Panasonic Spin-Off Camera Manufacturer’s
Growth Strategy
Masato Nakao
Representative Director, Chairman of the Board & Chief Executive Officer of i-PRO Co., Ltd.
global picture, we were slow in adapting to market
changes. Although we still held a large share in theJapanese domestic market, we were falling behind
newly emerged competitors in the global market.
While global rivals were enjoying double-digit
growth, our sales had remained at the same level
for many years. (See Graph 2: Global Competitors’
Growth.)We also saw a decline in our productdevelopment capabilities, which had been a sourceof pride since the Panasonic days. In fact, a survey
conducted by an independent industry research
institution in 2019 showed that we had also lost
ground to our rivals in evaluations of camera
performance. The key factor behind this was thatthey had redrawn the battle lines with newtechnologies and business models. Once a market
leader, we failed to notice that our way of doing
business was behind the times. People may say it
was the success trap, and we must admit that thiswas why we could not break free from ourconventional methods.
What was the problem? Here, I wish to reflect
from the perspective of 3C: customer, competitor,and company.
The first point is the customer. Who exactly are iPRO’s customers? Security systems are comprisedof surveillance cameras and other hardware, alongwith software that performs tasks such as image
analysis and system management. People known assystem integrators design the systems, selecting
the ideal hardware and software based on the

Glory, Struggle, and New Departure
On April 1, 2022, we changed our company name,from Panasonic i-PRO Sensing Solutions Co., Ltd. toi-PRO Co., Ltd., thus erasing the name of ouroriginal parent company.
But this name change is not just a transit point—it
is a turning point that we should engrave in ourhearts. I wish to take this opportunity to reflect on
the path we have taken from our establishment
until now and to outline our concept for the future.
Panasonic i-PRO Sensing Solutions wasestablished as an independent entity from
Panasonic on October 1, 2019. Of course, thischange was not limited to a change of vessel, it
represented a shift in purpose and strategy, the redefinition of our business field, re-connection ofrelationships, and reform of our organization. But it
was just the first step in our long journey, and wecontinue to tackle these challenges today.
The origins of i-PRO can be traced back to 1957,
when Matsushita Electric Industrial Co., Ltd.
Central Research Laboratory developed aprofessional surveillance camera. Later, thecompany underwent mergers with Matsushita
Communication Industrial, Kyushu Matsushita
Electric, and SANYO Electric to become a world
leader in the image sensing industry by the 1990s.
(See Figure 1: i-PRO Corporate History.) But, in the1client’s requests. Essentially, our customers are
system integrators, and as a manufacturer, weshould aim to improve our products and services inorder to increase the likelihood that they will
choose us.
But Panasonic as a whole was proclaiming a shift
from products to services, changing course to
become a solutions business. Its Security Systems
Business Division, the predecessor to i-PRO,followed suit. We switched business models from
simply supplying hardware to offering clients wholesystems that included software. This put us into
competition with some system integrators whoshould have been our customers.
Soon after i-PRO was established, ourdevelopment division proposed a project to me todevelop an advanced LPR (License Number
Recognition) system. The aim was to compete withJapanese system integrators that supplied car parksystems. Of course, these system integrators were
not manufacturing cameras. In other words, they
were potential customers. But we were not striving
to encourage such companies to adopt our
products, instead, we were trying to steal theirbusiness. There were countless such examples,
resulting in many lost opportunities and utterly
wasting our resources.
What were our global competitors doing? Thelate 1990s witnessed the global expansion of adigital revolution of IT and the Internet thatspurred rapid acceleration of technologicaladvancements. Based on this new businessenvironment, our rivals opted to pursue horizontal
specialization. Hardware manufacturers developed
hardware, software developers focused on
software, and system integrators concentrated onrealizing client demands, each specializing in theirown business field. Then, through collaboration,2

they were able to shrewdly target market
opportunities. As a consequence, a new industry
landscape emerged where a number of major
players in video software management (VMS), thebasis of security system platforms, and a few major
camera manufacturers, had carved the market up
between them. Unfortunately, we were not among
them. From their perspective, it was difficult tocollaborate with Panasonic, which offered clients a
vertically integrated business of hardware andsoftware.
In addition to the inconvenient reality that thisbusiness model created, we also had operations
issues. Panasonic has a good reputation for
manufacturing, with top quality products andproduction efficiency. But the price it paid to securethese merits was time. Global rivals had a new
product development cycle of two to three years,
in comparison with a four to five year cycle atPanasonic. Why so slow? The company would
repeatedly refine designs in an effort to create thebest product possible. But no matter how optimum
a design is, in the world of digital, it takes just two
years to fall out-of-date, making it impossible tomaintain high appraisal for performance.

