innovation ofcompanies
Republican Graduate School of Business and Management

Yuji Akaba
Advisor of Infinity Blockchain Group and KOBEA Groupakaba@b-t-partners.com
http://www.linkedin.com/in/yujiakaba
January 21, 2020

My career briefly . . .

1

6 years as a design engineer at Komatsu2

MS in Mechanical Engineering atStanford University in USA3

14 years in McKinsey, opened Seoul Office

Helped Korean business groups for 10 years intheir achieving miracle growth
Commuted 500 times in 10 years between Seouland Tokyo
Developed more than several hundreds ofChange Agents in LG Group who can leadmanagement innovation
Deployed more than one hundred McKinsey
consultants from all over the world for the client4

Cofounded in January 2002

Cofound start-ups, with extremely hands-on
approach, helping entrepreneurs
Not a venture capital
Help management innovation of large companies

5

The third largest motorbike
company in India.
6

Advisor of Infinity Blockchain Group with300 blockchain experts

7

Published 20 books in Japan and 19 translated in US,
China, Taiwan, Korea and Thailand. Total 760,000 copies,
all for skill building and management innovation

Anybody can grow substantiallywithin several weeks by writing
A4 memos 10-20 pages a day
The simplest way to become
smarter and quicker in decision
makingVery effective way to develop
strong leaders for management
innovation

URL: https://www.amazon.com/Zero-Second-Thinking-simplest-improving/dp/1642730467

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Now,

9

In the world, competition isgetting fierce.
And, leading players are
becoming even larger and further
dominant

10Market Cap Top 20 @April 30, 2019
Microsoft$1Trillion
Amazon$948Million
Apple$946Million

AlphabetFacebook

Samsung
Source: https://bit.ly/2ri0xl3

Toyota Motor was 45th with $180 Billion. 11

Market Cap Top 20 @December 31, 2019
AramcoApple$1.3Trillion

Microsoft$1.2Trillion

Alphabet

Samsung$922Million → $1Trillion
AmazonFacebook

Source: https://bit.ly/2ri0xl3

Toyota Motor is 41th with $199 Billion. 12

Huge upside if you are smart
But, severe downside risk
Unknown challenges
Winners take all
Cannot survive unless you change13

We should acknowledge thatcompany performance depends
more than 90% on the CEOThat means,

CEOs should initiate management
innovation aggressively and in awholehearted manner
14However, the fact is,
Most CEOs do not necessarily know
how and where to initiate
management innovation
This is the reality I have seen in
many countries
15

Management innovation is not:Simply ask numbers
Intimidate subordinates

Brutally fire people and sellbusiness units
16

Management innovation is:
Systematic approach how tochange the way of thinking andbehavior of the entire
organization

17

Imagine:
There is a door with seven locks
You have to unlock all of them atthe same time

If you unlock only one, you cannot
open the door obviously
18So, seven keys to open the door:
Only when management innovation
becomes possible
1. Need to change vision and strategy, and let everyone know
2. Rapidly improve existing businesses

3. Develop multiple new businesses
4. Assign dedicated management innovation team to support

5. Introduce Human Resource Development Committee
6. Innovate boss-subordinate relationship

7. Change culture by introducing positive feedback andactive listening throughout the organization
Source: https://b-t-partners.com/English-articles/5689

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Pitfalls we should avoid while executingmanagement innovation
Have too high expectation for the rate of change. It would
take at least one year to feel the first change.

Show a contradictory attitude for the management innovation,
often seen by the CEO and senior executives. Typically, CEOand senior executives do not practice what they preach.
Appoint only a few, rather weak people and expect that theywould change the organization.
Give up the effort in the middle. People would be confusedand demotivated. Management innovation would take typicallymore than five years because the entire behavior of the peopleand company must change.
Source: https://b-t-partners.com/English-articles/5689

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When do employees change theirbehavior?
Employees change their behavior when and only when:–CEO sets a clear direction for change–Senior executives show a clear support for that change
and behavioral changes themselves–Their direct boss asks them to change–Their colleagues show some sign of change
In other words, they would not initiate any change on their own.
So many CEOs expect self-driven change because thenecessity is so obvious for the CEO, and they get discouraged
and frustrated to see that there is no change. It is totally absurd.

