For years, Matsushita Electric Industrial was known by the unflattering moniker "Maneshita." Loosely translated as "copycat" from the Japanese, it was a biting but apt description of the tech company's stable of me-too products. The Osaka-based company's brands—National home appliances and Panasonic consumer electronics—had a reputation for top-notch quality and technology but dull styling or, even worse, blatant imitation.
Analysts often took Matsushita to task for not being more attentive to branding and design. It was a weakness that led to the company's scattershot ad campaigns, its redundant product offerings, and its brands' low standing among consumers. As Matsushita's sales and profits steadily went south in the 1990s, those qualities became a major liability.
After taking the helm in 2000, Matsushita's chief executive officer, Kunio Nakamura, made design a priority. By 2002 he had gathered all the designers into a single division and put Toyoyuki Uematsu in charge. These days, Uematsu likes to pull out two presentation slides that are a "before" and "after" snapshot of how the design division has given products a more uniform look and feel.
BRAND NEW IMAGE. One shows Panasonic products circa 2002. A refrigerator, vacuum cleaner, washing machine, TV, and DVD player sit side by side. Designed by different divisions, the items share few color or design elements, and are a hodgepodge of shapes and materials.
Those same types of products look very different in the second slide. Now they're sleeker and every model comes in silver as well as a handful of other shades. Recyclable aluminum is the material of choice, drawers slide and doors swing open and close more easily, and buttons are self-explanatory—a reflection of Uematsu's push for universal design elements that make high-tech products accessible for the elderly and less mobile.
This year's Industrial Design Excellence Awards were a sweet vindication of Uematsu's efforts. Panasonic took home six awards—more than any other company—for an emergency flashlight, a high-definition video camera for professionals, a washer-dryer, surveillance camera, fridge, and home-use fuel cell. The attention from the design world has coincided with a rebound in net earnings to 15-year highs for the once-ailing company.
Uematsu, whose title is president of Panasonic Design Company and who has designed everything from refrigerators to TVs, recently spoke with BusinessWeek's Tokyo correspondent Kenji Hall about Matsushita's design principles, its merging of high tech and cutting-edge design, and how its designers came up with the IDEA-winning products.
Can you explain Panasonic's basic approach to design?
Beginning in 2002, when President Kunio Nakamura created the Panasonic Design Company, we decided that our key products—what we refer to as "V products" [including flat TVs, digital cameras, washer-dryers and air-conditioners]—should share certain traits. They all have to meet three criteria: incorporate universal design elements, use in-house "black box" technology, and be environmentally friendly. For each product, we draw up a list of challenges we want to tackle over the next three to four years, and we have designers and engineers continuously work on solutions.
How did Nakamura, who stepped down as president on June 28 to become chairman, change the company's strategy for branding and design?
Matsushita Electric was the first Japanese company to have an in-house design studio, in 1951. The founder, Konosuke Matsushita, set it up after seeing how a U.S. manufacturer cited design as a reason for higher prices. [Matsushita's first design chief was influenced by the 1919-1933 Bauhaus movement, a modernist art and architecture school in Germany that promoted the idea of functional, cheap, and mass-produced goods and architecture.]
For years, we had designers and a slogan—"ideas for life"—but no coherent branding strategy. Then Nakamura reorganized the divisions under a revival plan. He wanted a centralized, top-down, companywide strategy that would link the 15 divisions in some way. We came up with guidelines.
We make a lot of products [3,500 design projects globally a year], but whether it's a flat TV, stereo, cell phone or digital camera we wanted there to be some consistency on form, materials, and lights. We wanted our products to be unisex, to have certain standard colors—ceramic white, silver—and to have lights of a certain hue, such as accent blue. It's still a work in progress. We are now developing prototypes that will offer a textbook example of our approach and look.
In the past, the nickname "Maneshita" stuck because your products seemed to be knockoffs of rivals'. Do you think you've changed that?
Matsushita was never a conscious imitator. There was no order from above to copy rivals' products. Having said that, I think the divisions had tunnel vision when they had control over their own products. They were in charge of a narrow product sector and competition within that sector was everything to them.
