One third of the startups founded today do not survive more than 10 years, so when a company turns a century it must be studied.
The Japanese electronics firm Panasonic began manufacturing independent parts and then expanded to produce complete home appliances. The company survived World War II, benefited from the post-war boom period, and struggled to navigate the political fallout from the conflict.
It weathered several economic crises that forced it to pivot its business model several times; it has expanded globally and today continues to look to the future of technology, now through a collaboration with Tesla. Here is a brief history of this company’s first century.
Panasonic was founded on March 7, 1918 by Konosuke Matsushita, a 23-year-old electronics enthusiast. Previously, he had been living in a two-room house with his wife, Mumeno Iue, and his teenage brother, Toshio.
After working as an apprentice hibachi – traditional Japanese cuisine – and a bicycle manufacturer, Matsushita went to work for the Osaka Electric Light Company. At night he worked at home to design new appliances until one day he developed a new type of light socket.
Despite the discouragement of his supervisor who did not believe in the importance of the product, Matsushita and his family began marketing the devices outside his home. These were such difficult days that they even had to sell some of their most valuable possessions to make ends meet.
Matsushita was not discouraged, and although he was experiencing financial problems, he diversified his product offerings to develop insulation boards for electric fans and a bicycle headlight that proved to be a commercial success.
Matsushita and his family moved into a small house where they founded the Matsushita Electric Housewares Manufacturing Works.
The young entrepreneur quickly expanded the company’s product line to include two-way plugs and several other unit products. By the end of 1918, the company had grown to 20 employees.
Matsushita was ahead of its time in its management approach. When the company was two years old and had 28 employees, it formed what it called the “Hoichi Kai”, which translates as “one-step company”. Through it, he brought his employees together for sports and other recreational activities.
Another unconventional leadership tactic led by Matsushita was transparency. In the early 1920s, mass layoffs of workers were a major problem in Japan, first because of competition among companies, then because of the economic recession.
Matsushita’s philosophy was to have faith in its team so it shared business secrets even with new employees to build trust at all levels of the organization. By 1922, Panasonic had 50 employees and a new factory.
However, in the late 1920s the inventory began to accumulate. To clear the material backlog, Matsushita announced its decision to “cut production in half without laying off a single employee.
He said, “We will cut production in half not by laying off workers, but by making them work only half a day. We will continue to pay the same salary they receive now, but there will be no vacation. All employees must do everything possible to move and sell the inventory. The plan worked and generated employees who were fiercely loyal to the company.
MaAlways a long-term visionary, Matsushita proposed a 250-year plan for the company, divided into 10 25-year periods that would in turn constitute a 10-year construction phase, a 10-year active phase and a five-year compliance phase
This might make Matsushita seem like a neurotic micromanager, but in reality he was a fairly equal leader. “A manufacturer’s mission is to create an abundance of materials by providing products as accessible as tap water,” he famously declared in the midst of the Great Depression.
Want to know more? just visit Panasonic Singapore for more info.