In addition, the company aimed to optimize
production plans with the prerequisite ofminimizing inventory. This frustrated customers by
forcing them to accept long lead times. Rival
companies, however, had sufficient inventory to beable to respond to customer demands for
immediate delivery. The difference was clear in theeyes of customers. Soon after I joined the company,
during a visit to a client in the U.S., I was shown thetransaction screen for doing business with us, using
electronic data interchange (EDI). I was shocked tosee that the delivery time frame automaticallydisplayed “90 days.”
In the past, the company won significant market
share thanks to Matsushita Electric Industrial’s
Panasonic brands, which guaranteed sufficientrevenue. It had established sales channels,
particularly in Japan, and had few rivals, allowing it
to successfully operate the same business foralmost 50 years. But the world viewed things moreharshly. I think this is shown in the difference in
speed seen in Graph 2, and in the third party’s
product review. The company let its guard down—
new rivals took advantage of this, and seized
territory. The company had fallen into the success3

trap.
Becoming independent from Panasonic andchanging our company name in preparation to relaunch is more than merely a change of nameplaque. For a start, I want the new i-PRO torecapture the global lead that was carved out by
our predecessors. Over the last few decades, ourrivals have changed the principles of competition
with business models that differ to ours, and havecreated new markets. This is why i-PRO will start at
a disadvantage. We cannot beat our rivals with ourcurrent way of doing business, no matter how hard
we try. We need to take up a new business model,
as our rivals did previously, reform our principles ofcompetition, and pioneer new markets. Our entire
organization needs to deeply comprehend this, andeach individual needs to personally reform their
behavior.
In 2019, we immediately began to redefine ourstrategy. The new strategy we conceived iscomprised of two main concepts. The first is an“open policy” and the second is “time-based
competition.”

position (1) as the reason for our existence, while
strategically rebuilding relationships with partners
who are responsible for the work of (2) to (4).
Since the establishment of i-PRO, we haveactively endeavored to rebuild relationships with
VMS vendors, AI analytics vendors and others. Our
total sales for projects in collaboration withvendors other than Panasonic in fiscal 2022 are
expected to be around double the level in fiscal
2019.
In this way, our open policy has become a driving
force for i-PRO’s growth. In April 2022, we removed“Panasonic” from our company name and that has
also helped us in re-building relationships withpartners. From the viewpoint of major system
integrators in competition with Panasonic, they
were no doubt wary of purchasing cameras from acompany with Panasonic in its name, even if we
proclaimed an open policy. Fortunately, i-PRO still
enjoys a strong reputation for product quality as alegacy from the Panasonic days, therefore many
partners welcome our decision to remove
Panasonic from the company name and ourconversion to an open policy. We must be thankful
to our predecessors at Panasonic who built up thisvaluable asset of reliable quality.
In fact, when I first proclaimed this open policy, I
received many questions from within and outsideof the company. There were people who
questioned our decision to abandon the solution
business, or who wondered if it was right tospecialize in camera hardware at a time when AI
was gaining attention as new solutions business.
Obviously AI is a growth field that gets everyone’s
attention. Describing one’s company as an AI
solutions vendor is more in keeping with current
trends and has a better ring to it than being a mere
security camera manufacturer. I believe suchquestions are completely normal.
But I would like to respond to these questions byintroducing the following story. California
experienced a gold rush in the mid-19th century,with prospectors flocking in the hope of striking itrich, but who really became rich at that time? Was

Open Policy
Open policy refers to horizontal specialization. iPRO is a hardware manufacturer, specializing indevelopment of hardware including cameras, ourfield of expertise. At the same time, in areas where
hardware alone is not enough, namely, softwareand system integration, we share the work with ourleading global partners.
Security systems are generally composed of (1)cameras and other hardware, (2) image analysis
software such facial recognition (analytics), and (3)VMS, which controls the system. It is (4) system
integration that executes optimal design
installation based on the client’s wishes. During thetime of Panasonic, we combined all four to create“solutions,” and aimed to provide all these aspects
as “solutions” ourselves. But now, i-PRO focuses on
4it James Marshall, whose discovery of gold sparked
the gold rush? Was it one of the 49ers, whoconverged on California in 1849? The answer isnone other than Levi Strauss. Strauss neither
developed ground-breaking technology, nor lent a
hand in prospecting. He merely made and suppliedjeans made of thick, strong canvas. But because hetook out a patent, which lasted 20 years from 1870,
when he invented jeans, until 1890, he was able tobenefit from his monopoly.
If we compare vendors who offer analytics andsystem integration using AI with the gold
prospectors, we will aim to be like Levi Strauss. We
will not compete with them in searching for gold.
Instead, we will supply “jeans” in the form of AIcompatible cameras. In the same way that many
ambitious people traveled west hoping to findfortune, there are now many players, big and small,clamoring to provide AI-based solutions. There areprobably thousands, or even tens of thousands, ofthem now around the world. But there are few
cameramanufacturers
withestablishedtechnologies suited to the needs of the AI sphere,

