Keep Your Feet on the Ground and Aim High — How to Put Amoeba Management into Practice

Keep Your Feet on the Ground and Aim High — How to Put Amoeba Management into Practice

After reading Mr. Kazuo Inamori’s Amoeba Management, I was immediately and deeply moved by the entrepreneurial spirit conveyed throughout the book: keeping one’s feet firmly on the ground while setting one’s sights high. In this book, Inamori, with the distinctive style of a Japanese entrepreneur, offers readers a complete and systematic explanation of the goals, prerequisites, and implementation steps of amoeba management. He also describes the spirit and philosophy that supported Kyocera’s rise as a great company. Although the amoeba management model in the book is described on the basis of Kyocera’s typical manufacturing business, this management philosophy can be applied to any organization that satisfies the three prerequisites of amoeba management. Today, as information technology advances rapidly and the business environment changes from moment to moment, traditional organizations that are bloated and inefficient are finding it increasingly difficult to survive in intensifying competition. At such a time, a more flexible organizational form—small combat-unit-like teams such as amoebas—is needed more than ever.

Throughout Amoeba Management, Mr. Inamori consistently emphasizes the demands placed on leaders. For every measure taken in business operations, leaders must have clear and explicit intentions and goals. Only in this way can they uphold and persist in the correct management philosophy. Whether it is organizational restructuring or the rollout and execution of new policies, there should be continuous iteration and reform. Yet in the course of reform, comments such as “changing orders from morning to night” or “a burst of effort followed by neglect” are bound to arise one after another. This makes it all the more necessary for leaders to stay clear-headed during change and remember their original purpose. Before introducing amoeba management itself, Inamori first explains the three purposes of implementing it. Only when these three purposes are clearly understood should an organization move forward with amoeba management reform.

The first purpose is to establish a departmental profit-accounting system directly linked to the market. The second is to cultivate people with an owner-manager mindset. The third is to realize management with the participation of all employees.

Once the purposes are clear, an organization that wants to reform itself through amoeba management must also meet several practical conditions. In a manufacturing company like Kyocera, these conditions are relatively easier to satisfy. For other types of organizations—for example, project-based organizations serving enterprise clients—it is first necessary to reorganize the business, clarify the connections and distinctions among different activities, and continue doing so until the prerequisites for amoeba management are met. Only then can transformation be implemented. Otherwise, there is a real risk of ending up with something that imitates the form but misses the substance.

The first condition is that each amoeba, in order to conduct independent accounting, must have clearly defined revenue and be able to calculate the costs incurred in generating that revenue. The second condition is that an amoeba, as the smallest organizational unit, must be capable of independently completing a piece of business or a specific operation. The third condition is that the division of the organization must be conducive to carrying out the company’s overall goals and policies.

These conditions are indispensable to amoeba management. If the methods of amoeba management are not conducive to implementing the company’s overall direction and policies, then no matter how attractive the potential benefits may seem, they should not be adopted. Likewise, if the organization’s accounting system and business units are not sufficiently refined, then the reform and implementation process will inevitably require a considerable price.

What is even more admirable about Mr. Inamori is that he does not shy away from the possible negative effects of amoeba management. He offers an objective and practical analysis of some of the drawbacks that emerged within Kyocera as a result of this system. These issues include disputes over pricing between amoeba units, conflicts between sales amoebas and production amoebas, and the tendency of amoeba units to focus too much on the interests of their own small groups. Some of these problems were handled relatively well within Kyocera, while others still require continued improvement. Under such circumstances, in order to reduce the negative impact of policy implementation, Inamori emphasizes several principles that must be upheld when practicing amoeba management.

1. It must align with the company’s fundamental philosophy and values.
2. It must be approached from a management perspective.
3. It must truthfully reflect the actual state of operations.
4. It must maintain consistency.
5. It must be fair to the company as a whole.

In the course of explaining amoeba management, the book also reveals, in many places, the essence of Inamori’s broader management philosophy and thinking. For managers, each of these insightful statements is truly valuable:

Even if the technology is not especially advanced, what matters most is being able to turn an ordinary business—something others can also do—into an outstanding one.

No matter the field, as long as one is willing to devote wisdom and effort to developing new products that truly touch customers’ hearts, it is possible to create limitless added value.

Study, innovate, and do everything possible to increase sales while continuously and thoroughly cutting costs—this is the principle of management.

In modern business management, speed is of the utmost importance. How to improve time efficiency has become the key to winning in competition.

Leaders must throw themselves into their work with the strong will to accomplish the plan. They must possess the determination to achieve the established plan no matter what. Leaders must carefully analyze the information collected by the sales department, accurately grasp market conditions and competitors’ movements, and determine prices on the basis of a correct understanding of their products’ value.

“To keep engaging in creative work” is the most fundamental guiding principle for the growth of amoebas and, indeed, the development of the company.

The starting point of amoeba management is to improve the management efficiency of each amoeba through diligent effort, thereby enhancing the performance of the company as a whole.

Compared with these maxims about management, Mr. Inamori repeatedly emphasizes Kyocera’s fundamental management philosophy in the book, and he stresses how such a philosophy should be put into practice: “To pursue the material and spiritual well-being of all employees, while at the same time contributing to the progress and development of human society.” There are no flowery words, nor any unrealistic exaggeration. Yet it is precisely because Inamori spared no effort in reflecting and practicing at every level of detail that this philosophy truly became embedded in Kyocera’s corporate DNA. When it comes to management, perhaps this mindset—keeping one’s feet on the ground while aspiring to lofty ideals—is what is most worthy of learning from Mr. Inamori.