The “three-new” programme: a permanent 30% new-product rule (1975)

The discipline of setting yourself a number

What distinguishes this decision is that it was not a retrenchment forced by financial crisis but the institutionalisation, as a permanent management discipline, of a mechanism for producing new products continuously. When the oil crisis shook sales to manufacturers, Hijikata Saburo imposed on himself not cuts to headcount or businesses but a numerical target — products launched within three years to make up 30% of sales — and a promise to spend about 5% of sales on R&D. The cross-functional SPG organisation was the device that turned that discipline daily in development and in the field. He was trying to build a constitution that did not entrust results to the business cycle, out of internal development capacity rather than external demand.

The discipline of deliberately setting oneself a figure of 30% stayed with Nitto Denko for a long time. The 1988 change of name expressed the shift from a specialist in electrical insulating materials to a functional-materials company. The polarizing film whose volume production began in 1975 grew, thirty years on, into an LCD polarizer business with a world-leading share. The later strategy of staying close to top-tier customers, avoiding price competition and taking the top position in a niche, is an extension of the same refusal to let renewal lapse. How far a self-imposed number can sustain the changing of the old for the new — on that question, the three-new programme left half a century of one answer.