in the same way that there was once a limited
number of jeans manufacturers.
It is said that around 60% of data used with AI isimages. Essentially, the majority of openings into AI
are camera-related, and cameras are therefore an
essential tool for those working in AI. But can thisbe a source of profit in the way that jeans were?
Some people claim that cameras are a commoditythat anybody can make. To respond to that doubt,
we must gain a hint from the strategies of ourpredecessors. It is at this point that we set oursights upon economies of scale. Do economies ofscale function in the AI solution business, or the AIcompatible camera business?
Despite the market’s expectation, AI and its
spread is not causing a stir globally. The fact is thatit remains expensive. Unlike fields such as financesolutions and ERP, where standardization isadvanced, AI solutions must be customized foreach project. In other words, there is little
standardization, therefore there is no room toachieve mass production that would engage
economies of scale. We believe this situation5

indicates how extremely fragmented the AI market
is.
When we consider the situation faced by AI
engineers, in many cases, they must work on-site at
the client company, and develop solutions throughtrial and error. If a camera manufacturer is able towork closely with such an extremely busy work site,
AI will no doubt see progress, but unfortunately nosuch camera manufacturer exists. This is an issue
for the AI market, but also a business chance for us.
But to gain such a business opportunity, we must
increase the variety of our AI-compatible cameras
and be able to immediately supply even just single
units. If we can successfully employ economies ofscale here, we can be like Levi Strauss.
Everyone admits that AI is a growing market, but
the pursuit of AI solutions does not afford
opportunities to benefit from economies of scale.
Because there is no maker in the world able tomanufacture cameras in high-mix, low volume,with prompt delivery, the market is not growing as
quickly as people hope. If i-PRO can establish asystem for high-mix, low volume, and prompt
delivery of AI-compatible cameras, the market will
grow, we can become the default vendor, andexpect exponential growth. This is the reason that
we abandoned the solutions business to focus on
manufacturing the hardware.
It is our second strategic concept, “time-based
competition” that holds the key for establishingsystems for high-mix, low volume, and prompt
delivery. This way of thinking seeks to build
competitive superiority through operational
excellence. Let us look closer at the specifics.

have entered an era of excessive competition andso-called engineered commodities (hi-tech
everyday items). This is the exact opposite of theblue ocean enjoyed by Levi’s: a market known as a
red ocean, that forces us into battles of attrition.
In order to break free of this red ocean, and build
a competitive advantage, we devised the strategic
concept of time-based competition. This is a
strategy to maximize the value of time, aiming todifferentiate ourselves from rivals and achieve ouropen policy. By combining these policies, we can
supply products to anyone, while keeping theoperational expertise, the source of ourcompetitive advantage, an in-house secret,creating a situation that other companies cannot
mimic. This operational excellence helps us
differentiate ourselves from rivals, providing astronghold to protect our profits.
The concept of time-based competition
originates from a survey of global car
manufacturers conducted by George Stalk, Jr., ofBoston Consulting Group (BCG), which began withthe exploration of the core competencies of the
Toyota Production System and found that Americanmakers took 60 months from development tolaunch of new models, which Japanese businesses
achieved in 36 months.
The BGC survey showed that Japanese car
manufacturers achieved higher growth than their

Time-based Competition
We cannot reproduce the growth of Levi’s only
through an open policy. i-PRO had many industryfirst, world-first products, but rivals also continued
to develop new products daily. Patents andtechnological innovation are short-lived, as we
6