Employees have no incentive to change their behavior. They
begin to change when they feel that there would be no risk andpenalty for the change themselves.
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How the management innovation of LG
Group was organized, guided and evolved?
The management innovation of LG Group in Korea was initiated by the second
generation Chairman of the group.
McKinsey helped their entire change process including:– New vision and strategy development– Entire reorganization of the group and 50 group companies led by all professionalCEOs– Substantial improvement of all the operational aspects including product marketing,sales force management, profit improvement, cost reduction and the enhancementof customer satisfaction, etc.
– Introduction of executive assessment committees and its implementation andfacilitation– Development of Management Innovation Team which started from 10 members andgrew up to 35 members at the group level, 10-15 each at 50 companies. The
members became presidents and senior executives of the group later.
I was assigned in the early days and led the entire process for 10 full years quite
successfully.
The process was well known by the entire Korean business community and theChairman’s book describing his effort and the change (“There is no other way”)
became the best seller in Korea. This book was prepared under my guidance so that
employees would understand the magnitude of the effort and be motivated. The
objective was fully met because the book was quite sensational.

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Management Innovation project image
Kickoff▼

Decide the firsttwo projects
3 Months▼

Overall review and agree
on the picture of change
program

1. Identify issues andimprovement
opportunities in theentire company2. Develop overall
approach for themanagement innovationand set priorities whereto start and proceed
3. Train Management
Innovation Team
members in skills,communication andoperation

Round 1: 6 Months

Project 1

Continue to implement

Project 2

Continue to implement

1. Conduct situation analysis
Decide next
2. Identify core problems
projects
3. Develop new solution approach▼
4. Develop detailed action plans
5. Assign implementation leaders
6. Start implementation
7. Debottleneck during the process

Each project will be conducted in 6 Months on
average:– 1-2 Months for identifying problems– 2-3 Months for developing solutions– 2-3 Months for implementation
The project members should stay and continue
implementation. Management Innovation Teammembers should move to the next round ofprojects.

Round 2: 6 Months

Project 3Continue

Project 4Continue

1. Conduct situation analysis
2. Identify core problems
3. Develop new solution approach
4. Develop detailed action plans
5. Assign implementation leaders
6. Start implementation
7. Debottleneck during the process

Round 3:6 Months

Project 5

Project 623

Development of Management Innovation
Team as a change agent
We need to set up Management Innovation Team (MIT) as a change agent organization which
provides problem solving capability to tackle different issues in the company, and facilitates andaccelerates changes.
– Assigned as full time, fully dedicated in the management innovation for the next few to several
years– Participate in the project, supporting the project members from business unit
– Initially start from 10 selected members. Full training program will be provided so that they
understand their mission and begin to acquire required skills and proper attitude– After confirming their value, increase to 20-30 members (hopefully within a year)– After their completion of the mission, they will become business unit leaders. If they do not
perform as expected during the course, they will be sent back to their original organization
The qualification of the members:– Respected managers/leaders in the thirties to early forties, expected to become an executive
level in the next 3-10 years.
– Probably No.2 person in each department because getting the No.1 person is usually very
difficult under performance pressure.
– Need to have strong problem solving capability, communication skills, strong commitment andenthusiasm, burning desire to learn, self confidence, modest and honest attitude.
The selection of the members is very important because it will reveal the real commitment of theexecutive team. They will be a role model to change the entire organization.

Especially, the selection of the leader for the Management Innovation Team is the key, andbasically decide whether this effort would be successful or not.

