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Dentsu's Agenda for the 1990s: Preparing for the Advent of the 21st Century Network Society(1989)

1989/12/01
ビジネス

I. The Advent of the Network Society


In the next fifteen to twenty years, corporations and the social climate in which they find themselves will undergo a radical transformation: the advent of the advanced information society. Not only will the whole gamut of markets and industries that handle information flourish, but changes will occur that shake societal norms and values to the core.

The changes that the advanced information society will bring about can be summed up in a nutshell as the enrichment of society and the deepening and diversification of social communications thanks to the development of various electronic network technologies. If the archetypal communications tools of advanced industrial society are to be sought in the telephone network, the broadcast station, and the giant computer, then the corresponding trinity in the advanced information society will be optical fiber, high-performance TV, and countless computers everywhere.

The full range of communications tools from the massive -- television -- to the miniature -- the phone -- will converge into a colossal unifying network blanketing the whole of society just like the synapses of the brain. Our perceptive faculties will transcend our bodily limits to penetrate every nook and cranny of the globe via these artificial synapses.

Among the lessons of history is that many societies have, over the course of repeated development, prepared for these types of economic and social changes by generating new societal norms and values in the form of philosophies, views of history, and art. Should one seek similar changes in thought in contemporary times, postmodernism and post-structuralism immediately come to mind.

However, to describe such processes is not our main purpose at this juncture. The question of new societal norms and values will be explored in simple terms below. The point that we wish to make here is as follows.

This transformation in the fundamental structure of society will force the individual to change not just his or her lifestyle but very philosophy of existence and way of living as well. It will likewise compel companies not merely to overhaul intangible management assets like organization and corporate philosophy, but to reconsider seriously what their basic role and significance is in the first place.

Considering the nature of the advertising business -- its dual commitment to the individual consumer and to the corporate sector -- and especially in light of the fact that we have adopted "Communications Excellence" as our company slogan, it would surely be highly significant were Dentsu itself to play the role of weathervane, as it were, by acting as the harbinger of change to both individuals and companies. Indeed, we have a social responsibility to do as much.

The role of weathervane, however, will entail considerable pain. After all, sweeping transformations in the social and corporate fabric could well render instantly obsolete our diverse arsenal of technologies in the fields of marketing, creative work, and media transactions -- areas where we consider ourselves to have built up a vast store of knowledge. If a media VAN1 is put in place down the road, the very system of media commissions that is the cornerstone of the advertising business -- and, by extension, the essential role and significance of the advertising business itself -- will inevitably face a fundamental overhaul.

The key is to chart a fresh course and advance boldly along it, unhampered by the old tools and paradigms of the trade. That will require each individual to become more receptive to the future and flexible enough to adapt to new sensibilities. But the industry got off the ground in the first place precisely because our predecessors at the dawn of advertising possessed these qualities. Today, without a doubt, we are witnessing the advertising business experience its second bout of birth pangs.

Societal norms and values do not undergo dramatic change over the course of daily life in a way plain to the eye. Nor are they of such a nature that they evolve in orderly fashion as imposed from above. For a company, transforming norms and values requires that individual employees dismantle and replace their existing framework of ideas on their firm and their careers. Inevitably, this process is a personal, psychological one, involving the accumulation of an infinite number of tiny changes.

In that regard, the present paper is intended to be more than simply a report written by a member of the Dentsu team for the uniform eyes of his fellow employees. It is a personal message from myself directed to the staff of Dentsu as individuals with differing lifestyles and identities: citizens and consumers, devotees of Bacchus, early morning joggers, connoisseurs of the arts, couch potatoes, men and ladies with a life after work.

II. The Values of the Network Society


The Paradigm of the Advanced Information Society project, conducted by the Ministry of Finance's Structural Economic Changes and Policy Research Committee under the chairmanship of Koyama Kenichi, identifies the following six characteristics of the new system of values. (Numerous other scholars and commentators have described the characteristics of the new paradigm in various forms. Here, however, we adopt the terminology currently regarded as most "official.")

1) Individualization and customization

2) De-centralization

3) Liberalization

4) Deideologization

5) Globalization

6) Human dignity and reassessment of values

Here is my own simple exegesis of what these ideas mean.