Branding took a backseat to the individual products. So if there was a hit product on the market, they tended to follow the leader. Every tech maker faces the same sort of dilemma. A market research firm did an analysis of several tech makers' products and found many to be strikingly similar. If there's a brand strategy, the emphasis is on how to improve the product so that it adds brand value. There's also a growing recognition of intellectual property rights in Japan, which discourages knockoffs.
How have you raised awareness of the importance of design at Panasonic?
Since 2002, we've held an annual company-wide design contest. The winner gets a trip for two to Hawaii. The contest brings out many good ideas. The disaster flashlight, which can run on any of three different battery sizes, won the contest last year. It's lightweight and waterproof and doubles as storage for batteries. Another contest idea was a wearable vacuum that you'd carry like a backpack. It looked like something out of the movie Ghostbusters. The attachment for sucking up dirt had flashing lights—it was supposed to make house-cleaning fun.
Matsushita is traditionally an electronics hardware maker. But the digital era has made it increasingly important for these gizmos to have embedded, easy-to-use software. Do you consider software designers on the same level as hardware designers?
Software designers are a very important part of our strategy. We can't afford to just offer isolated products. We raise the performance of each product by linking them. Take the Viera Link. It's a remote controller that lets you send commands to any device in the high-definition home theater. [Point the controller at the TV and the commands travel through the TV's digital plug, known as HDMI, to the other equipment, such as a DVD player or audio amplifier.]
Viera Link is the first of these products. In the future, having products that can communicate with each other will be crucial to our universal design goals. Your digital audio and video devices for the living room and home appliances will all be connected over a network. That will mean no instruction manual and yet greater customization of settings.
We have 300 designers, about 40 of whom work on interactive design—that is, finding ways to connect different digital devices. For cell phones, we have more software interface and interaction designers than exterior designers. Sounds, lights, temperature—these are all design elements that are just as important as a product's exterior.
In recent years, Matsushita has improved its supply-chain management and cut manufacturing costs by developing products that are made for different markets from as many common parts as possible. Do these weigh heavily in the decisions your designers make when they're working on a new product?
Our designers don't work alone. They collaborate from the beginning with engineers. But it's not about making a low-cost product. There's more emphasis on added value. Depending on the product, designers will often use the time during a lull in product cycles to experiment with different materials and shapes and sizes. That way, they're exploring ideas even before the planners come with a request for a next-generation product.
Can you go over a few design features of the IDEA-winning refrigerator?
We changed the position of the fridge's compressor unit. On most models it's behind the bottom drawers. But that means space is scarce in an area that's easiest to reach. We conducted a survey and found that few people use the top shelf because it's too hard to reach. So that's where we put the compressor. There was an added benefit: It acted as a counterbalance to prevent the fridge from tipping over during earthquakes.
It also increased fridge space by more than 10% without changing the overall size of the fridge. Another "black box" technology is the outer material—a combination of an aluminum shell and a vacuum layer of insulation that has made the fridge more efficient. It's similar to a thermos' outer layer. In the future cars will be made of this material. Or homes. If you had this insulation you might save up to 30% on heating and cooling costs.
Normally, clothes dryers rely on a combination of a heating unit and water to raise the temperature inside the drum and carry away moisture. Panasonic's washer-dryers use a different technology. Can you explain?
It has a heat pump, instead of a heater. [The heat pump dehumidifies the air inside the drum, and the byproduct, hot air, is channeled back into the drum to dry clothes.] This energy-saving technology was developed in-house. The drum used to spin vertically; we tilted it so it faces upward. It's now easier for the elderly or someone who's wheelchair-bound to grab things from the back of the drum. Also, once you tilt it, the water inside accumulates at the back, and you end up using about 30% less water. Universal design and the environment were two major considerations.
Have your home-use fuel cells sold well?
The Japanese prime minister's residence has one. But consumers aren't yet big buyers. Each fuel cell unit can provide nearly enough energy for one household. And since water and heat are natural byproducts of the process of converting hydrogen and oxygen into electricity, you have a source of hot water for baths or for washing dishes.