US counterparts through improvements such as
cutting inventory, reducing set-up time andinterruptions, and improving workspace efficiency,
whereby they boosted inventory turnover rates,
along with equipment and labor occupancy rates.
The crux of time-based competition is that time
is a source of competitive advantage. Specifically, it
is a concept of controlling time, for example,
minimizing time that does not produce added value
and cutting lead time, helping to reduce customers’
opportunity costs, justifying premium cost, andachieving profitable growth. For example, if
products that take average of one week for delivery
can be delivered the next day if a customer makes
an urgent request, it is possible to charge morethan normal, because six days of wait time are
eliminated. In economic theory, price is said to be
determined according to the balance between
supply and demand, but when the variable of time
is factored in, the position of the equilibrium pointchanges. If delivery time is long, it falls (equilibrium
point 1), and if delivery time is short, it rises(equilibrium point 2). Basically, the relationshipbetween supply, demand and price is greatly
affected by time. (Refer to Graph 3 on the previous
page: Price as a Function of Supply/Demand andTime.)
Operational excellence and process innovation
are essential to make it possible to flexibly adapt tosituations. Furthermore, a virtuous cycle based onsuch unique organizational capability functions as abarrier that prevents entry by rivals. (Graph 4
Strategic Virtuous Cycle)
A prime example of this is Misumi Group Inc.
Originally a trading company, Misumi Shoji Co., Ltd.,
which sold die components, but it introduced abusiness model of catalog mail order sales, thereby
establishing itself as a unique presence.
Furthermore,bymergingcomponent
manufacturer Suruga Seiki into its operations, ittransformed into a SPA (manufacturing retailer) in
the components business, and now produces as
many as 80 sextillion (80 billion times 1 trillion)
types of machine components, to order.

7

I would like to reflect upon and revise the natureof the camera as a tool. Professional photographers
select the optima camera according to the subject
they will photograph as well as the time, place andoccasion. For this reason, most of them have avariety of devices. It is the same with cameras
needed for AI. Diverse capabilities are required ofcameras depending on the object and shooting
environment, including angle of view, distance tothe object, resolution, shutter speed, and depth offield. The construction of outstanding AI requires aone-of-a-kind camera that optimally combinesthese factors. In order to respond to such needs,
we need the organizational capability for high-mix,
low volume production and to leverage economies
of scale.
The camera industry changed dramatically withthe advent of the smartphone. Businesses haverisen to prominence with sales in the millions permodel, and there has been no sign of makers
aiming for high-mix, low volume production. It is
not necessary to work like Misumi in quantities ofhundreds of quintillions, trillions or even hundredsof millions. Still, by introducing the same businessmodel as Misumi and having customers purchase in
the same manner, we should be able to achieve a
presence that other companies cannot replicate. In
other words, by continuing to pursue the value oftime through operational excellence, we canescape the game of the red ocean where returns on
investment in technological and operationalinnovations are unpredictable.
i-PRO’s time-based competition refers to theconstruction of operational excellence in thefollowing two fields. The first is the engineering
chain, that is, product development lead time; andthe other is the supply chain, production andlogistics lead time.
In the case of B2B products, many customers
have different needs. In the time of Panasonic, wewould prepare demand forecasts for these needs,
and develop products in order of models we
expected would be in greatest demand. But designand development rules were strict. We wererequired to develop the optimally designed
product at minimal cost per model, without
redundancy. As a result, it took a long time to makeeach model, and the number of products that could
be developed each year was limited.
Also, a system of production, sales and inventory(PSI) planning was simultaneously implemented at
the manufacturing front line. This was because webelieved that the production of a large lot
minimizes costs and optimizes inventory. It cancertainly be considered a safe way to operate, butlead times tended to grow, and the supply chain
lacked flexibility. Consequently, we lost
opportunities here and there, for example, frombeing unable to promptly respond to changes indemand. Viewed from the perspective of timebased competition, our ways of development andmanufacturing were in opposition.
Even if we understood this, in the case of a large
company with a long history, it is not easy toeradicate ingrained ways of thinking and working.
Trying to resolve issues individually when they
were complexly intertwined would end in an
impasse. Resolution required not individual
prescriptions but a general notion to liquidate theseries of issues in one go. In the case of i-PRO, thiswas the modular concept. A restaurant is the
epitome of this. Usually, restaurants have a large
selection of items on their menu. Some restaurants
prepare dishes from their ingredients at the time ofordering, but usually, they prepare items inadvance, such as soups and stocks used in multiple
dishes, and pre-cook meat and fish to save time. In
production terminology, they are referred to as
half-finished products. Fast-food chains and the likehave a large selection of dishes, prepare halffinished products in advance and have processes to
fix prepare finished dishes with minimal effort
whether for an individual serve or a large order,
thereby reducing the time required to fillcustomers’ orders.
In 2020, we revised the tailor-made system, theway we design a finished product from scratch, that
we had used continuously for decades and began8

