Breaking the dependence on artillery shells: the pivot to bulldozers (1956)

Planting the next pillar before the demand disappears

The crux of this decision was that, in the middle of enormous demand, Komatsu was already looking past the day that demand would vanish. The artillery-shell boom was a thick stream of income that saved the company, yet Komatsu did not stake everything on it; alongside it, the firm quietly built out integrated bulldozer production. When the special demand thinned, it did not scramble for a replacement — because it had been raising the next pillar all through the good years, the conversion of the Osaka plant could proceed without a hitch. It was this restraint — never entrusting the company’s future to the boom in front of it — that quietly carried the pivot through.

No single stream of demand is guaranteed to last. The thicker the procurement boom in front of you, the deeper the void it leaves when it recedes. Komatsu slid smoothly from shells to construction equipment because it had seeded the next business at the very peak of demand, and the Komatsu that competes worldwide as a construction-equipment maker today traces back to that choice. How to ready the next pillar before the current breadwinner thins — for any company in an industry that hands its results to the swings of the market, this question has not grown stale.