The Grand Design: pooling customer data held branch by branch (1993)

Solving a financial problem as a question of sales method

Read the 1993 Grand Design as an early anticipation of “DX” and you miss the point. What set it in motion was not technology but debt — ¥86.8bn of borrowings, about half of annual sales. Where the only ways to reduce them were to sell more or to cut more, what Otsuka Yuji chose was to consolidate customer information that had been held branch by branch into a single file, and to reorganize the sales force so that the same number of people could sell more. The character of the plan shows in exactly that: a financial problem, solved as a problem of how selling is done.

It did not work at once. Recurring profit in the year ended December 1993, when the plan was settled, was only ¥1.15bn, and by the year ended December 1998 earnings had fallen for the first time since the founding, to ¥1.7bn. Otsuka Yuji himself names 1998 as the year the core-systems work began, which suggests something like five years between drawing the picture and the shape of the company changing. That Otsuka Minoru was in the same period moving the front line by rebuilding the personnel evaluation system should be counted among the causes as well.