【Report】 “From Kyoto to the World: JOHNAN Corporation’s Innovation in Heartbeat Devices” was held.

On June 26, a case discussion on JOHNAN Co., Ltd. was held during a lecture on business strategy by Professor Shigefumi Makino of the Graduate School of Business Administration. President Mitsuyo Yamamoto also participated in the lecture and engaged in a lively Q&A session with the participating students.

The case of JOHNAN, the course material for this year’s seminar, was based on interviews conducted by students in the Shigefumi Makino and Jinichiro Yamada seminars with JOHNAN President Yamamoto, company executives, and other related persons.

Case Overview JOHNAN Corporation is a one-stop contractor for the development and manufacturing of electronic components. 4th generation president Mitsuyo Yamamoto, after studying abroad in the U.S. and working for a consulting firm, became the company’s president and expressed the company’s values and philosophy in the words “KAKUMI, MIRU, MAKUCHU”. He also decided to enter the medical device field as a new business area and took on the challenge of developing a heartbeat device. Origin of JOHNAN JOHNAN began as a cottage industry founded in Kyoto in 1949 by Matsuo Yamamoto, who owned a high-end clothing store. The transistor processing and production business was founded when he was consulted by Matsushita Electronic Industrial Co., Ltd. to solve a defective vacuum tube and succeeded in doing so. Thereafter, the company expanded its business volume and business domain with Matsushita Electronics, focusing on the processing and assembly business for home appliances. JOHNAN’s high quality and safety technology was highly evaluated by Matsushita Electronics, and the company became a trusted subcontractor. President Yamamoto’s Background Mitsuyo Yamamoto, the current fourth president, grew up in a Christian family. He was told about corporate management from an early age, and while a student at Doshisha University’s Faculty of Theology, he came across Max Weber’s “The Ethics of Protestantism and the Spirit of Capitalism” and was so impressed that he decided to study in the United States. Upon returning to Japan, Mr. Mitsuyo worked for a consulting firm, where he acquired management and executive skills while working himself to death. Later, when he joined JOHNAN, he found that the company had no human resource development or strategic policies, and he thought, “This company will definitely collapse in the not-too-distant future.” After obtaining an MBA in the United States, Mr. Mitsuyo returned to JOHNAN and became its fourth-generation representative. Mr. Yamamoto has weathered the Lehman Shock, the Corona disaster, and other difficult times with his bold management decisions based on his unique view of life and death that “this world is the preparation stage and the other world is the real work. Later, he verbalized the company’s values and philosophy and compiled them into a picture book, “Kakomu, Miru, Tsukuru. JOHNAN’s Business JOHNAN provides platform services, engineering services, manufacturing services, and repair and maintenance services, focusing on the field of mechatronics. Our target industries include semiconductors, telecommunications equipment, automobiles, industrial equipment, ships, medical equipment, and many others. In the semiconductor field, in particular, we deal with major domestic and overseas manufacturers and boast a high market share. In engineering services, we provide tailor-made development to meet the needs of our customers. In manufacturing services, we have factories in Japan and overseas to provide high-quality, low-cost products. Development of cardiac sound devices in the medical device field JOHNAN entered the medical device field in 2018. This was initiated by President Mitsuyo Yamamoto’s desire to “contribute to people’s health and happiness” after her grandfather’s illness and her own health concerns. In the medical equipment field, the company’s products range from general products such as blood pressure monitors and thermometers to advanced products such as ventilators and cardiopulmonary ventilators. The medical equipment field has grown to account for 5-6% of total sales and is expected to become JOHNAN’s core business in the future. In the midst of all this, the Osaka University School of Medicine approached us with a request to develop a heart sound device. A heart sound device is a device for diagnosis by listening to the sound of the heart and blood vessels. Currently available devices have a problem that the sound quality is poor and difficult to hear. Osaka University School of Medicine hopes to develop a heart sound device that has high sound quality and is easy to hear. However, we decided that this would require advanced electronic technology, which would be difficult to achieve on our own. Should JOHNAN accept this request? Should JOHNAN accept or decline?

On the day of the seminar, Professor Makino asked the following questions to the students who had read the case in advance.

(1) What kind of company is JOHNAN: What does the company do, how has it expanded its business, what is the company’s corporate philosophy, and what strengths does the company have over its competitors?
(2) Explain President Yamamoto’s view of life and death. How do you think this view of life and death influences the management of the company?
(3) What type of product is a heartbeat device? Describe the market environment and competition for heart sound devices.
(4) Describe the opportunities and risks to JOHNAN in developing a heart sound device.
(5) Should President Yamamoto proceed with the development of a heartbeat device? Why is that?

Among them, especially questions (4) and (5), the students were divided in their opinions and offered diverse perspectives on competitive analysis, business risks, and the difficulties in the medical field. The question, “Why is JOHNAN trying to develop a cardiac device with so much uncertainty?” was directed directly to President Yamamoto.

President Yamamoto spoke about how the development of the heartbeat device was in line with the vision of “implementing each person’s hopes and wishes,” as stated in the JOHNAN VISION 2050, and how open innovation could reduce development and business risks, and how these factors were taken into consideration when starting development of the heartbeat device. He also mentioned that he started the development of the heart sound device in consideration of these factors. President Yamamoto’s bold decision to overcome various risks was met with admiration and praise from the participants, and the discussion between the students and Mr. Yamamoto continued after the lecture.