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A study takes as its background a business environment in which various cyber businesses based on the Internet, multimedia, and other new electronic fields are being born. It will propose the important elements of organizational management in creating yield-growth multimedia businesses, for today and into the future. For the yield-growth business case in Japan, against a backdrop of the aging society and a diminishing number of children, this article will take up the example of new virtual education businesses that are expected as a knowledge-based business (Davis and Botkin, 1994; 1995) to create a large market in the form of cyber businesses that make active use of multimedia, information communications networks, etc. For the yield-growth business case in Japan, against a backdrop of the aging society and a diminishing number of children, the study will take up the example of new virtual education businesses that are expected as a knowledge-based business to create a large market in the form of cyber businesses that make active use of multimedia, information communications networks, etc. Overall, the key to the future of yield-growth multimedia business is the ability to actively incorporate into corporate management, new business styles such as strategic partnerships, mergers and acquisitions, outsourcing and virtual corporations, and to popularize and expand the various platforms that will comprise the core of multimedia business. As such, it is critical that superior and innovative leadership wielded by the community leaders of the corporate organizations foster a variety of spiral-shaped chains of strategic community arrangements based on strategic partnerships.
Mitsuru Kodama: Community Laboratory, Tokyo, Japan
This article takes as its background a business environment in which various cyber businesses based on the Internet, multimedia, and other new electronic fields are being born. It will propose the important elements of organizational management in creating yield-growth multimedia businesses, for today and into the future.
For the yield-growth business case in Japan, against a backdrop of the aging society and a diminishing number of children, this article will take up the example of new virtual education businesses that are expected as a knowledge-based business (Davis and Botkin, 1994; 1995) to create a large market in the form of cyber businesses that make active use of multimedia, information communications networks, etc. It will also point out that among differing business organizations, chains of spiral-shaped, strategic community arrangements (community management) point to the possibility of new yield-growth businesses being created.
The progression of multimedia businesses
Against a backdrop of recent Internet-based cyber businesses, the world multimedia industry continues a large-scale shift from an object-centered hardware business to a new business structure that coincides with the complex inter-linking of software, info-com networks (or, simply, networks), content, and so on.
Stated another way, it can be said that a revolution in the structure of business is underway: from the atomic, the units of which are the hardware comprising the standardized, large-scale production-type product, at which the manufacturing world of the past excelled; to the bit, which comprises the units of multimedia and network software. The yield-growth model based on this bit-based business structure is thought to be the core of the future multimedia business.
In the field of info-com, as well, telecommunications carriers in various countries are faced with, as their prime task, the migration from a voice-centered yield-diminishing business model dependent on analog systems, to a non-voice, yield-growth business model centered on video, images and data communications via the Internet, digital systems, and other value-added media.
Also, in the area of cyber businesses that use multimedia to fuse networks, contents, and various applications, there is a high probability of being able to create new businesses through various partnerships among business and organizations in different fields and subject to different business conditions.
However, the management business model to unify the strategies, organizations and talent needed to create the yield-growth businesses model and promote new businesses is still an undeveloped field; the subject, no doubt, of much future research.
Formation of strategic communities
For the various cyber businesses of the future, business organization styles, management methods and the distribution of management resources must be re-formed to accommodate the transformation of the business environment. In other words, there will be an abandonment of the pyramid-type line-centered management style and manual-type, mechanical operations that were characteristic of the era of large-scale production.
With the increasing importance of small-lot diversified production, large-scale self-originated reform will be critical in enhancing the creativity of individuals and groups that make up organizations.
In the field of multimedia businesses, companies will develop by putting into play their core competencies, in areas ranging from the wide variety of consumer-use terminals to networks and content. They will develop a plethora of major and minor business styles, including strategic partnerships, mergers & acquisitions, outsourcing, and even virtual corporations. With business styles such as these, the important issue will be how well strategic communities are formed and how well they continue to create business and innovation. An actual, recent, large-scale example is the partnership between Sony and Microsoft.
