Rebuilding the top: collegial rule and three divisions (1973)

Not how big, but which mix of businesses carries the strength

The heart of this decision is that it answered no financial emergency: the founder went into the organizational strain that rapid growth itself had produced. Building a world position in the specialized market for electron microscopes was a success that also left the company heavily dependent on one founder’s technical judgement and personal pull. When Kazato abolished the executive committee for collegial decision-making and announced a three-division structure and a retirement age for the presidency in the same breath, it can be read as dismantling that dependence himself, remaking the company into one that could bear the next stage of growth. Taking apart the limits of one-man rule while the business was still doing well gives this succession a character unlike most.

The build-out for attack, however, ran straight into the oil crisis and the retrenchment it forced. Parts of the diversification aimed at civilian and mass markets bore no fruit either, so it would be hard to claim the reform translated directly into results. Even so, the skeleton survived — a multi-axis structure binding medical and industrial equipment around a scientific-instruments core, and decisions taken collectively — and the same axis was tested again at later turning points, in the rebuilding after Lehman and in the concentrated investment in semiconductor metrology. Rather than chasing scale, which mix of businesses best puts your own strength to work: the decision is instructive for placing that question at the centre of management so early.