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Why I believe that anybody candevelop and grow substantiallyI have a strong opinion that anybody can develop and grow substantially ifgiven a proper coaching and proper environment. I was one of the strongest
or the strongest believer of this notion in the entire McKinsey. I developed
this belief in my helping LG Group’s management innovation and have been
implementing since then quite successfully.
Of course, there is a precondition that the person is fully committed to growand contribute to the organization. I hope the executives and managers
share the aspiration.
The key is that
– Responsibilities, authorities, evaluation and compensation should be fullyaligned.
– All the executives and managers should coach their subordinates and theyshould be motivated to do so.
– Positive feedbacks are always given by the seniors and among each other.
– Consistent effort should be sustained for at least several years until thenew culture is fully developed and implemented.
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Subordinate Communication/
Skill Mapping
I

E

 Mr./Ms. A
B

J
K

F

C

L
M

G
H

DH

Skill LevelM

LLM

H

Communication Smoothness26

Date:
Name:
DL:
Boss:

Skill Development Sheet
Strength (7-8 points)⚫

Target in the next 6 months⚫ Target level for business performance⚫
⚫

––⚫
⚫

⚫ Target level for development needs⚫

–––––⚫
⚫

Development needs (4-5 points)
⚫
⚫
⚫
⚫
⚫

How to improve development needs⚫ What are the efforts by the individual?

––⚫ What are the efforts by the DL/boss?

––DL: Development Leader

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Lean start-up approach for new
business development
A Project

B Project

C ProjectBusinessdecision▼

2 months

4 months

Initial planning andvalue proposition

MVP development and pivot, refining thebusiness plan

System development

・・・

System development

・・・

Businessdecision▼

2 months

4 months

Initial planning andvalue proposition

MVP development and pivot, refining thebusiness planBusinessdecision▼2 months

4 months

Initial planning andvalue proposition

MVP development and pivot, refining thebusiness planTerminate

2 months
D Project

Initial planning andvalue propositionMVP
develop

2 months

E Project

Initial planning andvalue propositionMVP
develop28

Build a dedicated expert team to support
new business development
Top management

Y Laboratory
X Laboratory

New businessdevelopment teamDirectreport

C BU
B BU
A BU

- Manage the entire scheme- Facilitate outside investment
Core team- Allocate proper resource- Provide management support

Projectteams

Outside resource
BU headPeople,technologiesSpin out
fromBUs

Spin out
fromLaboratories

Establish
start-ups

Buy back options
Acceleratebusinessdevelopment

People,technologies

People,technologies

JV

Start-ups
People,technologies

VC withrelevant
synagies

People,technologies

29For any question and discussion,please feel free to contact:akaba@b-t-partners.com
I am always very quick in gettingback to you.

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Yuji Akaba is a shareholder and an advisor of Infinity Blockchain Holdings based inSingapore, which is a parent company of Infinity Blockchain Labs, one of the largest
blockchain R&D companies with 200 people in Vietnam. IBH has operation in Thailandand Malaysia working closely with associations, universities and governments. Yuji is acore member of other blockchain startups in Japan.
Yuji Akaba is also an advisor of KOBEA Group.

Yuji is a Managing Director of Breakthrough Partners based in Tokyo. The mission ofBreakthrough Partners is, first, to help entrepreneurs build successful start-ups.
Second, to help large corporations in their management innovation, leadershipdevelopment and succession management. Yuji's uniqueness is to work closely withCEOs to accelerate leader/manager development while executing various strategy
development, profit improvement and organization effectiveness projects.
"The Seven Keys to Accelerate Management Innovation“
https://b-t-partners.com/english-articles/5689
Yuji published 20 books in Japan and 19 of them published in US, China, Taiwan,
Korea and Thailand, total 760,000 copies in skill and perspective development.
https://www.amazon.com/Zero-Second-Thinking-simplest-improving/dp/1642730467
Before cofounding Breakthrough Partners, he was a partner at McKinsey & Company,
spending 14 years. He spearheaded McKinsey's practice in Korea, growing beyond 120
staff in less than 10 years.
Prior to McKinsey, Yuji worked six years as a design engineer at Komatsu.
He holds a BS in Mechanical Engineering from University of Tokyo, an MS and theDegree of Engineer in ME both from Stanford University.

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