Sakane’s “Dantotsu” reform and the V-shaped recovery (2001)

A company that grows stronger with each generation

The heart of this structural reform was that, having taken the pain of losses all at once at the bottom of the cycle, it did not stop at cutting. While it pared product lines and compressed fixed costs, it simultaneously nurtured products rivals could not catch for years and a system for capturing machine operation remotely. Advancing defensive restructuring and offensive differentiation together, rather than as separate things, is what turned this into not a mere bottoming-out of earnings but a lasting lift in profitability. It is a case in which the skill of the design — how deeply to cut at the trough and what to grow at the same time — decided the quality of the rebuild.

Chairman Masahiro Sakane described this management with the phrase “a company that grows stronger with each generation.” Rather than ending it at a one-generation rebuild, he left behind, as a company template, a system for staying connected to customers through operating data — the “visualization” that began with KOMTRAX would be handed on to the later Smart Construction and service businesses. Can a manufacturer that sells a machine and is done keep generating value after the sale? Komatsu’s V-shaped recovery can be read as one answer — one that turned a crisis into an occasion for building a template.