Gary Horsfall
Gary Horsefield:
We plow an enormous amount of money into research and development and even when things have been tough, when the recession and the market was depressed, we continued to invest in research and development so we still spend between nine and a half, ten percent of our worldwide revenues on research and development.
Not many people realize that Canon is either number two or number three in terms of the number of patents lodged every year worldwide so we're a technology leader because we invest and we keep investing in creating new technology.
Johnny Spragg:
I know you mentioned the patents. In its 70 year corporate history, you've had twenty-six and a half thousand plus U.S. patents. But I think everyone recognizes in a way that firstly Canon, the camera but of course there's so much more to the company now. Where do Canon's strengths now lie?
Gary Horsefield:
I think we have a very complex business now in Canon worldwide. We have the camera business as you say, but it's now diversified into video but also the printing business. It was copiers, but it now is infrastructure and printing services.
Those are our main two core business in Europe but then there's the medical business and in Asia, there's numerous other businesses that currently we don't have in Europe
Johnny Spragg:
That has been a revolution obviously within the culture, as well here at Canon from obviously when it first started. There's so much; Canon's so steeped in history. How has that challenge been to change the culture for a company that's so huge?
Gary Horsefield:
I think the culture's developed but I don't think it's fundamentally changed. I think we have the same values as when we first started. We have our kyosei heritage, which is really we genuinely believe in getting compromise and getting understanding and living in harmony between products, people, processes, company. And Canon genuinely shares these attributes with its employees. Our attrition rate on staff leaving is very, very low because we do actually care a lot about our employees, a lot about what they think and we try and get this work-life balance right.
And we extend that into the way we deal with our customers. We're not a hard organization. We're actually quite a soft organization to deal with and we maintain these values, as I say, through crisis, through dips in the market.
Johnny Spragg:
You just mentioned the word customers. It was part of my next question for you. Customer centricity, what does that mean here at Canon?
Gary Horsefield:
For us, it's very much a belief that the customer knows best. And often maybe in the past, where we had product led sales, people manufactured products and then sold the product to the customer. Now we're much more listening to our customers. It was technology led, it was innovation led so people created a new piece of exciting technology that was put into the product and they were then sold to the customers.
Now we're listening much more to our customers about what they actually want and what they actually need and that information is then being used in the preparation of the new generation of products. So it really means putting the customer at the heart of our business and really understanding what they want and what they need and then developing technology that meets that demand from our customers.
And I think the big step forward in Canon is that we recognize that whilst we are number one in lots of different areas, we can't be the experts on everything. The modern world is too complicated. It's too difficult so the big pushing Canon into developing new businesses is gonna be who do we partner with? Who can bring something different? Who can bring something unique? Something exciting that adds real value or unleashes the potential of a feature of a Canon product and that's gonna be the businesses of the future is finding the right partners with the right profile, the right credibility, the sort of partner Canon wants to work with, not just as a suppler of product but as a genuine strategic partnership to actually deliver something that much better to the customer or that much fits much better.
Johnny Spragg:
Has it been a natural process moving from being product focused to be more customer focused?
Gary Horsefield:
No, no, it's a very difficult change to make. A lot of our processes at Canon are very rigid. We're very thorough, very strong Q and A, everything is very well documented and that's the strength of the brand, is the strength of the hardware. Hardware development cycles are five years and ten years.
Software development cycles can be days and changing from a process that's very well documented, very sound, very robust process to a more dynamic process is a big challenge and it's not just the processes, it's actually the people. It's bringing the people with you in those changes so there's been a, from an organizational point of view, we have to develop our people to meet the challenges of this new world and that's one of the big challenges is actually getting the right people with the right skills to meet the challenges of the new environment.
Johnny Spragg:
Okay so, there has been a change of focus, there is a new business model, you're in charge of a new business set to within Canon. Where do you see the future? Will it be developing what you already have now?
Gary Horsefield:
I think there will be an element of that but I think the key in the future, I think we've talk about it used to be having access to a product, then it will be adding access to a piece of software and these were very generic. Now we're talking about customizing software and in the future we're gonna talk about personalization.
You're gonna want solutions for you and your business that actually meets what you want to do. Not I've got to do it this way, no, I want to do it this way. You help me do it the way that I want to do it.