This article will refer to these "chains of spiral-shaped, strategic community arrangements," in which individuals, groups and organizations increase their capacity for strategic cooperation, successively create various business organizations and new communities, and continuously create, have success in and expand new businesses, as "community management." As an example of how community management has actually been put in place, I would like to examine a specific case of virtual education businesses.
Virtual adult education
A closer look at the situation surrounding adult education in Japan reveals that popularization of higher education is advancing in step with the internationalization of society and of the economy, and the transformation to an information society. It is believed that the realization of adults' objectives of acquiring new and advanced knowledge and skills throughout their lives, even while working, will depend on an increase in the number of opportunities to learn at universities and graduate schools.
However, due to time and geographical constraints, studying full time at a university is difficult to do for adults attempting to learn while working at a company. Universities have responded to these constraints through such measures as special selection entrance examinations for adults, day and night class systems, and holding of public courses on regional and suburban campuses.
Rather than being one-sided "lectures" from the instructor, most graduate school courses are of a seminar form centered around active discussions among trainees, including question and answer exchanges. As such, these courses do not lack in face-to-face and bi-directional exchange. Adults who desire this kind of advanced business education are not only found in metropolitan areas; a high level of need is present throughout the country. In the future, to support the enhancement of education in universities, where the materials of knowledge are amassed, and the establishment of correspondence course system, an "educational big bang" ("open graduate school education for the entire nation") will become important in educating the leaders who will sustain Japan's future economic and industrial communities.
As such, much is now expected of virtual education businesses that target adults and make maximum use of multimedia and networks.
Lifelong learning
Further to this point, with regard to lifelong learning it is thought that, in anticipation of the emerging aging society, the need for lifelong learning will increase more and more as people seek it to find value in life and acquire a sense of fulfillment. In fact, there is an increasing tendency for municipalities to administer lifelong learning programs by means of multimedia- and network-based distance learning methods.
Because virtual distance learning overcomes the constraints of time and place, thus increasing the opportunities for study, the need for both diversification and individualization of the study program can be responded to unerringly. Moreover, distance learning is expected to be able to help improve educational effectiveness by curbing the education population drain, among other things.
Language education
In the future, as we are faced with outright globalization, and for purposes of personnel training keeping abreast of the internationalization of Japanese industry, the need for language education is increasing.
For people who have no language schools or similar educational institutions within commuting distance, such as business people occupied with work, senior citizens with a strong desire to study, and stay-at-home parents who cannot leave the house due to child rearing responsibilities, an environment in which lessons can be taken from anywhere, including the company or home, utilizing multimedia and networks, will become increasingly necessary.
Expanding virtual education businesses by means of community management
Reflecting the various, ever-increasing educational needs in various fields, such as adult education, lifelong learning and language education touched upon above, virtual education businesses continue to be created on this new platform that utilizes the multimedia and networks of the digital revolution.
Against this kind of social environment, Japan's largest telecommunications carrier, Nippon Telegraph and Telephone Corporation (NTT), is working to expand virtual education businesses based on this new platform. These are being deployed using community management-based chains of spiral-shaped, strategic community arrangements among universities and various other types of educational institutions.
Centered on a small project team, NTT is examining the marketing, service development, and commercialization of a virtual education business that uses the new platform. Since 1996, the company has moved forward with proposals to various educational institutions.
In the field of multimedia businesses, which distributes visual information consisting mainly of video, businesses are being created amid trends and a market structure that allow multimedia businesses to intertwine in a complex manner in the three arenas of markets, competition and technology. This is true for networks, the various content that flows through them, and the multimedia terminals by which the content is utilized.
In such an environment, the project team is moving forward with various studies related to proposing an optimal virtual education business platform with the best possible cost-performance.
Stressing cost-performance and standards, the performance team strove resolutely to build a platform that comprehensively takes into consideration the interactivity, audio quality and other characteristics critical for a virtual education environment. The team conducted a decision-making process related to the project, determining that a combination of the standard video-conferencing system/videophone (see Kodama, 1999) based on a communications system compatible with ISDN (see below), which is ultimately a multimedia network, and a multi-point access system, were the most effective tools for a virtual education system platform.
