Corporate reorganization in large companies trying to find the right mix for their business to stay lean, mean and innovative can be an agonizing process (1); the process itself generally involves two choices: form a new division within but separate from the corporate organization, or establish an entirely separate subsidiary for the same purpose. While either approach is effective for strategic innovation, each has always raised a critical issue in large Japanese corporations about how the cultures of old and new can be joined and how such separate organizational structures can hope to achieve long-term harmony.
The harmonious "marriage" of old and new cultures may seem inconsequential to many Western business leaders, but it has stood out like a sore thumb for the past decade, especially among large Japanese corporations with long histories of harmony, consensus building, and company traditions that must be addressed in any reorganization effort to make a company more innovative. Overcoming these problems requires vigorous leadership from top management and a revolution in corporate culture.
For large Japanese companies, the issue is not only whether to organize management in a division or a subsidiary but to first identify the elements of organizational management essential for the firm to support strategic innovation characterized by speed and excellence on the one hand, and some venue for harmonious fusion between the cultures of old and new on the other. This article describes how the management at NTT DoCoMo, Inc. (hereafter, DoCoMo) and J-Phone Co., Ltd. (hereafter, J-Phone) approached this problem, launched their successful businesses and integrated old and new in their corporate culture through a management style I call "strategic community management."
Strategic community is based on the concept of ba as a shared space for emerging relationships that serves as a foundation for knowledge creation (2). Participating in a ba means transcending one's own limited perspective or boundary and contributing to a dynamic process of knowledge creation. In a strategic community, members--including customers who possess different values and knowledge--consciously and strategically create a ba in a shared context that is always changing. They continually create new knowledge as a new ba by merging and integrating a single ba or multiple numbers of ba.
Strategic community is defined here as both emergent and strategic. It is a collaborative, inter-organizational relationship that is negotiated and associated with creative yet strategic thinking and action in an ongoing communicative and collaborative process, in the case of several arrangements (e.g., strategic alliances, joint ventures, consortia, associations, and roundtables). It depends on neither market nor hierarchical mechanisms of control (3, 4).
Strategic community is applied, for instance, in cases where enterprises are in a management environment beset by numerous uncertainties, where predictions are difficult and management is searching for valid strategies. The task of a strategic community is to form and implement concrete business concepts and ideas. Trial and error is necessary, however, and a strategic community expects that a strategy will emerge from among the collaborative actions.
For the most part, middle management is at the center of the strategic community. They form informal and virtual teams both inside and outside the company, including customers, and actively generate entrepreneurial strategies and create new knowledge (5). They then stimulate new demand that did not exist before, which in turn results in the emergence of a new market.
The challenge facing Japanese companies in the 21st century is how to create strategic communities to promote long-term innovation, revitalize the organization to keep it focused, and create new business opportunities. Generally, Japanese managers are adept at working in traditional, "real time" environments with their co-workers but are "managerially-challenged," so to speak, to form strategic communities with those outside the traditional workplace or to use information and knowledge garnered from resources whose origins are not "in-house. …