development of half-finished products. Essentially,
we do not develop finished products, but switched
to developing modules (general purpose halffinished products) for use in various types of
products.
Actually, module design has a greater degree ofdifficulty than designing from scratch, model bymodel. This is because it is necessary to design torespond to diverse needs while minimizing
redundancy, and to consider how to guarantee
maximum compatibility between modules, forexample. If you develop multiple modules with ahigh degree of versatility, it is possible to define all
final products as a combination of them. The
effectiveness of this is clear: the development cycle
for one model is significantly reduced, and thenumber of new product models that can bereleased each year increases greatly. (Graph 5
Product Development Time and Number ofModels) In the fast evolving digital industry,development cycle speed has greater significancethan product range. This is because, by constantly
incorporating the latest sensors and semiconductor
chips released by suppliers into products fasterthan other companies, it is possible to retain thelead in product performance.
In the manufacturing front line, we mass
produce these general-purpose modules toleverage the economy of scale, and retain them as
inventory. We await orders with half-finishedproducts, then quickly assemble and ship in
response to demand, enabling us to immediately
respond even to small-volume needs. This is also
known as mass customization. (Diagram 6 Module
Manufacturing Process) By delivering on customers’
requests in a timely manner and quicker than rivals,
we can justify premium prices and also develop
closer relationships with our customers. Then we
can gain increased repeat business and customer
life-time value (LTV) will increase.
Misumi succeeded in achieving rapid growththrough its own unique business model but we canprobably say that the key to its predominance isdesign expertise in generic modules (which Misumi
refers to in-house as “blanks”.) The company has
accumulated know-how in the degree of
redundancy possible, and how much they canincrease the final number of models, how many
items should eventually be defined as blanks,
which blank should be designed and manufactured
in what way, how much inventory they should have,and so on. It goes without saying that it would be
extremely hard for other companies to imitate
them. Unlike product performance, it is notpossible to see the engineering chain or supply
chain from outside. Therefore, if you construct sucha system, other companies will be unable to copy it,
and you can maintain a competitive advantage.
This is what i-PRO aims to do.

9manufacturers and conducted joint development
for medical-use cameras. Because specifications
vary between manufacturers, it is necessary todevelop based on those respective requirements.
Consequently, as with security cameras, we tooktime to design and develop products, from optics
to image processing. In principle, cameras
developed with one customer cannot be used byother customers. For that reason, although we
possess high-level technologies, during our timewith Panasonic we were only able to work inmarkets controlled by major medical equipment
manufacturers and were not able to accessdiversified long-tail segments.
But at the start of fiscal 2022, this businessdivision also adopted the modular concept,
switching to a development policy aimed at swiftly
responding to dispersed needs by combining
generic modules. Through our experience to date,
we have accumulated vast quantities of data inhouse related to client needs. We have sufficientknowledge of common needs and of needs that

Medical Vision Strategy
Next, I would like to discuss i-PRO’s medical
vision business. Currently, the medical visionbusiness accounts for around 15% of total sales. iPRO medical-use cameras are incorporated into
rigid endoscopes and so on used for abdominal
surgery and examination, and have been adopted
by many major medical equipment manufacturers.
The business is expected to grow even more in the
future. Medical camera users have highexpectations for aspects such as color reproduction,and their needs differ to those for security cameras.
In addition, laws and regulations relating to
medical treatment differ between countries, andneeds vary by medical specialty, resulting in a more
fragmented market than for security cameras.
To date, we have entered into individual
agreements with major global medical equipment
10

vary by client. Consequently, we can predict theextent to which we can meet diverse needs bydeveloping generic modules. This is another area
where we have an advantage over rivals.
By introducing the modular concept that
supports our open policy and time-based
competition, the medical vision business is now
able to make diverse proposals faster than othercompanies. It represents a switch from acontracted manufacturing model to an OEM model.
Based on this, the medical vision business is
forecast to double its sales in the next five years.