Give me a differentiating competitive factor over my competitor, help me make my business better, faster, cheaper, or give me something different to what other people in the market have got and that's gonna be the area where all this multimedia collides and we'll see it in our domestic lives as well. The onset of technology will be relentless and the speed of it will continue and continue, but the big thing is gonna be all these technologies colliding and the point where that happens - there's no problem with data or information, we're all overloaded with it.
The key's gonna be how do you manage it and that data could be a video, it could be a photograph. It could be something from the internet. It could be a piece of paper, it could be a digital document, it could be anything but the point where they all collide is gonna get very complicated. It's gonna be a mixture of things and the companies that can actually understand that, manage it and make it easier for the customer to actually use that data in effective way, those are the people that are gonna win in the future and I think Canon is uniquely placed to manage all these different types of multimedia.
Johnny Spragg:
You mentioned the colliding of mediums and the coming together. It's about businesses being ready to manage that. Can you give me some examples?
Gary Horsefield:
Yeah, in our early discussions about this new business we've already spoken to a number of organizations, organizations that use photographs. Up to now, we've supplied them with cameras, but what they actually do with those cameras is really quite interesting so - for instance in a bank, the opening of a bank account is a very long tiresome process that requires documentation, information, passports, photographs, various sort of things needed. Imagine if we could actually halve the time it took to do that. It's a great benefit for you as a consumer, it's a great benefit for the bank and that's the type of thing that Canon can do.
Actually, my wife just recently had a baby and during the pregnancy she has to physically carry the notes around with her and it's got x-rays and photographs and doctor's reports and there's some records of the doctor, there's records of the hospital, there's some with the maternity unit, but she has to physically carry it around so imagine if there was a way of having that available anytime, anywhere without having to physically carry documents around.
So there's lots and lots of examples where you're getting these media starting to collide and how to manage it effectively at that time. And I think our customers want to come to someone like Canon who's got this heritage and experience and say "Not just sell us the product, but help us use it effectively. Let us know about what technologies coming, about how we can use these features rather than just selling us a product and giving us a guidebook. Talk to us about how we can use it effectively and get the most out of these products." And that's gonna be the businesses of the future.
Johnny Spragg:
So what you're saying is their core business values, we discussed that early on, has to always be that first step to understand that and almost specifically build something around that whatever those mediums are that make up their business and of course, their core values then you have to work with them to do that. That's the level that’s -
Gary Horsefield:
Yes, yes, yes. That's exactly it and these areas start to cross over in all sorts of different ways, in the retail you've seen now ads on the television, you can see cameras that can actually recognize people’s faces and as you move the camera the focusing chain moves with the person. So imagine if you could use that tin terms of analyzing footfall in a large department store. You could recognize the people who've got loyalty cards. You can actually recognize the number of times they come in the store and there's a number of issues around that but as an opportunity, something we can talk to our customers about.
So the technology starts being used in different ways, in different organizations and that's gonna be the key to the future, not just delivering the technology but how can I actually use it effectively and help my business move forward.
Johnny Spragg:
I wanted to go back to talking about the strategic partnerships that are being established and more so then they've perhaps ever have been in Canon's history. Can you give me an example of where that relationship has been to benefit both Canon and focuses the consumer?
Gary Horsefield:
Yeah, a good example is we've actually acquired a number of companies in this area. And they tend to be small, niche software companies, companies who have a different way of working. As I said previously, they're very quickly, they respond very quickly, they move very quickly and we acquired a company called Antigua which is a small German company and there was a feeling that when a large company takes over a small company that the small company disappears but we keep the company completely separate.
They've kept their own name, they kept their own identity, they manage themselves. Obviously, we're a strategic of what they do, we provide input to them, but their creativity, the way in which they do things, the processes that they have, we keep them away from Canon so that we don't strangle them or restrict them in any way. We actually want to keep them vibrant; we want to keep them quick. We want to keep those processes, to be close to the customer and continue to do the things that we do.
So it's a good example of a large company working with a smaller company and not interfering too much. And that's the type of progress that we want. We want to give them the financial stability; we want to give them access to new markets. We want them to use the Canon relationships but to keep their uniqueness and not be, sort of as it were, absorbed into this big organization.
So we've done this in a number of different ways and a number of different software companies and we've taken small acquisitions, we've also taken significant acquisitions and that process will continue. And we do exactly the same with somebody we have no financial interest in. We don't want to impose ourselves upon them. We want them to bring something unique, something that complements or adds to what we do. And that's where you get the real benefit.
Johnny Spragg: Gary Horsefield, thank you very much.
Gary Horsefield: Thank you very much.