ISDN is a digital network service (Integrated Services Digital Network) established by the telecommunications standardization sector of the International Telecommunications Union (ITU-T). Additional information on ISDN is available at http://www.alumni.caltech.edu/[similar]dank/isdn, and ITU-T recommendations are also available at http://www.itu.ch/itudoc/itu-t/rec/i.html.
The biggest advantage of this system is cost-performance, but if it spread to universities and other educational institutions throughout Japan, and the standard multimedia terminal of a videoconferencing system/videophone were utilized, with compatibility among a large number of universities, it would be possible to expand the system's utilization to include classes, joint research, etc.
For companies engaged in adult education, lifelong learning and similar educational systems, and in cases where adults are targeted, there is a high probability that this platform would create a yield-growth business model for virtual education. The reason is the situation in Japan, where ISDN itself, by the end of March 1998, had exceeded 2.6 million lines http://pr.info.ntt.co.jp/ news/news98e/980420b.html and a background of large numbers of video-conferencing system/videophone terminals having already spread to businesses, general households, etc. (see Dataquest, 1997).
In order to disseminate this platform to various educational institutions, but typically universities, the project team promoted a business strategy of tying in educational institutions throughout Japan one by one using the educational institutions themselves and a chain of spiral-shaped, strategic community arrangements.
In promoting this business strategy, it was Mr A, manager on the project team, who performed the central role. Mr A is an innovator who is keenly passionate about pioneering new multimedia businesses. To increase the accuracy of this case study, we conducted an interview directly with Mr A of NTT, who performed a central role in promoting this business. "
Our idea and mission was to realize, through multimedia and networks, an environment in which large numbers of people in Japan could enjoy lifelong education without inconvenience, anywhere, anytime, by shunting aside time and space. However, both for customers providing educational content and for customers taking classes, the virtual education system could not be expensive, and thus difficult to utilize. The most critical issue was providing customers a superior platform that offered the best cost-performance in a high quality system. A key issue was the type of customers with which we could popularize such a superior platform. As a strategy for this popularization, it was important for us to first obtain a point of entry by forming a partnership with an educational institution and succeeding in the virtual education business using this platform (excerpt from interview with Mr A)."
This multimedia field tie-up was to be in the style of two individuals from organizations in different business climates forming a community, cooperating with one another, and uniting to run a new business. So the leaders within this community had to be people who were normally innovation-oriented and had the ability to be strategic in thought and action. "
While excellent, innovation-oriented leadership was needed to make a continuous success of strategic partnership businesses, it was also important to make use of the variety of knowledge and expertise gained, and the new ideas created, in the first partnership. This approach includes both the leadership to expand and popularize the platform throughout society, and the core competence of the community, which also is important (excerpt from interview with Mr A)."
Among the important considerations obtained through the interview with Mr A were the elements of innovation-type leadership on the part of the community leaders, and the elements of a community's core competence in areas such as knowledge, expertise, and ideas (which this article refers to as "community competence"). What is also important is that both sides synchronize these elements, renew, and propagate the chain of strategic partnerships in a spiral to expand by creating a series of businesses. In other words, it is important to build into the business organization the strategic framework of the yield-growth business cycle, in which success generates success.
The spiral-shaped, strategic community arrangement chains promoted by Mr A are reflected in business expansion via a series of strategic partnerships with universities and other large educational institutions, such as those described below:
March 1996: Start of a "Study Abroad in your Living Room" service provided through a partnership with a large language school (Yomiuri Shimbun, 1996; Sankei Shimbun, 1996).
June 1997: Start of a multimedia lifelong learning course service provided through a partnership with Koriyama Women's University (Fukushima Minpo Shimbun, 1997).
August 1997: Start of a business-oriented distance multimedia language education service provided through a partnership with Overseas Broadcast Center (Nikkei Sangyo Shimbun, 1997a).
February 1997/August, 1997/January, 1998: Start of an interactive distance education system service trial carried out through a partnership with Keio University Business School (Nikkei Sangyo Shimbun, 1997a; 1997b; Nihon Keizai Shimbun, 1998a).
