The Ricoh Business Innovation Lounge Tokyo provides customers with sneak peeks at Ricoh products and services that are under development.

Ricoh Japan Corporation is a domestic sales subsidiary of Ricoh Company, Ltd., a leading manufacturer of office equipment. Its offerings include multifunctional printers that combine printing, facsimile, and other functions.

In September 2018, Ricoh Japan opened the Ricoh Business Innovation Lounge Tokyo. Despite its name, this neither a place for unwinding nor a place for quietly doing deals. It is not even a showroom for Ricoh’s wares, as it extensively displays many rival offerings. Entry is by invitation only for a maximum of two companies daily. So, what exactly is this facility for? We spoke with Ricoh Japan’s Hideyoshi Kikuchi to find out. He leads operations at this facility in Tamachi, a bustling business area of Tokyo.

Exploring issues with customers to co-create new value

Mr. Kikuchi says that, “We created this space to address evolving customer demand. Over the years, we have delivered value by identifying the immediate challenges of customers and providing solutions. But there are limits to such an approach these days. Technological advances and the widespread Internet usage make it far easier for customers to resolve issues by themselves. We realized that simply remaining a solutions provider would take us nowhere.

We have to rethink changing customer needs from different perspectives or work with them to create new solutions to their challenges based on unique approaches. So, in pushing ahead with such a marketing process we backcast to define how best to progress with product development and proposals.”

Providing external expertise that overcomes the limits of in-house innovation

Mr. Kikuchi positions the new lounge as a vehicle for identifying challenges with customers and resolve issues by co-creating new value with other companies.

Mr. Kikuchi says that, “One instructive driver for us was the finding of a study team that Shu Yamaguchi led at Hitotsubashi University. The team looked into 100 examples of corporate innovation efforts in Japan. The team found that just 4% of special projects receiving top management approval to work on internally conceived concepts actually delivered innovations. That suggests that there are limits to in-house innovation efforts. We believe that the ingredients of successful innovation are ideas and visions that are unique and assistance from external experts.”

Mr. Kikuchi adds that, “The lounge brings in sharp-minded experts from an array of industries to solicit their feedback on semi-finished products and ideas and draw on their collective intelligence to create new value.”

Ricoh Japan sales representatives around metropolitan Tokyo invite experts from major innovation-driven corporate customers to visit the lounge. They take part in a two-hour session, which provides sufficient time for facilitators like Mr. Kikuchi himself to engage the visitors in substantive discussions.

The lounge has been incredibly well received.

It hosted more than 120 visitors in its first six months or so, of whom around 40% were senior executives. Several sessions resulted in innovations, which was testament to the serious intent of these visitors.

Immersing guests in new value scenarios

Mr. Kikuchi says that the lounge has prepared around 100 new value scenarios that it can choose from for guest sessions. Once a reservation is made, lounge personnel meet with sales representatives around two weeks before a visit to ensure everyone is on the same page with issues and determine scenarios to share with customers. There may also be a decision on which Ricoh Japan people will attend sessions, such as product or services personnel.

The sessions are all about straight talk discussions, experiences, and emotional responses.

The sessions draw on the experience and expertise of customers in evaluating products under development, with their ideas possibly pinpointing can technology applications or combinations that may have escaped the attention of Ricoh insiders.

Mr. Kikuchi values the candid feedback from visitors. He says that, “The lounge is all about co-creating new value through intensive deliberations with customer decision makers who realistically understand what happens on the frontlines.”

A customer reality check changes everything

While the lounge’s reservation backlog of several months suggests that things are progressing well, not all the sailing has been smooth.

Mr. Kikuchi recalls a session just after the lounge opened in which an executive from a major corporate customer lambasted Ricoh. The executive said charged Ricoh with being unable to deviate from its product roadmaps or focuses. Mr. Kikuchi notes that the executive added that at the current rate Ricoh would be unable to keep up with the pace of business change among its customers even if its technologies were in place.

Mr. Kikuchi responded swiftly by immediately informing Ricoh Japan’s senior management, which accepted the criticism and engineered the necessary internal changes. He says that Ricoh Japan is now working closely with the parent company’s Management Planning Department , Ricoh IT Solutions Co., Ltd., and other entities to build a structure that responds more nimbly to customer feedback. He adds that the lounge held more than 100 briefings internally to beef up collaboration within the Ricoh Group. This effort paid off, he says, by enabling the lounge to collaborate with departments that never knew of its existence.

The lounge’s presence and potential from divisional perspectives

How do Ricoh’s business divisions see the lounge? One valuable view comes from Sayaka Tsujii, who markets Interactive Whiteboard software at Ricoh’s Digital Business Group.

She says that, “Our team develops and markets applications to create conference solutions. We have combined IBM’s AI Watson and Microsoft’s Azure speech-to-text platforms to semi-automate meeting minutes taking. Our setup helps companies to clarify their action plans and decisions and achieve their goals on time.”

Ricoh employs agile development techniques to ensure that these solutions swiftly reflect market changes and customer feedback.

Ms. Tsujii notes that, “We’ve received a lot of feedback through the Ricoh Business Innovation Lounge Tokyo from customer using our solutions. Our agile development approach enables us to translate feedback into solutions upgrades in just four or five months. For us, the lounge is a unique and valuable vehicle for getting almost daily opinions from customers on products before we launch them.”

One new idea that Ms. Kikuchi’s team obtained from a customer at the lounge was to add a new device to the Interactive Whiteboard system to create completely new applications .

Fiction writers often depict corporate managements as inflexible and clueless about workplace realities. The reverse is more often true, and executives generally expend considerable effort in tackling business domain issues. The lounge thus serves as an important venue for key industry leaders to candidly judge Ricoh’s work in progress.

Ricoh Japan’s co-creation approach has already begun to bear fruit.

Reaping co-creation business rewards in fiscal 2019

Mr. Kikuchi looks to step up the lounge’s operations during fiscal 2019.

Mr. Kikuchi says that, “Ricoh Japan can learn much from customers through the lounge. We have received numerous ideas for innovations. I’ve discovered that this vital, as deep thinking will be of paramount importance in the years ahead. They say that true innovators are people who never give up. The lounge will accordingly be persistent, positive, and passionate as it drives ahead.”

According to Mr. Kikuchi, the lounge has collected 360 key items of customer feedback since opening. He estimates that more than 10 items could form the basis of manufacturing through distribution co-creation projects with partners.

While it is hard at this juncture to pin down what will result specifically from co-creation efforts through the lounge, Ricoh Japan is convinced that that it will be able to materialize new solutions and value that neither it nor its customers could achieve alone.