Canycom: Secrets to finding new value

While the world has fallen in love with the idea of growing big and getting rich for the benefit of the company and its shareholders (at the expense of all other stakeholders), we’ve lost sight of the fact that there are many other companies out there that do not take this approach. Instead, they approach everything that they do with the purpose of creating positive value for as many individuals and organizations that they work with.

Along these lines, when it comes to agricultural equipment manufacturers, what is the first company that comes to mind? Maybe Caterpillar? Or Kubota? Or maybe John Deere?

While each of these companies have powerful brands, global footprints, and are incredibly large, one company in the same category that you most likely haven’t heard of (unless this is your industry) is Canycom. To be honest, until I watched NHK World on October 27th, where I saw Canycom’s President, Hitoshi Kaneyuki interviewed on NHK World I had never heard of Canycom either. But after watching his interview, I knew that this would be a perfect company to highlight here, as it is taking exactly the approach that I advocate throughout The Value Plan.

Canycom was founded in 1948 by Kaneyuki’s grandfather, making non-motorized transport wagons to be pulled behind other vehicles. With very few competitive advantages, it wasn’t long until orders stopped coming in and the company was faced with a major challenge. Kaneyuki joined his grandfather’s company in 1973 and two or three years later, he came face to face with the depth of this challenge. As he explained in this NHK interview:

“In my second or third year, I was going around and doing deals, and the dealer said “what is this?” The product that your company makes is weak, and people can’t use this. Come back when you have a real product.” I realized that my job was to get us out of the position that we were receiving complaints like that.” (5:02 – 5:16)

So when faced with strong customer pushback, with your products or services faltering in the market, where do you look for success?

Point 1 – It all begins with a Value Mindset
A value mindset is based on the concept of service, that Steve Vargo and Bob Lusch so eloquently have outlined in their papers (like their seminal work Evolving a New Dominant Logic for Marketing) and books (like this outstanding overview of Service Dominant Logic). Basically, as they say, the purpose of any business is to “serve itself by serving others” , and here, Canycom’s Kaneyuki couldn’t have been any clearer in his explanation of how this philosophy works in practice for his company:

“We think of ourselves as a company of duty and kindness and we want to be that way on a global scale…I think the ideas of duty and kindness resonate everywhere.” (13:42 – 14:01)

And a critical element of putting this mindset into action is a commitment to creating high quality solutions. Not by gimmicks, or new tactics to position your brand in a new or different way. But instead a pure, honest commitment to making something at the highest possible level of your skills for the ultimate benefit of your customers. Or as Kaneyuki explained, “We integrated that spirit of craftsmanship into everything that we did.”

Point 2 – Success Hinges on Finding your Best Customers and….
But obviously, just this spirit or belief clearly isn’t enough, and Kaneyuki and Canycom knew this as well. The next step is clearly to take action on this mindset. And rather than jumping in to creating new products or services that you think your market needs, the next step is to focus completely on your customers.

And that’s exactly what Canycom did with one simple piece of technology. A video camera.

As Kaneyuki explains it, his customers are the source of all new innovations that his company creates. That may sound like Canycom simply doesn’t hire anyone innovative, but that’s anything but the truth.

Point 3 – …Finding Problems Worth Solving (The PWS)
Rather than sending his customers surveys, or doing any traditional market research, Kaneyuki gives all of its sales people video cameras and asks them to interview their customers in the fields that they work with the Canycom equipment. Why is this so important? Because if you call a farmer to your offices to get their advice on your products or services, they can’t SHOW you the exact problems that they are facing with your equipment. But with a salesperson with them in the fields, they can walk them to the sharp curves that the Canycom machines haven’t been able to navigate, or bend down through under the low-hanging fruits that the Canycom equipment can’t navigate beneath.

And it’s there, in these uniquely troubling places that Canycom finds its next innovations. This is exactly what I mean by “breaking the 4th wall” (pg 83) in Building Block #5: Story (pg 79) of The Value Plan, and I can’t think of a better example of this than Kaneyuki’s explanation of what and why they do this:

“Before we started doing this, we weren’t truly meeting our customer’s needs. We weren’t getting useful information. We wanted their unfiltered opinions. So we sent our employees out and had them film our customers. Just had our customers talk to us on camera. But there was a trick to it. We had to go to where the farmers actually worked. The mountains. The fields. If we didn’t do that, it wasn’t going to work. That’s where we needed to do our interviews. We needed to see what it was like in the field….We don’t actually work alongside of our customers. So there are a lot of things we don’t know. By visiting them, we realized a lot of things for the first time.” (7:22 – 8:14)

Point 4 – Solution Products solve real customer problems with a combination of “Cheng & Chi”
And then the magic comes when the management team, after reviewing all of the different ideas that these videos bring them, decide upon a problem worth solving (PWS), which the company then commits to making and selling.

“We talk about the complaints within our company. Get all of the developers, planners, engineers together and use the complaints to craft new products.” (8:30 – 8:38).