September 1997: Start of a multimedia lifelong learning course service provided through a partnership with the Ministry of Education's Media Education Development Center and five universities located throughout Japan (Kyoiku Shimbun, 1997).
September 1997/March 1998: Opening of a cyber college created through a partnership with Shukutoku University (Mainichi Shimbun, 1997; Nihon Kogyo Shimbun, 1997; Nihon Keizai Shimbun, 1998b).
March 1998: Start of a Japanese-American joint MBA program (Case Western Reserve University) provided through a partnership with the Japan Productivity Center (Nihon Keizai Shimbun, 1998c).
November 1998: Put into effect lifelong learning programs and other educational programs at universities in Aichi Prefecture (Nikkei Sangyo Shimbun, 1998).
Figure 1 shows the examples of the multimedia language education service and the virtual lifelong learning course service provided through a partnership with Overseas Broadcast Center, Koriyama Women's University and NTT respectively.
As has been illustrated, the project team centered around Mr A has created a series of virtual education businesses on the same platform, and made them succeed one after another.
Mr A points out the following points as conditions for making a success of the spiral-shaped, strategic community arrangement chain:"
In forming communities through partnerships, an important point is that there be resonance in the concepts, including philosophies, visions, and individual ideas, held by different business organizations, and that there be a mature relationship of trust formed through two-way communication between the two sides. Moreover, it is essential that key persons always be the responsible parties of the partnership organization. The term ''key person'' used here does not necessarily imply that they must be the top manager. However, they must be leaders at the implementation level. It is important that these key persons normally have the power to consult directly with the top managers (persons of highest responsibility) at their companies, and that they are figures of influence (excerpt from interview with Mr A)."
The most important element is how the leaders of these business organizations meet up with the key persons outside their companies, or how they discover those key persons. And the second most important element is the building of a harmony of values between these community leaders who are the key persons. For these reasons, Mr A suggests that it is important that the development and expansion of human networking via regular contact with different circles and circles outside the company, and interactive communication via this networking, be carried out and experienced on the initiative of the community leaders themselves.
With excellent innovative leadership on the part of community leaders, and in the community, through advanced sharing, creation, and innovation that make up community competence, it becomes possible to succeed with a spiral-shaped, strategic community arrangement chain (see Figure 2).
And now this article would like to describe how a virtual education business formed through a strategic partnership between Shukutoku University and NTT succeeded.
Shukutoku Cyber College based on a strategic community formation
In September of 1997, Shukutoku University and NTT formed a business partnership to create a "cyber college" trial business that conducts top management seminars, lifelong learning courses and other educational activities using Shukutoku University's content, via a multi-site network linking businesses and large numbers of adults throughout Japan.
This partnership harmonizes the vision and thoughts of both community leaders expressed by the phrase "Nationwide lifelong learning through use of multimedia," and greatly boosted the level of studies on an actual business.
This partnership involved opening a "cyber college" aimed at general businesses and adults, to start trial services utilizing the platform proposed by NTT, and included interactive management seminars and lifelong learning courses via multimedia and video.
Aimed at business managers, management staff members and other adults, the specific content initially offered by the cyber college included courses such as "Top Management Seminar" "Communication in Education," and "People-to-People Communication," which were provided over a multi-site network that linked Shukutoku University with businesses and individuals throughout Japan.
The term "cyber college" refers to a virtual university that offers distance learning through networks that allow lectures, seminars, etc. to be attended from a company office or home with the same sensation as if the student were in a university classroom or seminar hall. With the slogan, "Attend the most up-to-date business management or education course from your office or home," Shukutoku University aimed to offer courses that were a cut above adult education and lifelong learning.
This partnership was an important trial for the full-fledged creation of cyber college businesses. While it allowed Shukutoku University to acquire experience in various areas of expertise associated with providing distance learning using this platform, it also provided critically valuable, high-level organizational learning for NTT. This included areas such as forming communities, testing in the field a platform it developed for service, ferreting out various problems and areas for improvement, and receiving feedback to help it develop an even better platform.
