Successful U.S. firms have kept an eye on the East and proved that America, even as it remains a world technological leader, has lessons to learn from its Asian competitors.
MacNeal-Schwendler--a Los Angeles-based pacesetter in computer-aided engineering software for the aerospace and automotive industries--has demonstrated that a well-run American technology company, by using Japanese-style practices, can dominate even the Japanese marketplace in its field.
Chief Executive Joseph F. Gloudeman said the firm has invested years in nurturing relationships with Japanese customers, a long-term commitment paralleled by its practice of spending 15% to 20% of its revenue annually on research and development.
Top executives visit Japan and other overseas markets annually to get customers' suggestions for product development. A couple of years ago, Gloudeman earned the kind of good will most American executives can only fantasize about by addressing his Japanese audience in Japanese. For 30 minutes.
"I figured since close to 17% of our revenues were coming from Japan, I ought to learn to speak a little Japanese," Gloudeman explained. "It makes the Japanese feel all the more comfortable speaking English with me."
In Charlotte, N.C., Nucor demonstrated that Japanese-style production and labor management techniques could make a steel company profitable even as bigger, less flexible competitors were collapsing in the late 1970s and early 1980s.
The biggest U.S. steel companies "got into a serious problem, which companies can if they don't keep their facilities modern and up-to-date technologically," said F. Kenneth Iverson, Nucor's chairman. "They find, No. 1, they don't have any profits, and then they don't have any money to buy the new technologies that are necessary to make a profit."
'Not Invented Here'
Nucor always has rejected the "not-invented-here" mentality, the idea that only products and processes developed in-house are worthwhile. "That's not at all practical in this day and age, when you have new technology developing around the world in many different industries," Iverson said.
Evidence of Nucor's open mindedness: A new mill in Indiana will use a thin-slab casting process developed by a German company, while a new mill in Arkansas will use technology developed by a Japanese partner.
The company's research and development spending does not compare to that of a software firm; it has hovered in recent years under 2% of sales. But spending is focused on improving processes.
Iverson says many ideas come from workers in the mills. And Nucor benefits from the inventions of outsiders who gravitate toward companies perceived as open to innovations.
"As soon as one is developed somewhere, we are early to hear about it, just because we have a reputation that we're eager to accept new ideas," Iverson explained.