Unleash & Accelerate
...production and streamlining operations worldwide to make the Hamamatsu-based electronics company more responsive to a market in flux. He also orchestrated a management-led buyout of the company with Taiyo Partners, a U.S.-based firm specializing in Japanese investments.
We recently sat down with Mr. Miki to ask about reshaping Roland Corporation, the rationale behind the management buyout, and his outlook on the future of electronic music. Herewith, his thoughts.
Let’s start at the very beginning. What prompted you to join Roland in 1977? It was a little company at the time that very few people had heard of. Was it an interest in music, the opportunity to be part of a fast-growing startup, or just luck that brought you there?
I hadn’t heard of Roland until I began looking for a job as I got ready to graduate from university. Once I learned about the company, I thought it would be interesting as an engineer to work on electronic musical instruments. The industry had large potential to grow, and Roland looked very exciting. It had the vibe of a small university lab where people with a passion for something could get together and work on projects they really enjoyed.
Your first job was on the assembly line building Roland tape echo machines. (There are a lot of people today who have no idea what a tape echo is, so it might be helpful to describe the product.) What was it like working at Roland’s factory in Osaka in the late 1970s? What were the facilities like, what were your job responsibilities, and what were the company goals at the time?
In the ’70s, delay and echo effects were created using analog tape machines, with magnetic tape as the recording and playback medium. Delay times were adjusted by changing the speed of the tape machine. To get multiple echo repeats, you’d route the delayed signal back into the machine.
At that time you could only find those machines at professional recording studios as they were very expensive. Roland’s Space Echo RE-201 became very popular because it was portable, affordable, and very easy to use. For the first time, musicians could buy one for personal use. Even today, years later, the RE-201 is still recognized as the industry standard. My first job was on the assembly line in Osaka, building RE-201s. The factory was just a tiny white rectangle, nothing special and very simple. We didn’t have an automatic production line system, so we handled unfinished goods one by one; everything was manual. Whenever a large order came in, someone would yell out, “Let’s do this!” and the line would speed up. We had a lot of fun.
I was put in charge of repair and production control before I was transferred to the basic R&D Department. The mission we had at that time was essentially the same as now: to deliver innovative electronic musical instruments to people around the world who love music. When I look back, it’s clear that innovation was part of the Roland DNA from the very beginning. Our corporate motto is “We design the future,” and on the line in Osaka, we genuinely believed it.
During your career at Roland you’ve worked on a broad range of products—digital pianos, synthesizers, and classical organs. What are some of the more important projects you’ve been involved with—why they were significant, what the design and production challenges were, what was your role in their development, and what the experience taught you?
One of the most important projects that I was involved with was the RD-1000 Digital Piano, which was equipped with the world’s first digital sound generator called “SA” (Structured Adaptive). It had wooden keys as well, which were also completely new to Roland. My responsibility was to create an expressive and realistic piano sound, starting with the SA sound chip. Back then, we saw this as a project that would determine the fate of Roland. Luck smiled on us when Elton John chose the RD-1000 for his world-tour concert. Afterwards, many other professional musicians followed suit. Based on the success of the RD-1000, Roland became regarded as a top global digital piano manufacturer. The amazing reaction and appreciation from musicians around the world really cemented my love for the work we do at Roland.
Engineers are sometimes accused of not being in touch with the market and what musicians need and want. How do you stay on top of trends to help steer Roland’s product development process?
We have a word in Japanese—Wagamama—that refers to thinking selfishly to create innovative products. Wagamara sums up my experience working on the C-30 Digital Harpsichord. Unlike synthesizers or digital pianos, a classical product like the digital harpsichord addressed an incredibly specialized niche. I had only two young engineers working with me on the project and when we brought the first prototype to some dealers and our own sales managers, the reception wasn’t very enthusiastic. They all said it would be tough to sell and that they weren’t very excited about supporting it.