In the field trials a variety of improvement methods were proposed, based on the evaluation of various technologies, distance learning methods, arrangement of educational materials, the multimedia environment for lecturers (audio, presentation materials, etc), and the environment for those attending the lectures. From these results, community competence in the form of knowledge, expertise and new ideas were amassed and shared, which led to even more creativity and innovation along the path toward building an ever more enhanced virtual education business.
Through repetition of advanced organizational study in the community based on this field work, commercialization of a full-fledged cyber business was begun for the first time in Japan in April 1998 (Nihon Keizai Shimbun, 1998b). This business case is at the forefront of virtual education business implemented in universities and other educational institutions in Japan, and it becomes the vehicle for the delivery of information to large numbers of adults.
To establish an even more well-rounded recurrent education program in university, graduate school and adult education, Shukutoku University will examine international distance learning among famous campuses with which they have partnerships, such as Canada's York University, Britain's Bristol University, and Carnagie-Melon University in the USA.
Moreover, as part of recurrent education for a variety of social welfare professions, planning is underway to network interactive, remote, graduate school level courses to actual facility sites, as well as to provide lectures in the form of preparatory, hands-on, care-provider learning for instructor training.
We believe the business innovation model based on the strategic community formed by Shukutoku University and NTT will continue to develop further as a yield-growth business in the future as well.
Innovative leadership on the part of community leaders
The critical key points in the success of the many business partnerships between universities and other educational institutions and NTT is that all of the leaders (the community leaders comprising the core members in the community formed by the partnerships) in both organizations harmonize their value systems.
In this business case, organization leaders had come from a framework of fixed methods of decision-making and organizational operations within existing and disparate organizational cultures. They were dependent on the harmonization of their value systems, based on awareness that their objective was to "universally provide an educational environment and opportunity for many individuals." This harmonization of value systems gave birth to a new-found drive among the community leaders to establish a virtual educational business.
The grounding of community leaders must include innovative leadership elements based on strategic thinking and the ability to act. As observed in this business case, this is the strategic thinking and action of the community leaders who create and re-form new businesses on a virtual education platform based on multimedia and networks. The strategic viewpoint is founded on long-term trends with a sharp eye on the aging of society and diminishing numbers of children.
The important point is the presence of innovative leadership. The existence of the best community competence alone will not necessarily ensure the success of the business.
In other words, regardless of how many excellent individuals holding advanced, specialized skills, knowledge, know-how, new concepts and other forms of community competence, if leadership is not present, one cannot expect the community to continue innovating and developing.
For example, the community may propose a product or service based on an excellent idea or concept. If the community leaders do not effectively promote these to the executive level and the marketplace, and do not take it upon themselves to create and implement enterprise-wide promotional and advertising strategies and strategic external political activities, the proposal will not necessarily become established as a business.
The many press releases and other announcements for external consumption produced by the partnership of NTT and educational institutions in this business case are consistent with the promotional and advertising strategies by community leaders in regard to expansion of virtual educational business on the platform proposed by NTT. By so doing, they induced manifest demand among potential customers throughout Japan and promoted market expansion, in turn creating an infrastructure for new strategic community arrangements with NTT.
Innovative leadership is made up of a wide variety of elements. Especially important is the strong inner spirit of the community leaders in their ability to resonate and harmonize the value systems of community members in regard to their thoughts, ideas, convictions, work ethics, and so on; political and leadership skills both inside and outside the company; and excellent conceptualization and human skills. The community leader must leverage his or her leadership skills to continually create and renew the community competence amassed within the community, and, through empathetic understanding and linking among community leaders, smoothly propel the entire business to the desired targets.
For example, in order for a community leader to implement a new business proposed by his or herself, he or she must touch base with other community leaders in the company, or, depending on the situation, vigorously conduct external political activities. Moreover, actively visiting important sites, gaining an understanding of problematic issues and customer needs, as well as performing top-level sales activities are strategic activities that community leaders perform themselves. These actions undertaken by the community leaders exert a large influence in gaining a sense of empathy and solidarity with his or her community members, which can lead to the power to add to community competence.