1) Individualization and customization

In The Lonely Crowd, 2 Riesman emphasized the anonymity and uniformity of the individual in advanced industrial society. Terms such as "the sub-masses" and "the little crowd" popularized several years ago in Japan describe the tendency for the general populace to subdivide into smaller groups, as society grows more affluent. The logical outcome of that process is for all individuals to take on a separate identity.

To put it more impressionistically, individuals were once identical entities like the balls of a pinball machine. Gradually, however, they became more like molecules possessing a vast range of different attributes. Now they are evolving into dynamic macromolecules that split and fuse and have a complex structure like DNA.3

2) De-centralization

Nightmares of science fiction such as 19844 and Brazil5 in one way embody our vague antipathy to the mammoth computer. However, the old dread that improvements in computer processing capacity would result in ever greater control of information and concentration of power as information flowed more and more in one direction has clearly proven unfounded.

Today, countless compact computers scattered virtually everywhere carry out distributed processing of information. Processing occurs over a network in such a way that only the necessary information travels back and forth. (This is analogous to the brain.) The evolution of such decentralized networks means inevitably that information flows increasingly in both directions and is becoming ever more diversified, while ways of accessing it are proliferating. In this ubiquitous form, it will prove highly resistant to unified control. At the same time, once-centralized power structures will become de-concentrated in the same manner as information itself.

3) Liberalization

Individuals who, like the balls of a pinball machine, lack individuality act in groups and fall easy prey to demagoguery. The sole source of motivation for a highly individualistic, DNA-type personality, however, is his or her own resolve. In such a society, each person is permitted to adhere to a free, divergent set of values based on the particular information he or she holds. Moreover, as power becomes more diluted and decentralized networks evolve, the information in which these multifarious sets of values are rooted will diversify even more.

4) Deideologization

As information becomes ever more freely available and diversified, and new advances are made in information processing technology, attempts to explain and control all aspects of human conduct and society in accordance with a grand ideology will become increasingly meaningless. Instead there will be a growing tendency to try to solve problems using pragmatic thinking based on real life and actual experience. (This is nothing less than perestroika.)

Idealism will have the carpet pulled out from under it. Rational persuasion rather than compulsion by authority will motivate people to act.

5) Globalization

Various global information networks are emerging, with the financial markets blazing the way. Ever more inextricably bound together by these networks, different societies are becoming increasingly interdependent. The "global village"6 envisaged by McLuhan was born of television and is being brought to maturity by today's electronic networks.

The stock-market crash of 1988 will without a doubt go down in history. People around the world saw and experienced for themselves the chain reaction of financial markets across the globe plunging into a panic as the sun rose over each in turn. It was the essence of the global network in action. Multinational corporations may ultimately find their true calling in furnishing the infrastructure upon which this network operates.

6) Human dignity and reassessment of values

The enrichment of society and increasing sophistication of information processing technology will afford us greater ease and leisure. In advanced industrial society, people turned a deaf ear to their own true wants and desires. In their pursuit of material affluence and convenience, they immersed themselves in the game of economic competition, a desperate race to commercialize anything that was "different." Dentsu was without a doubt a frontrunner in this game. But the wave of economic rationalism spread far beyond the market, until today it is causing the disintegration of family relationships. Hereafter pride of place will be given to people's intrinsic dignity and values and the tender, irreplaceable links between fellow human beings. Considerable energy will be expended on rebuilding ties of friendship and bonds of family as the backdrop to human existence.

III. The Course CED Dentsu Should Steer in the Network Society


The name "Dentsu" is written in Japanese with the characters 電 "electronic" and 通 "communication." By sheer coincidence, these are both keywords that succinctly sum up the nature of the network society. No doubt there will come a day when the most valuable asset we have in terms of corporate identity derives from the very name "Dentsu" itself, a product of chance that at one time was less than apposite as the banner of an advertising firm.

Next, I should like to elaborate on the observations made so far to consider the question of what course CED Dentsu should steer in the network society.

1. Where once knowledge was power, the ability to think will now gain you admirers. Insiders are out, freedom of information is in.

In a society where the flow of information is restricted, knowledge is synonymous with advantage. People try to maximize their edge by insofar as possible not sharing with others the knowledge they obtain, but monopolizing it instead. Thus emerges a society of insiders and outsiders. Today, however, databases are spreading, while networks and other routes for obtaining information are proliferating. An age is coming when access to information will be much easier. The morals of society with respect to information are evolving in step. There is a growing tendency to prohibit the monopolization of knowledge or the acquisition of profit by being the first to obtain it. Examples include prevention of insider trading and disclosure of information.