As Kaneyuki explained, “I think if we simply develop more and more products that respond to customer needs, we’re going to keep winning more and more customers. This path can still take us a lot further.” (9:47 – 9:52)

But that’s not where it ends, and it’s something that John Boyd and Chet Richards clearly understood in their discussions about OODA Loops and how to apply these effectively in business. As I explain in Section 1, Chapter 4 of The Value Plan, value emerges from the interplay of what Boyd and Richards called “Cheng” and “Chi” or the expected AND the unexpected, packaged together to create something that makes your customers say “wow!” rather than “hey, that’s what I was expecting you’d make. It’s not just collecting what customers say they want and providing it to them, and it’s also not coming up with things that they will find surprising or innovative. But it’s the combination of these two that leads to new value, and unsurprisingly, it is a practice that Canycom has chosen to sit at the heart of its marketing strategy.

When Kaneyuki’s sales people found that mowing was a big time-killer for many of their customers, but also that it was an unavoidable one at that, they probed a little further for insights as to why it was such a drudge. And the answer that they heard was that mowing simply wasn’t any fun and was “uncool”. They questioned themselves as to how they could make mowing “fun and easy”.

“What if,” Kaneyuki asked his team, “we could make a mower that you could just cruise on?” (10:42 – 10:52) And the outcome of this question was a hit product, go-cart mower that first and foremost cuts various types of lawns, is “cool” to ride on, and the secret “Cheng” that Canycom added was the concept of “fun”. Enter the Go-Kart Mower:

The Canycom GoCart Mower

The Canycom GoCart Mower

“If you just address the customer’s complaint, they are not going to be wowed. If you just make them what they want they’ll just say “yup, that’s what I wanted all right.” So it’s important to add a little something extra. Add a sense of playfulness in various ways. You have to think of creative ways to apply ideas. See how something can be used in a fresh way.” (12:00 – 12:24)

Point 5: Don’t Forget to have Fun!
The Japanese word for play is “ASOBI” and Kaneyuki and Canycom also work to increase employee value by making an environment conducive to play, which is also part of Rule #9 of The Value Plan, “Relax, Enjoy and Have Fun”.

As Kaneyuki explained at the end of this short documentary,

“I believe that work is play. It’s best to treat work like going to someplace fun. Don’t take yourself too seriously. Feel a sense of freedom and in the end I think you’re going to get great results. Put FUN at the center with work as one small part of it.” (14:10 – 14:45).

Although I walk through a complete process for creating breakthrough products and services in The Value Plan book, you definitely won’t go wrong by following this simplified approach Kaneyuki and Canycom have shown us.

To apply a value-focused approach to any product or service you’re working on, first try this basic 5-stage process:

  • First, start with a Value Mindset grounded in the concept of service. Ask yourself what your duty truly is in terms of serving your customers, and how you can help them to live better lives through empathizing with this difficulty and providing a truly great solution for it.
  • Then, more clearly identify this customer “segment” to work with. I call this the Lightning Rod Target Customer, or LRTC, but feel free to call them anything that you’d like. Can you truly “go out into the fields” and talk to these people? Or are they just phantoms of your imagination that you think exist, but you can never interview on video? Take time to identify this customer group and then (and this is the hard part), truly get up and out of your office, and go find them.
  • The next step is to employ that spirit of service or kindness that we discussed above and listen to these customers as they explain the problems or challenges they are facing even with your current (or a competing) product or service. This definitely takes patience and an open mind, as it’s easy to start getting defensive rather than listening with empathy. But if you can do this right, like Canycom continues to do, you’ll work with these customers and explore the problems that they are facing in detail and identify which of these complaints is truly the problem that you and your company will aim at solving. I call this a PWS, or Problem Worth Solving.
  • From here, embellish upon these ideas to weave together a solution that integrates both Chi (or what your customers expect from a solution to this PWS) with Cheng (or something creative or unexpected).
  • Finally, if you can also do all of this within an environment of play or fun, where you aren’t forcing your employees to work hard and create new products to hit your numbers, but instead, challenging each other to explore, experiment and enjoy the process, then you have all the right ingredients to create customer value.

That wraps up this short case study, which I hope could help you find new insights or ideas for how to unleash value in the products and services that you and your company make.

As always, I look forward to your feedback!

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References:

[1] The Unique Business of Transport Vehicles, Hitoshi Kaneyuki, Chairman, Canycom, NHK World, Direct Talk, Oct. 22, 2018, Accessed from https://www3.nhk.or.jp/nhkworld/en/tv/directtalk/articles/20181022/index.html on December 12, 2018.

[2] Sugai, P., 2016, The Value Plan, Leanpub, https://leanpub.com/thevalueplan

[3] Lusch R.F. & Vargo S.L., 2014, Service-Dominant Logic, Cambridge University Press, pg 17

[4] Boyd, J., 2017. A discourse on winning and losing. Air University Press.

[5] Richards, C., 2004. Certain to win: the strategy of John Boyd, applied to business. Xlibris Corporation.

About The Author

Philip Sugai

Dr. Sugai joined Doshisha Graduate School of Business in 2013 where he teaches Marketing, eMarketing, Marketing Research, and Sustainable and Responsible Marketing to Global MBA program students. Prior to joining the Doshisha University faculty, Dr. Sugai taught at the International University of Japan in Niigata since 2002, where he taught similar courses and served both as Dean and Associate Dean for more than 6 years. He received his Doctoral degree from Waseda University’s Graduate School of Global Information and Telecommunications Studies and his M.B.A. in Marketing and Operations Management from New York University’s Stern School of Business. He has worked as a marketing executive at American Express, Muze, Inc., and Lightningcast, Inc., and as a marketing consultant for Advantage Marketing Information.