Former Intel VP: Grow These Leadership Skills to Turn Your Business Into World’s Next Disruptor
Go ‘Circular’ to Win in the Global Economy
Ask Yoshie Munakata, the former vice president of Intel Corporation in Japan, to define capitalism, and he’ll tell you that what the creed has long stood for will soon change.
With half the world population now considered to be middle class, global consumption is destined to grow. That means one can no longer expect to afford virgin raw materials with which to make goods, warned Munakata, former vice president of Intel Corporation in Japan.
In Munakata’s view, there’s just one path left for the world’s capitalists to take: Kissing goodbye to the cradle-to-the-grave economy, and embracing the circular economy instead.
In a circular economy, anything from clothing to plastic that used to wind up in landfills will need to reenter the manufacturing cycle in the form of raw material. The key to accomplishing this is algorithm, Munakata said.
“The circular economy will require data infrastructures that enable manufacturers to keep track of every single material they use, all the way from its entry point to disposal. IoT, big data and AI are the critical components of such infrastructures,” said Munakata, who now serves as an advisor for ABEJA, a Tokyo-based startup that provides AI-based solutions for commercial and industrial operations.
In other words, Munakata said, algorithm is what makes it possible for the world to transition to a circular economy — a shift he describes as, “the most significant one that capitalism has seen since the first wave of the industrial revolution.”
This is the very reason Munakata decided to join ABEJA, he said.
“Data will be the key in accessing resources in coming decades, especially in Asia. ABEJA has expertise in figuring out the best way to use resources by having AI track and analyze data in a way humans otherwise could not. That know-how is extremely valuable,” Munakata said.
Munakata is one of the most recognizable names in Japan’s techno-entrepreneur community. With his 33-year career at Intel under his belt, Munakata established B. Grove, Inc., a business consulting company, in 2016 to support startups that are focused on creating new value. A staunch advocate of the circular economy, Munakata is particularly focused on innovations in waste management. He is also a leadership guru who has taught for 15 years at Intel’s internal leadership program, “Intel University.”
ABEJA, a global leader in business applications of AI, has recently opened its Southeast Asia headquarters in Singapore. To commemorate the occasion as well as ABEJA MAGAZINE’s inauguration, we sat down with Yoshie Munakata, former Vice President of Intel Corporation in Japan and currently an advisor to ABEJA, to seek his insights into the leadership skills necessary to succeed in this fast-evolving innovation economy. During the interview, Munakata also discussed his effort at ABEJA to instill a management practice for fostering such successful leaders.
This is the first installment in a three-part series, which is based on Munakata’s comments and his conversation with ABEJA COO Naoki Tonogi during the interview.
Revolutionary Products for Revolutionizing Consumers’ Mindsets
Creating great products is important, but that alone won’t make your business a global brand.
Just think about how Intel came to rule the microprocessor industry, Munakata said. In its early years, Intel mostly sold memory chips. Just like the majority of Japanese semiconductor companies, Intel, back in the day, worked on contract-based projects, catering to individual clients’ needs through customization.
Fulfilling clients’ needs is the bread and butter of any business. It helps companies generate a constant flow of revenue while attaining a sense of reward for solving people’s problems. This business model won’t help, however, if your goal is to lead the world with your innovation, Munakata said.
Intel switched gears into a completely different business model when they decided to create microprocessors to their own specifications and release them to the general market.
“They created microprocessors as a generic product. They designed and manufactured the product on their own and created a market for it,” Munakata said of Intel. “The company got a half-step ahead of its customers by predicting their needs. They presented the product to the consumers, who weren’t exactly ready for it. And Intel quickly made them realize it was what they needed.”
According to Munakata, this business approach of creating consumers’ wants has worked well for technology companies for decades. In recent years, though, some companies have reverted back to the older business model, including Intel, which now tailor-makes its server chips for such individual clients as Google and Amazon, Munakata said.
Through customization, companies adjust to the market’s needs. That has its benefits, he said.
“But, if you only keep doing that, your business will never grow beyond the limits of your clients’ imaginations,” Munakata said.
In fact, Munakata believes Apple’s innovation doldrums stem from its falling into the trap of the customization business model. He pointed out while iPhone has added a number of new features since its unveiling 10 years ago, the device has essentially remained the same; it’s still a phone with a touch screen that connects to the internet.
Amid the flood of smart gadgets, technology companies struggle to come up with products that impress consumers. Feeling an urgent need to innovate, many industry leaders are calling companies to consider adopting speculative design and various other methods that can get them out in front of consumers, Munakata said. After using those methods to innovate, companies could gradually adapt to the market through releasing newer generation versions of the product. More companies are now adopting this new business model, which combines the best of the two aforementioned business models, including ABEJA that has developed its own platform, according to Munakata.
Although AI is a “buzzword” that people are used to hearing in everyday news stories, they may not necessarily understand how it can be relevant to their own businesses, ABEJA COO Naoki Tonogi said. So, ABEJA developed the ABEJA Platform as a blueprint that developers could easily use to custom-build an AI system. From algorithm modeling to designing of data infrastructure, it enables developers to do all their work on the platform.
“This way, corporate leaders could easily see what’s possible with the use of AI. The platform gives them a new vision of the future and helps them take advantage of AI without the vague fear about its effectiveness and cost,” Tonogi said. “We studied more than 100 cases of corporate AI implementations and used the insight in creating the platform. It’s designed to help identify ways to increase efficiency but also opportunities to generate new business.”
“I am hopeful that ABEJA’s platform will become a standard for business use of AI, just as Intel’s microprocessors served the purpose for the computer industry. I think ABEJA can listen to the users’ needs and continuously adjust the platform to adapt to the market,” Munakata said.
“In designing a new product, you want to try to be a half-step ahead of your customers. Just a half step, because a full step ahead would be too far for your customers to reach. Then, your customers would say, ‘I didn’t even know I wanted this. I certainly see myself using it,” Munakata said. “In that moment, an innovation would have occurred within the customer.”
Driving the needs of customers is “what we all should be aiming for,” he said.
Look for the second installment for Munakata’s insights on how to grow innovative minds.
Story by Hiroko Sato. Assignment Editor/Content Producer, Noriyuki Oka
Photos by Kaori Kohyama.