In a society where information is as widely available as possible, individuals will interpret information and endow it with meaning in accordance with their own unique values. Quantity and quality of information flow and diversity of interpretation and meaning will determine corporate winners and losers. Instead of processing information in conventionalized fashion using the established framework (organization) and tools (processing technologies), the key is to remain flexible by creating a fresh framework and set of tools on each occasion. The kinetic dynamism and diversity of knowledge, rather than secrecy and power, will come to be the essence of CED Dentsu's activities.

2. From a one-trillion-yen company to a 130-billion-yen business. Profitability over sales. Value added over input.

Creating information is not like manufacturing a physical product. One cannot measure the outcome on the basis of the amount of material that is input. In the case of manufacturing a product, the quantity produced is basically parallel to the amount of input. But when it comes to creating information, even with the same amount of input, the value added that results displays tremendous diversity depending on the individual and the approach.

In the manufacturing-based society, volume of sales long served as the yardstick of corporate activity. The immediate goal was to sell more and get bigger. With the emergence of the software-based information economy, value added in the form of profit will serve as the new yardstick. Companies will ask themselves how much value added, how much profit they have created for society.

Transactions in categories other than the four major media and overseas advertising, which have a fluctuating rate of return, now account for almost 30% of Dentsu's business. (In 1988, the figure was 29.0%.)

Now that we have accomplished our goal of becoming a one-trillion-yen company, it might be worth considering an overhaul in attitudes by setting ourselves a fresh objective: achieving \130 billion yen in profits -- not necessarily as an accounting target, but as a source of inspiration for the individual employee.

3. Where once the company was merely a place of work, now it will become a place for the pursuit of happiness. Recognition of diversity will replace centralized management.

The most crucial question facing corporate managers in the future will be how to ensure the happiness of their employees through work. Let me not be misunderstood. Of course, no-one would dispute that paying dividends to shareholders and benefiting customers and business partners will continue to be the raison d'etre for the joint-stock company in capitalist society. However, the methodology whereby that mission is pursued will inevitably have to undergo radical alteration.

Traditionally, corporate management has involved finding ways to control and direct the uniform, anonymous, easily swept-away individuals who constitute the infinitely tiny cogs in the corporate machine. From now on that will change. The new task will be how to motivate diverse, autonomous individuals to seek their own directions. The lion's share of corporate management decisions will be made on the front lines in accordance with conditions on the ground, the one exception being company-wide decisions taken by the top brass.

(Meanwhile, in parallel with this change, corporate management systems will shift from concentrated processing using mammoth computers to processing over decentralized networks. That in turn will reduce the cost advantages of centralized management.)

Concrete theories on incentive systems for permitting greater diversity are already being put into practice on an experimental basis, most notably among cutting-edge firms and, conversely, in the smokestack industries, where traditional centralized management systems are beginning to show signs of serious breakdown. Here, therefore, we shall content ourselves with providing a brief rundown.

- Adopting diversified working arrangements (working at home, flextime, etc.)

- Adopting diversified hiring arrangements (hiring by job type, hiring contract employees, etc.)

- Minimizing management organization and middle management

- Object management systems (self-declaration systems for management targets)

- In-house entrepreneur systems

Once these systems recognizing greater diversity are implemented, their success will depend on the degree of self-motivation of the individual employee. Given Dentsu's unique corporate climate, however, I am extremely optimistic.

4. Committees and project teams will replace divisions and departments as static forms of organization give way to something more dynamic.

The essence of profit-making activity in the advanced information society can be described in impressionistic terms as follows (and without using the popular buzzword "fluctuation" too): Giving concrete form to the constant flashes of lightning that run through the network will produce value added.

As far as organization is concerned, structural changes within the network are themselves the key thing. The day will come when static forms of organization cease to possess that much significance. (Nonetheless, it should not be forgotten that dynamic organizations will be capable of functioning as profit-generating bodies, as long as the preconditions of the advanced information society are fulfilled, such as disclosure of information and installation of infrastructure in the form of a vast network.) Committees and project teams constantly monitored for profitability and versatile enough to adapt to changes in functions and operations could well come to form the nexus of corporate activity.