For business strategies in today's bewildering business environment and technologically revolutionary fields at the leading edge, such as multimedia, especially important is for community leaders themselves to think, and to possess a dynamism and subtlety in their strategic actions, as well as an enhanced business sense.
By continually creating and re-forming strategic communities and bringing forth new value concepts in spiral-shaped patterns, innovative leadership makes possible continuous invigoration of the entire corporate organization and the achievement of various new business ideas, as seen in this business case.
The mission of the community leaders is not only to implement a top-down management style, performing decision-making involving the human, physical asset, financial, and information management resources, as determined by the strategic direction based on ordinary long-term projections, and relying on their subordinates to perform the actual day-to-day management of the business. To rephrase, this management style differs from the armchair-type management implemented by leaders who enjoy a gift for spotting trends. A community leader must have a sensitively grasp of the business environment, formulate business strategies based on long-term trend projections fraught with uncertainty, and have the ability to think and act strategically in promoting difficult, risk-riddled business.
Thus, in addition to the traditional top-down management, the above suggests that the innovative ability of the community leaders themselves will be especially important in implementing great business ideas.
Sharing, creation, and renewal of community competence
The sharing, creation, and renewal of the information, knowledge, know-how and concepts comprising the various resources within the community (community competence) also are crucial factors for formation of new ideas and innovations in multimedia business. This community competence is the total of the competence held by individuals, and the competence maintained by all the associations and/or organizations making up the community.
To describe this in somewhat more concrete terms, community competence can be said to be, for example, the self-organizational ability possessed by the community as a whole for utilization by the middle and lower levels making up the community members to vigorously promote businesses ranging from on-site business restructuring to emerging new business development, including, as well, the integration of resources both inside and outside the corporate organization (other community competencies). This self-organizational ability amasses business results in the form of various knowledge, know-how, concepts, etc., which ensures the continuous formation of community competence.
Along with the continuous creation and renewal of the competence possessed by the individual, by the group, and by the community as a whole, at the same time, another important point is the nurturing of outstanding personnel through strategic practical business within the community.
The sharing, creation and renewal throughout the community as a whole of various community competencies acquired through a variety of spiral-shaped chains of strategic community arrangements, as was observed in this business case, will metamorphosise into the energy for the continuous creation and renewal of new business.
Conclusion
The key to the future of yield-growth multimedia business is the ability to actively incorporate into corporate management, new business styles such as strategic partnerships, mergers and acquisitions, outsourcing and virtual corporations, and to popularize and expand the various platforms that will comprise the core of multimedia business.
As such, it is critical that superior and innovative leadership wielded by the community leaders of the corporate organizations foster a variety of spiral-shaped chains of strategic community arrangements based on strategic partnerships.
To realize this, the community leaders must work to harmonize the philosophies and visions of various heterogeneous organizations outside the company. Moreover, the community leaders must exhibit innovative leadership while, at the same time, recognize the importance of amassing even higher levels of community competence through advanced organization learning within the community, and for members of the community to share, create and renew these competencies among themselves. This is the essence of community management.
A leadership image reflecting a new, never-before-tried format will be demanded of community leaders that promote community management like that presented in the business case described in this article, for both inside and outside the corporate organisation. The most important element is for future corporate organizations to foster excellent community leaders who will shoulder the burdens imposed by the corporate revolutions expected in the twenty-first century, and to promote the formation of communities based on strategic partnerships as well as business derived from these communities.
(Mitsuru Kodama is Exective Director of the Community Laboratory, 6-2-21 Schin Machi Hoya Shi, Tokyo 202, Japan. E-mail: [email protected])
References
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15. Nihon Kogyo Shimbun (1997), "NTT offers Cyber College in partnership with Shukutoku", 27 August, p. 8.
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17. Yomiuri Shimbun (1996), "PC-communications based English class trial", 22 March, p. 5.
Caption: Figure 1; Examples of virtual education services; Figure 2; Chain of spiral-shaped strategic community arrangements
Copyright MCB UP Limited (MCB) 1999