PRO’s new business model also adopts thismodular concept.
What then is happening in the AI industry?
Humans are said to obtain 60 to 80% of theirinformation through sight. In the same way, 60% of
the information used by AI as material for analysis
is image data. By our estimate, potential demand in
the AI camera market for industrial use alone isworth around 400 billion yen. As I mentioned
earlier, all cameras used for AI should be unique;the required specifications and performance differ
depending upon the target. Cameras have many
variables that should be optimized, including angleof view, distance to the object, resolution, shutter
speed, and depth of field. But there are no
manufacturers anywhere in the world that
customize cameras for each user. Therefore atpresent, users have only two options—either pay afairly high price to have them customized, orcompromise with a standard camera available inthe market. The AI market is extremely fragmented,
and although cameras lie at the core, there arenone that can meet such diverse needs. This iswhere i-PRO fits in.
i-PRO has a record in imaging technology withcameras for surveillance and medical use, and wehave already expanded this technology to genericmodules that we can assemble like building blocks.
Essentially, we can build BTO cameras, like BTO PCs.
In addition, we can flexibly adapt to user needs, forexample, processing AI images on a server or the
cloud, or using edge devices installed in the camera
body. In the near future, there is likely to be a shift
towards edge computing where cameras
themselves feature AI instead of needing to send
images to a server or the cloud. In this case,demand for i-PRO will grow even more.
i-PRO’s BTO cameras are derived from modules
developed for surveillance and medical cameras.
Through operations honed with time-based
competition, we will be able to provide low-cost
items in a short delivery time from just one unit.
We began sales of such camera modules on a test
basis in June 2022, through Amazon Japan websites.

A Future Created through “Open Policy”
and “Time-based Competition”
As I explained earlier, our open policy and timebased competition, two strategic concepts that
initially appear unrelated, become closely interrelated and are simultaneously realized throughthe introduction of the modular concept.
For i-PRO, our current aim is to reclaim the lead
position in the security camera industry, which
Panasonic once held. Again, since we began on our
independent journey, we have renewed ourrelationships with leading global VMS vendors who
now consider us one of their most importantpartners. At the same time, the number of system
integrators worldwide that use i-PRO cameras has
increased by 50% compared with 2019, and system
integrators who were rivals of Panasonic arestarting to use i-PRO cameras. In a few years, I
expect we will be able to reclaim our former lead.
But I will not be satisfied by that, because it will
only signify a change in the industry hierarchy. We
aim for market creation through business model
innovation. The built-to-order (BTO) model started
by Dell Technologies brought a new wave to the PC
industry. This is referred to as the Dell Model—they
can provide various customization because they
introduced a modular concept before others. i11

dream.

Becoming a True Global Company

i-PRO’s strategy should be realized on the global
stage. In fact, overseas sales have grown to 60% of
our business, and our major rivals are global
manufacturers. Next, I would like to discuss ourmanagement base for achieving victory over our
global competitors. When we speak of amanagement base, it refers to both “brains” and“brawn.” “Brains” describes the information system,
which is tied to finances, “brawn” describes ourorganization and human resources.
To support our “brains,” we replaced the oldsystem inherited from Panasonic with a worldstandard ERP package. We had only 18 months tocomplete the migration process. This created many
challenges, but the work was completed in
September 2022.
When we were a business division of Panasonic,
we only represented a minor contribution to thegroup’s overall sales of eight trillion yen. In otherwords, for Panasonic as a whole, i-PRO was no
more than a cost element. Consequently, in regards
to financial accounting, all we had to do was toreport once a month in the designated format tothe parent.
But after becoming an independent company,
the speed and granularity required for accounting
functions has completely changed. We need toknow day-to-day accounting information in minutedetail and in real time, such as revenue for eachproduct and client, individual inventory levels andout-of-stock items.
For this reason, we introduced a world-standard
key information system, and are driving initiatives
to significantly improve the quality and speed of
our accounting processes. In regards to improving
the quality, we hired a global cost controller tomanage cost efficiency for the various expenses,
labor costs, IT-related costs and so on throughout

