Let's stop catering to customer needs. "Critical business" will change society [Shu Yamaguchi x COO of Heralbony]

"HERALBONY and the Philosophy of Words" is a series that takes a simple and thorough philosophical look at the various "words" that we use casually in our daily lives - what lies behind those words.

HERALBONY has been confronting and updating various "preconceptions" embedded in words up until now. In this series, HERALBONY members, including Representative Director Matsuda, will discuss the "philosophy of words" with opinion leaders active in various fields such as business, art, welfare, and academia in order to break free from the spell of words and expand the circle of thought in which 8 billion "unique people" can play active roles with vitality.

In the third episode, Leibniz CEO Shu Yamaguchi, author of bestsellers "Why do the world's elite hone their 'aesthetic sense'?" (Kobunsha) and "The Future of Business" (President Inc.), who is also active as an independent researcher, author and public speaker, and Heralbony COO Marie Shinobuoka will philosophize about the word "business."

"Business" and "social movements" have long been considered incompatible

Marie Shinobuoka (hereinafter Shinobuoka): I've always read Yamaguchi-san's books and I'm a big fan, so it's a great honor to be able to "philosophize" with you like this. Thank you for joining us today.

Yamaguchi Shu (hereinafter Yamaguchi): Thank you. But "HERALBONY" is a strange company name.

Shinobuoka: Actually, the company name comes from the fact that Shota, the older brother of both CEOs Matsuda, has severe autism, and the mysterious word he always wrote in his notebook was "HERALBONY." For some reason, Shota loved company names, and he would spell out "HERALBONY" over and over again along with names like "Toyota," "Sony," and "Panasonic."

When I asked Shota, "What is this?", he didn't know. So when he started his business, he decided to add value to this seemingly meaningless word, and adopted it as the company name.

Yamaguchi: So that's how it happened. That's interesting.

Yamaguchi: I feel that it is a wonderful coincidence to have been invited to take part in the "HERALBONY and the Philosophy of Words" project and to have had the opportunity to think about the word "business."

Actually, I recently wrote a new book. It's called " Critical Business Paradigm " (President Publishing), and in a word, the theme of the book is "the intersection of business and social movements." Until now, "business" and "social movements" have been considered incompatible, but from now on, I think we will be in an era where movements to change society will move forward with the power of business. This is the story of the future.

So, what Heralbony is working on is exactly "the intersection of business and social movements." It is advancing a kind of social movement that enables people with disabilities to play an active role in society through art business. So you are trying to bring about social change by making good use of the power of business and capitalism, right?

Shinobuoka: That's exactly right. We at HERALBONY define ourselves as a "movement." My first career was as a bureaucrat at the Ministry of Economy, Trade and Industry, but I wanted to change society more quickly, so I jumped into the business world. In that sense, as Mr. Yamaguchi said, I want to make society better by making good use of the "power of business."

A critical business approach that does not cater to "customer needs"

Yamaguchi: I've always thought it's important to "hack capitalism." There are three main ways to return wealth to everyone in society. One is to hand over the wealth of society to the government in the form of a basic income and then distribute it from there.

The second method is to provide an opportunity for everyone to become economically independent by using business mechanisms, and the third method is to abolish the current system altogether and create a new system from scratch.

The first method can only return 10,000 to 20,000 yen per person per month, and there is not enough wealth to spread. The third method corresponds to the communist movement that has been attempted around the world in the past, but as history teaches us, all of these movements ended in disastrous results.

So I think the only way forward is the second one, which is to make good use of existing business mechanisms. This is what I mean by "hacking capitalism." And HERALBONY is putting this into practice.

Shinobuoka: Yes. By establishing it as an art business, we hope to enable artists with disabilities to become financially independent. That is the world we are aiming for.

Yamaguchi: At that time, the important thing is the "power of empathy" on the market side. It's fine if it's simply profitable for oneself, simply cheap, simply convenient. Instead of the traditional approach, if more and more consumers in society choose products that are a little more expensive but have taken into consideration the environment, human rights, and other aspects of the production process, then social movements and business will become closer.

I call businesses like Heralbony, which have a strong character as a social movement or social criticism, "critical businesses," and businesses that are the opposite of these, "affirmative businesses."

An "affirmative business" is a business that fully affirms the desires of consumers that currently exist in the world. If the market says "cheap is better," then provide cheap products. If the market says "convenient is better," then provide convenient products. An "affirmative business" is one that tries to meet all of the consumer's desires in this way, and traditional businesses have almost always been run within this category.

Can't we use the "7 trillion yen annual advertising budget" to make society better?

Yamaguchi: The so-called legacy business model was to fully accept the desires of consumers, but what happened as a result? It created various problems, including environmental issues and human rights issues. However, it is not true that business and capitalism themselves created these problems.

The problem lies in the system that is constantly competing to satisfy the desires of people who have unreasonable or irrelevant desires as quickly and cheaply as possible. Unless we change that, I don't think the situation will improve.

Shinobuoka: I myself believed in the "power of business" and jumped from the government to the private sector, but I didn't want to be a part of that kind of competition. I want to use the "power of business" to change society for the better.

Yamaguchi: Right. So who can change that?

For example, it is of course important to educate children at school and for parents to teach them how to be a good consumer. But I think the most effective way is to borrow the power of business. The Japanese government's PR budget is about 10 to 20 billion yen a year. In comparison, the total budget that Japanese companies spend on advertising and marketing communications is about 7 trillion yen.

However, as you see every day, the advertisements around us are full of messages like "Great deals now" and "Double points." Such advertisements create the perception that "business is simply something that satisfies our desires cheaply and quickly," and continue to educate consumers in the wrong direction.

On the other hand, how many consumers in society are willing to buy products from companies that actively employ minorities or that are environmentally conscious or engage in fair trade initiatives? There is a report that investigated this question, and it found that in European countries, the figure is roughly 60-70%, in India and China, 70-80%, while in Japan it is only around 30%.

When I talk to people from Japanese companies, they often say, "If we emphasize eco-friendliness and sustainability, we won't be able to win in the market." But I want to say to them, it's you who have created this kind of society.

Why HERALBONY is a corporation and not an NPO

Yamaguchi: So how have countries like Europe created conscious consumers? It's through the effective use of the power of business.

Specifically, when issuing coupons, they may offer different coupons to those who come by car and those who come by bicycle, or they may design parking lots so that electric vehicles can be parked in more convenient locations than gasoline vehicles.Companies use a variety of methods to appeal to consumers with their attitude.

In this way, as a company, there should be plenty of room for companies to communicate the values ​​they hold dear to society, but even today, most Japanese companies do not do so very often. This is probably reflected in the "30%" figure.

The way business is conducted is about to undergo major change. When I was feeling this trend firsthand, I heard about HERALBONY and was happy to see that companies in Japan were also trying to get involved.

Shinobuoka: Thank you. In fact, even before HERALBONY was founded, there were many NPOs and other organizations that were working to bring art created by people with disabilities to the world. Among them, HERALBONY made the bold choice to "run as a corporation." Moreover, we are aiming for fairly rapid growth within the rules of capitalism.

Just as Mr. Yamaguchi said, we are attempting to bring new values ​​to the world while using the platform of capitalism.

In the second part, we will continue to philosophize about the word "business," including past examples that have taken place at the intersection of social movements and business.

>>Click here for the second part: Declare "Who is the enemy and who is the ally?" Learning from Shu Yamaguchi about marketing strategies for the new era

Items worn by Shu Yamaguchi