1. The Second Founding
2017-2024
(1) A Once-in-a-Century Major Transformation
- 2017
- DENSO announced a new tagline, “Crafting the Core,” to communicate its values both internally and externally, aiming to build a community that can keep up with and surpass the speed of environmental changes necessary for survival in this transformative period.
By the mid-2010s, preventing global warming and reducing traffic accidents had become urgent issues. Additionally, due to the rapid advancement of information technology, people's values and consumption behaviors became increasingly diverse.
In the automotive industry, the evolution of IoT (Internet of Things) and AI (Artificial Intelligence), along with new entrants from different industries, led to a paradigm shift described as a “once-in-a-century transformation.” This shift was prominently characterized by the acceleration of “Connected, Autonomous, Shared, and Electric” vehicles, collectively referred to as “CASE.”
It was anticipated that these trends would continue to progress into the future. In the automotive sector, the core challenge became how to generate new added value in the domains of software and the integration of hardware and software through IT (information technology).
In 2015, Koji Arima became the president of DENSO. President Arima perceived the changes in the business environment as having an impact comparable to the founding period of the company, marking what he termed the “Period of our Second Founding.” It was not just a matter of winning or losing; adhering to traditional methods would not suffice for survival. President Arima was particularly concerned that this crisis was not as immediately palpable as the job reductions experienced during the Lehman Shock, making it a more insidious threat.
President Arima emphasized the necessity of initiating “Transformation” immediately. The required Transformation was not just incremental improvement but a reinvention so profound it would be akin to birthing a new company. This meant innovative thinking and methods that went beyond cumulative improvements. In various settings, President Arima consistently urged employees to act promptly towards this transformation.
- Deep DiveDifferentiation from Previous Transformations
- In the past, DENSO has also called for and driven Transformation in response to events such as the bursting of the economic bubble and the Lehman Shock.
However, this time the challenge was not a “downturn in the economy,” but rather a response to a “fundamental change in the business environment.” The issue was not merely a fluctuation in volume but a qualitative transformation. This was not about restoring the business but about creating something so new that it would be akin to the company being reborn. This required a much larger amount of energy and effort compared to previous transformations.
The critical issue was the “speed” of this transformation. In an ever-changing business environment, only a transformation faster than the rate of change would be meaningful. President Arima believed that “companions” who would undertake this Transformation together were essential. However, DENSO was not traditionally adept at building such alliances. A new approach was necessary.
To break free from its inward-looking, self-reliant culture and to build a more open-minded community, DENSO needed to communicate its values first, encouraging empathy and expanding this shared understanding. In January 2017, DENSO introduced a new tagline, “Crafting the Core,” and announced it both internally and externally. This tagline encapsulated the idea of meticulously crafting and continuously refining what is important to people.
By sharing this value, DENSO aimed to let people understand what the company cherishes and how it intends to contribute to human happiness. Through this shared value, DENSO sought to find companions who would cooperate swiftly drive the necessary transformations. This was the vision behind the new tagline.