Users can also easily download the software
needed to control the cameras and to analyze
images. After you unpack the product and connect
it to a PC, you can immediately begin image AI
experiments. If it does not work as hoped, the user
can replace the lens, sensor and/or interface andtry again. We will gradually increase the number ofmodular items, expanding our range to respond todiverse needs. For engineers forced to work on-siteat the client company, developing solutions
through trial and error, BTO cameras are sure to bea savior.
The leading actors in the AI market, in addition
to AI ventures, are engineers and programmers,
including students and tech geeks. i-PRO wants tocreate a new market for BTO cameras and promote
the advancement of AI by supporting such people.
In 20 years’ time, even in 10 years, we hope people
will mention us when looking back on theirprogramming or AI industry experiences. This is our
12the value chain, from procurement through tomanufacturing, logistics, warehousing and sales.
Regarding speed, we are building a data warehouse(DWH) and leveraging business intelligence (BI) to
enable each business division to act efficiently andeffectively. We also use cloud services for approval
work flow, expense management with the aim of
conducting these more efficiently.
In our time with Panasonic, staff from theaccounting division were dispatched to businessdivisions to provide accounting support. At i-PRO,
we still follow this convention, with a team of“Finance Business Partners” formed directly under
CFO. The team members attend meetings of eachdivision to deepen their understanding of businessactivities, whereby they can more deeply scrutinize
financial data, spot signs of risks and promote
countermeasures, notice strategic opportunities
and initiate action, and occasionally provide advice
and consulting to new businesses.
At the same time as reforming our “brains” weare also driving reform of our “brawn.” In the timeof Panasonic, we appeared much like a traditional
Japanese company, with a corporate structure
where the Japanese entity formed the backbone,and overseas subsidiaries were positioned asoverseas sales companies. The consequence of thiswas that feedback from overseas subsidiaries was
downplayed as mere information peculiar to that
region, and little attention was paid to it. The core
information was shared mainly in the Japanese
language among trusted Japanese colleagues.
With such homogeneous organizational behaviors,
we were unable to immediately detect globalchanges in the industry structure.
Having reflected on this, we reconsidered ourorganizational structure from square one. We
discarded the idea of a Japanese headquarters andoverseas sales subsidiaries, revising ourorganizational structure to transcend borders,considering how to optimize i-PRO’s structure,comprised of over 1,300 people worldwide. Now,
our officer responsible for global development in
the surveillance camera business is based in the

United States, the key global market, from where
he directs Japanese R&D team. The business leader
for medical spectroscopy cameras is an American
based in the United States, to whom those
responsible for the business in each country report.
They say that the organization follows strategy, andin the same manner, the first task that the CHRO set
to address was building a common global humanresource system so that we could reform theorganization quickly to respond to changes andrevisions in global level strategies and tactics. For
this, we introduced an integrated human resources
system called Workday to operate our grading,evaluation and compensation systems globally.
Because of this, we can plan and evaluate
personnel under the same criteria, even in crossborder organizations.
At i-PRO, we employ officers responsible for IT,
finance, and human resources who accept diverse
values and who understand global standards.
Reform of our brains and our brawn is naturallyaccompanied by pain, but we drove reform throughcollaboration between talent from the old
Panasonic, who are very familiar with the business,
and new talent who understand the global
standard management base.

i-PRO’s Professionalism
In order to reform the organization, it is notenough to only reform the “hard” aspects oforganization design and the human resources
institutions and systems. Our mission is to “Do ourbest for those professionals who create a safer andmore peaceful world.” In order to understand thethoughts and feelings of such professionalcustomers, it is necessary for every member of thei-PRO team to be a professional.
The root of the word “professional” is said to be
the Hippocratic Oath, under which doctors inAncient Greece were required to “profess” (swear)
to the gods. The oath included aspects of the ethics
13and attitudes expected of a person who engages inmedicine, such as sharing knowledge without
reservation, not discriminating by gender or status,and ensuring not to leak patient information. But
the most important that we should note is prioritize
the benefit of the patient. In the same way, the only
thing that a professional should prioritize is benefit
to the customer.
What is the nature of a professional’s work? At iPRO, we believe the work of a professional iscomprised of four elements: to pursue specializedskills, to exercise leadership, to provide support
and assistance, and to hand down specialized skills
to the next generation. It is acceptable for aprofessional to specialize in and pursue just one ofthese elements, or to strengthen multiple elements.
We recommend that employees decide bythemselves what kind of professional they aim to
be and devote themselves to that.
Even if their roles are different, one common
aspect that is required of these four elements is toconsider your own intention and act upon it, and tohave the humility to accept the evaluation of others(360 degree evaluation). While we ensure thediscretion and freedom of the individual in this, wemust caution against egoism and expect
moderation and discipline, always remembering
consideration and support for others. While somebelieve in the market value of human resources, iPRO aims to be a collective of high market value
professionals.
We strive to redesign our human resources
system based on the idea of fairness in order tonimbly activate our professional collective. This ofcourse includes gender-based discrimination, butalso age, nationality, race and other suchdifferences. Recently, people are calling for theneed for diversity management, but this is a given
in a professional organization. Under our mission,
whether it be myself, the CEO, or a young new hire,
all of us are equal. There should be no peerpressure or hierarchical deference. It is essentialthat we establish a fair human resources system toguarantee an organization without such deference.

