Equation of the Strongest Company

Three young people in one room of an apartment. How to fight to win business?

February 2006, Precena was born in small room of the apartment. CEO Takada was 31 years old, COO Suzuki was 25 years old. There are only 3 young people in Precena, and we were discussing what we should do. At the beginning, we survived with some consulting deals. But after a half year past, we thought we should have products and develop our business based on them. And we made training program based on the book wrote by Mr. Takada, and it was first action to enter training business.

But situation was not so easy. There are some major training company in Japanese market, and most clients did not accept Precena’s offer. Precena had only half year history as company. Instructor’s number and quality were not so strong, because we had only 3 people. We really struggled to consider how to fight.

Standardization strategy based on the experience in Mabuchi Motor

At that time, we reminded some words of Mabuchi CEO that Mr. Takada heard in previous job. “If we can make excellent motor, we do not need to go sell them, but customers would make line and purchase our motors”. Also in Mabuchi, standardization strategy does not mean standardization of motor, but standardization of “parts” of motor. Final products need customization by each client, because their demand is different. But Mabuchi should know the most about core parts of the motor that can secure the performance of motor, and Mabuchi should offer the best core parts to clients. Also Mabuchi CEO said, “Standardization strategy does not mean to standardize many things after they are developed, but make a standard first and develop many things in line with the standard.”

This is a typical product-out way of thinking, but we thought this is what we need to do. This is the moment we noticed that training material is the same wit motor. Sales activity is not the strong point of Precena, and we should not fight with it. But if we utilize our development power as consultant and writer of logical presentation, and create attractive training program for each client, clients should come and purchase our service. But it is not profitable if we develop from zero for each client. So we standardize parts of training program, and customize and assemble them according to client’s needs with good cost performance. And when we develop training materials, we always pay attention on standard. This is the background and reason why Precena has thought of maker and product-out.

Equation of the strongest company

After that, we noticed there are certain Equation for company. If we can fulfill 5 elements of the equation perfectly, the company can be stabilized forever being loved by both clients and employees. We named this equation as “equation of the strongest company” and keep sharing it to all new employees when they join Precena. Here we would like to share summary of them.

careers-strongest

1. Offer better service than what in current market

This is one of the basics of business, but if service / product are not good, customer cannot continue business with us. Definition of “good” can be discussion, but in our training business, we think good means following three points

  • making training material with proper story line and proper case studies for client’s situation
  • conduct training with the material within required schedule of the training
  • Instructor teach necessity of taking action and specific way of doing based on the client concern shared by sales person.

2. Offer the service at cheaper prices than market price

This is also one of the basic of the business. Even if we offer good service / product, if its price is too high, nobody would not purchase. But one of the important points is “market price”. We do not think we should put lower price than bad quality service, but we are try to put cheaper price than other services that has same quality and benefit for clients. Then this will be big merit for client, we think.

3. Salary of employees is high

If we can fulfill above 1 and 2, possibility to keep business with clients can be higher, but if we cannot keep offering service because of Precena internal structure, there are no meanings. High salary is one of the necessary points to have high level employees in Precena. This “High salary” also does not mean high without any reasons, but means higher salary than other companies in same kind of market.

4. Employees can leave office earlier

Even if salary is high, if employees need to work long time every day including week end, it’s also no meaning, we think. Important point is salary per hour, total salary amount based on proper work life balance. But unfortunately, we have room for improvement on this point under development stage of the company. In general, situation is not “Hard working”, but some people like top management are working long time or on week end, so we would like to improve situation hiring new colleagues.

5. Employees enjoy their work.

Last point is also important. Even if salary is high and you can leave office earlier, if you do not think there is a meaning in your work or it is not fun, you cannot keep working long time. We would like all our employees to do the work that they can feel fun through contributing society, contribution to the company and their own growth. This is very important view point to think Precena’s job as life work.

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