The business environment is changing rapidly due to a variety of interacting factors, such as the acceleration of DX, the penetration of AI into society, and competition across existing industry and geographic boundaries. While many companies operating in this fast-changing business environment are adopting forward-looking strategies, Mitsubishi Electric Corporation (hereinafter referred to as “Mitsubishi Electric”) has announced its policy of transforming itself into a “Circular Digital-Engineering Company”.

A “Circular Digital-Engineering Company” is one that thrives by creating new value through the aggregation, sharing and use of customer data, and by returning this value to customers and society to solve their problems. To accelerate this transformation, Mitsubishi Electric has released a digital platform called “Serendie”. The promotion of Serendie falls under the responsibility of Mitsubishi Electric’s DX Innovation Center, and here in this article, Nobuo Asahi, Executive Officer, who was appointed as the first director of the Center, explains the intention and purpose of Serendie.

“Serendie” for the acceleration of Circular Digital-Engineering

Mitsubishi Electric has been developing its business as a manufacturer for more than 100 years. We are proud of this, but if we are bound by the conventional approach of management by business division, in which each business, such as power systems and building systems, provides specialized products within the scope of its own market, it will be difficult to provide appropriate solutions that will help society and our customers solve their problems. As problems and needs diversify, solutions that integrate multiple products and services are needed.

Considering the current situation and looking ahead to the next 100 years, we should adapt our organization to the changing times. Therefore, President Uruma set forth a business policy for 2022, which calls for the company to be transformed into a “Circular Digital-Engineering Company“.

Serendie, which we have newly launched, is a digital platform for achieving such transformation. The name “Serendie” is a coined word that combines “serendipity”, meaning inspiration brought about by chance, and “digital engineering.” As the word suggests, Serendie embodies Mitsubishi Electric’s will to have our various business divisions share their knowledge, technologies and understanding of our customers with each other, and also utilize external partner companies, to provide new solutions.

From “face-to-face” to “side-by-side”: A small change sparks discussion

One of the initiatives we have already started working on is “Serendie Street”. It aims to create a place where internal and external stakeholders come together to generate “inspiration” and create more co-creation. The inspiration will come from serendipity, the word from which the name “Serendie” is derived. The first location is Yokohama, where we will open a new facility with a total capacity of 500 people in autumn 2024.

What we are aiming for with the opening of Serendie Street is the accumulation of various changes that will lead to transformation. For example, most meetings at Mitsubishi Electric are face-to-face meetings, with our employees on one side of the table and customers on the other. But in Serendie Street, the topics and data of the meeting are displayed on a large screen that can be seen from anywhere in the meeting room, and participants can sit anywhere they like and join the discussion.

This will certainly facilitate the creation of a sense of unity in which everyone faces the issue together, rather than the “adversarial” relationship between two sides of the desk. The atmosphere will be more conducive for each participant to express his or her opinion, and thus the discussion will be more active. In fact, it may be “just a little twist and change,” but I expect that the accumulation of such small efforts will lead to transformation.

We are looking for people who are willing to change existing systems, customs, and even rules

To drive further transformation, neither technological change nor changes in organizational structure alone are sufficient. So, what does it take for a company to transform for the benefit of society and its customers?

We believe that it is important to change our mindset, or the way we think and behave. Serendie is an initiative to achieve this, and it is challenging. Here are the three approaches we are taking to drive transformation.

The first is “being customer oriented”. Traditionally, manufacturing companies has been heavily product-centric, but when it comes to prioritizing problem solving for customers, it is necessary to collaborate on products and services within the company, as well as to partner with other companies.

The second is “agile.” Many of the products and services we have provided in the past required several years of basic technology research before commercialization, taking into account the upgrade cycle of 10 to 20 years. In contrast, in today's fast-changing marketplace, what is required is to provide agile proposals that meet customer needs and address societal issues.

For example, appropriate ventilation was encouraged at the beginning of the COVID-19 pandemic. Ventilation fans and other air-conditioning equipment are our specialty at Mitsubishi Electric, and by integrating IoT into such equipment, we were able to make timely proposals tailored to customer needs. And to continue to make such timely proposals in the future, we need to adopt an agile approach rather than the waterfall approach that has been the norm in this industry.

The third is “subscription.” To meet customer needs and challenges, many industries are moving from the transactional model of selling products and services individually, to a subscription model. This requires not only a change in our mindset but also a major overhaul of the accounting systems and business planning processes.

In the change of mindset in these 3 approaches, human resource development is also a key factor. Instead of those who think, “Everything will be fine as long as I work according to the existing systems and conventions,” we expect to see human resources who question the existing systems and conventions, and who can also change the rules if necessary. To exaggerate a bit, I would like to see an increase in the number of employees who take an active role without clinging to Mitsubishi Electric.

Competitors are no longer adversaries but partners

At the Serendie launch event in May, we declared that Serendie-related businesses should reach a scale of 1.1 trillion yen by 2030. To achieve this goal, we estimate that we will consider a cumulative total of 500 to 1,000 ideas and commercialize 100 to 200 of them. However, if we are to achieve this number, it is essential that we accomplish the internal transformation of the company, as well as the cooperation with people outside the company, which I mentioned earlier.

Mitsubishi Electric’s competitors seem to be making similar innovations under different names, but we have no intention of competing with them. In fact, we are actively interacting with each other, so I hope to break down the barriers between us even more than before. What we need to address is strengthening the competitiveness of Japanese companies as a whole and solving societal problems, not competing with our Japanese peers in a narrow field.

We need to take a broader view of things, and fight and overcome our fears about the future. To achieve this goal, we cannot afford to reject cooperation by saying that they are competitors, can we? We are determined to join hands with the right partners in the right way, and consequently make a profit as a company, and thus, we will build a happy future. This is the ideal vision of the company that we at Mitsubishi Electric are striving to achieve.