To this end, we must challenge Japanesecommonsense and customary practice. For
example, we took the scalpel to the mandatory
retirement age system. In the time of Panasonic,
there was a system where, upon reaching a certain
age, employees were stripped of their managerial
position and their remuneration was cut
considerably. This system is typical in Japan, butsuch an arrangement contravenes a major rule of aprofessional organization that employees should
be granted opportunities according to their abilities
and motivation and compensated according totheir contribution. We revised this system ofmanagerial position age-related retirement, to asystem that determines rank according to ability
and motivation, regardless of age, and bases
remuneration on evaluation of contribution. As it is,Japan is the only advanced country with amandatory retirement system.
We also changed our policy towards non-regular
employment. In principle, we believe that
discriminating against non-regular employees
contravenes professionalism if someone has thesame ability, motivation and makes the same
contribution as a full-time employee. This is areflection of the values characteristic of aprofessional organization of meritocracy.
We are also implementing a program known as iPRO - Building the Future (BtF) that promotes
reform not only in the area of systems but also inawareness. We provide opportunities fordiscussion by all employees, regardless of affiliationor position. For example, we convene monthly
forums for free and original discussion, including “Ilove i-PRO Products!,” where we discuss i-PRO
products, and another where we discuss and learn
about career and personal growth. I also lead aforum called “Strategy Sticky Note Room,” amonthly symposium where I explain our strategic
intentions to employees. The idea for this Strategy
Sticky Note Room was my memories of writing
business strategy ideas on sticky notes and sticking
them all over the conference room wall when I wasyounger.
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Each of these BtF forums, which emphasize
speaking out, regardless of content or eloquence of
expression, are much appreciated by participants.
There is no doubt that such ongoing positive
experiences outside of the workplace lead topeople taking proactive action naturally, andnurture a sense of oneness within the organization
In addition to providing these opportunities, we
introduced Objectives and Key Results (OKR) as aprofessional management system whereby each
person can exercise discernment and make an
independent contribution towards achieving theaims of the whole of i-PRO and the division withwhich they are affiliated. OKR was developed atIntel and has produced great results at start-up
companies including Google, recently gaining muchattention. Under OKR, we set objectives forrealizing our vision, and key results that indicate
specific standards and initiatives for achieving
these objectives. Even at i-PRO, everyone from theCEO down sets up, publishes and sharesorganizational and individual objectives and key
results. (See Table 7 OKR vs. MBO.)
OKR resembles but differs from conventional

management by objectives (MBO) in that we do notuse it in performance evaluations and personnel
assessments. Its concept is that using rate ofachievement of objectives in evaluations actually
has the opposite effect of the original aim of MBO,
which is to coordinate objectives of theorganization.
At i-PRO, OKR is a tool for individuals to use to
motivate themselves. We do not intend it as ameans for the company to control the individual.
For this reason, the company does not enforce
implementation of OKR, entrusting it to the
judgment of each division and individual. Naturally
then, the company does not caution or discipline
divisions or individuals who feel they do not need
OKR. It is up to the individual themselves if theychoose to set OKR and implement the system totackle challenging goals, or if they use their own
system. In other words, as professionals, they are
expected to think and act by themselves, including
whether or not they set OKR. Actions and results
are reflected in evaluation by colleagues both
directly and indirectly. Everything is evaluated by
the market.

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Next, I will introduce my own objectives, that is,
the i-PRO Corporate Objectives.
i-PRO Corporate Objective 1: 80% of i-PRO’s sales
to be comprised of products that were not yet
released two years ago.
i-PRO Corporate Objective 2: 80% of i-PRO’s sales
to be comprised of products that can be shipped
within three days of receipt of order.
i-PRO Corporate Objective 3: Products developed
under the i-PRO Quality Management Systemhave fewer quality defects than products
developed under the Panasonic Quality
Management System.
I have deliberately avoided sales or profit
objectives, which are usually included in MBO. In
the event that we realize the above objectives, I am
sure that i-PRO will have outstanding achievements.
These three objectives are not for financial
numerical values. Instead, they indicate the issues
that each division and individual should tackle andpromote capability enhancement. For example,
objectives are not “to win at the athletic meet” or“to come first in the contest.” Instead, they implore
people to develop and train themselvescontinuously day-to-day. Through accumulation ofsuch diligent efforts, one is sure to achievefavorable results at an athletic meet or contest.
Perhaps finishing first is not just a dream.
We aim for just such an organization, where
professionals can demonstrate the abilities they
possess. In the end, the mission of CEO is to nurturetalent. I believe that if I can constantly stimulate theorganization and its members, to help members
see their abilities bloom, and to support thatgrowth, we can become a standout company thatrivals cannot catch.

Follow this link for the latest
information on i-PRO.
https://i-pro.com/corp/en/

October 2022

© i-PRO Co., Ltd. All Rights Reserved.
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