Today, in many companies, the transition is underway from pyramid-shaped hierarchy to a flat organizational configuration like a Japanese paperweight, in which middle management has been considerably slimmed down. The next step will be the evolution of "dynamic" forms of organization.

5. Don't just expand overseas, globalize from the inside: The true nature of the worldwide network.

Economic liberalization has accelerated the flow of money, credit, labor, and merchandise between countries, reducing the significance of national borders. Liberalization of information via global networks will render those borders virtually irrelevant. As English gains ascendancy as the world's lingua franca, companies will find themselves facing largely similar consumers, sets of values, and markets in the network-infrastructure-equipped "triad" zones centering on Japan, the United States, and the EC.7

The distinction between multinational corporation and local player will become even more pronounced than it is at present. Naturally, advertising firms too will be forced to choose between going global and catering to the local market. Given that CED Dentsu has picked the former option, it will need to reorganize itself such as to be able to provide the same level of service overseas as Japanese companies enjoy at home.

How much headway will the Japanese-style personalized approach to business make overseas, where commercial practices differ radically? Even if we do decide to export the good parts of Japanese-style management, we will need to standardize and systemize our own business methods and criteria of service such that non-Japanese staff in other countries have access to them too, yet avoid reducing standards.

The exact significance of Dentsu's expansion overseas will come into sharper focus with the adoption of new management techniques, including an advertising management system run via electronic network. In that regard, the immediate challenge facing us may be to globalize from the inside first.

IV. Conclusion: Achieving a Balance between Personal Life and Career
Until now, your average Dentsu overachiever has actually been something of a failure when it comes to being an ordinary citizen. He does not watch TV. He is ignorant of the latest commercials. He never takes a stroll through town. On the other hand, is a company where the individual's personal life and career completely overlap really such a wonderful thing? I hardly think so.

In the coming network society, the interplay of personal life and career -- the way they overlap and diverge -- will become a wellspring of vitality. Sometimes one will gain on the other. At others they will take separate paths. Though independent, each will enhance the other in a truly balanced relationship.

To take a slightly broader perspective, we can expand personal life to include culture in general and career to embrace the whole of the economy.

In the 21st century, it is to be hoped, Dentsu will become just such an open-minded company, where employees know how to be versatile. With that message from me personally to all the various members of the Dentsu team, I bring this essay to a close.

Notes.

1. Media VAN.

An online system that carries information on media sales and space available. Depending on the terminal used, you can retrieve data or even implement media transactions. In the future, billing and payment and procurement of (electronic) materials will probably be computerized as well.

2. David Riesman, The Lonely Crowd

The bestseller whose portrait of American society and the American citizen in the 1940s presaged the coming of advanced industrial society.

3. Moral revolution. Deleuze and Guattari, A Thousand Plateaus

This work advocates the expansion and rehabilitation of individualism in the struggle to overcome the modern and describes the kinetic dynamism of the individual in the context of post-structuralist philosophy. The concepts of "machines" and "the body without organs" are especially famous.

4. George Orwell, 1984

A science-fiction novel that describes a future state ruled by a brutal bureaucracy. The author wrote it out of alarm at the rise of Nazi Germany and Stalinism.

5. Brazil, directed by Terry Gilliam

A science-fiction movie that, like 1984, offers a sardonic, twisted portrait of a fin-de-siecle world in the near future.

6. The global village. Marshall McLuhan, The Gutenburg Galaxy

The concept of a world united by the far-reaching power of television, which each individual can watch synchronously with the rest of the world.

7. Triad. Kenichi Ohmae, Triad Power

The close collaborative relationship that has arisen between Japan, the United States, and the EC through joint research and development and constant interchange of ideas. The author argues that, as concentration of capital grows, multinational corporations will need to establish a firm foothold in all three strategic regions in order to survive.

Other Reference Sources (in Japanese)

Wakui Kotaro, How Electronics Will Transform the Media. NHK Books.

Advanced Information Society Research Council (ed.), The Advanced Information Society. Japan Times.

Koyama Kenichi Team, Paradigm of the Advanced Information Society. Printing Bureau, Ministry of Finance.

Inose Hiroshi Team, Information and Man in the Context of Science and Technology. Printing Bureau, Ministry of Finance.

Asada Akira, Structure and Power. Keisoshobo.

Kumon Shumpei, The Network Society. Chuokoron.

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