Komatsu Lid. and Project (A) 995-001 company’s new strategic thrusts: “Growth, Global, Groupwide,” or the “Three G's.” Katada explained: Top-down management by policy is becoming obsolete. Although itis stil! useful, we can no longer have TOC at the center of the management process. The future outlook for the industry is not bright. Managers can no longer operate within the confines of a defined objective. They need to go out and see the needs and, opportunities, and operate in a creative and innovative way, always encouraging initiative from below... Although the “three G” slogan is something I came up with when I became president, there's nothing new or unusual about it given the economic conditions we ‘were in~stagnant sales and a bureaucratic and rigidly structured company. ‘These three simple words were intended to promote discussions, directions and policies at ‘the board level and throughout the organization, The slogan may seem abstract, but it was this abstract nature that stimulated people to ask what they could do, and respond creatively. ‘Stimulating New Initiatives Stimulated by the new open organizational forums participative and challenging management style, Komatsu executi definition to the “Three Gs" slogan in a series of meetings that ‘September 1989 to March 1990. By this time, Katada and his top ‘the new slogan and operationalize it ina long-term strategic plan, ‘The most basic element of Project G was that the growth. Following the months of intensive negotiation and announced that the company would aim at achieving a sales level level almost double its 1969 revenue level. ‘The first task in achieving this objective was to begin to that had beon stagnating (as reported in yen) since the early 19% ‘major globalization task, and Katada predicted that by the year 2 business would manufacture over half of Komatsu’s total comuitment to this core business, Katada announced plans to triple the company’s capital investment in construction equipment to ¥50 billion per annum, and challenged his managers to develop the proposals to justify that commitment. Beyond revitalizing construction equipment, the other major element in Project G was a belief ‘that Komatsu had to become less dependent on its traditional business, The management team’s ambitious growth targets depended on its ability to leverage the portfolio of assets and resources that alzeady existed within its companies and affiliates and apply them to new product and business opportunities. A preliminary inventory revealed that the group had particularly strong capabilities and expertise that would position it well in three growth segments—electronics, robotics and plastics. Katada planned to encourage his organization to grow such business aggressively so that by the mid- 1990s the nonconstruction part of Komatsu would account for 50% of its sales. Implementing the Change To communicate the new vision, Katada began referring to the company not as a construction equipment manufacturer (and certainly not as one that defined itself in terms of its old rival Caterpillar), but rather as “a total technology enterprise.” And the old Japan-centered, engineering 7 ‘This document is for use only with the Harvard Business Publishing ‘Case Analysis Coach’