The engineering team really had to assume the marketing responsibilities. We checked the schedules of all early classical music concerts, called the musicians, and asked if they’d like to try a digital harpsichord. If they said yes, we brought them a C-30 as a loaner for the concert. We listened to their feedback to build credibility, and we built word-of-mouth communication on early classical music community sites. We tried to explain the merits of digital equipment, like the ability to change to baroque or temperamental tuning, or the ability to choose different harpsichord sounds. But no one really seemed to care. All they wanted to know was how close its sound was to an acoustic harpsichord, or whether it was appropriate for practicing. I began to realize there was a big gap between engineers and users. If you want to understand the users’ point of view, you need to get close to them.
On the other hand, market research for new product ideas usually only turned up ideas for improving existing products. It’s important to incorporate these ideas, and our engineers pay a lot of attention to them. But I’ve told the Roland team that I want them to come up with products that I would want to play but which don’t exist yet. This might sound like a selfish approach, but I think it’s one that leads to innovation.
One of our most important evaluation criteria for new products is to think like a musician and ask ourselves if it’s something we would enjoy using.
Could you discuss the benefits of operating as a privately held company, and how it might help Roland adapt and better serve the market?
It’s all about speed and innovation. We can now make prompt decisions and take prompt action because of the alignment of ownership and management. We faced several challenges when we decided to go private. We needed to make some significant restructuring decisions that were necessary to jump-start our innovation, which had slowed in previous years. The management buyout allowed us to execute a series of restructuring measures in a very short period of time. These moves have generated real value for end-users, and financial results have followed. Being a private company has also allowed us to emphasize product development and encourage greater innovation within the firm. I believe our customers and our shareholders will see the benefit of this hard work for many years to come.
When you completed the buyout with Taiyo, you said Roland had to become “faster and more nimble.” What did you mean by this? And, what steps have you taken to achieve that goal?
Our failure to institute any meaningful changes after the 2008 Lehman crisis could have resulted in irreparable damage to Roland. When I took over the role of CEO in 2013 I realized that we had to not only reform our main business, but also that we were facing unprecedented market risks with which we had very little experience. We needed the ability to eliminate internal taboos and to remove the fear of failure from our team. In the production department we adopted “acceleration” as our key word. With the speed of change in the market, this had become increasingly important. We also had to be able to step on the brake without hesitation when needed. The changes we are making in our organization and the innovative culture we are fostering required a jump start, which our MBO provided.
Brian Heywood, Taiyo’s managing partner, said you were adopting some management strategies that were unconventional for a Japanese company, like recruiting outsiders for senior management posts because they bring different skills and perspectives. He also said that you were shifting production facilities to different sites outside of Japan. Could you discuss some of the management changes you have implemented at Roland, and how you see them benefitting the company?
If you look closely at Japan, on one hand you'll find companies that have achieved growth and success using an open and innovative management style and strong companies with over 100 years of traditional but disciplined management. On the other hand, you'll find companies mired in weak performance that tend to be bound by their prior successes. Roland used to be that type of bound company. We delayed reform and failed to incorporate outside ideas. Because I didn’t have any past experience as CEO or “wise and experienced” backers in the company, I had no problem bringing in outside professionals who were far more skilled than me. Expanding our team with valuable outside talent who are passionate about rebuilding Roland is bringing success to fans and musicians. It’s what people expect from us and what we are aiming for.
What do you see as your most important role as CEO of Roland, and how do you spend most of your time?
When I became CEO of Roland and began to look at the entire organization, I was amazed at the huge untapped potential for innovative ideas and concepts within our firm. I also saw that we already had much of the technology and the people that we needed to make these ideas a reality. But things weren’t happening because our culture had been one of top-down action, and people were afraid to take initiative on their own. It dawned on me that our first priority had to be developing a management system that would unleash that potential. That has become our battle cry: “Unleash.” We not only want it to apply to our employees, but we also hope to be creating the types of instruments and solutions that will help unleash the creativity of future Roland fans and users.
Now that the restructuring process is almost completed, my next goal is to re-engineer the management structure so we can achieve consistent growth as a truly global company. Strengthening innovation and marketing are increasingly important for us. I spend a lot of time exploring new ideas, studying market trends, and reading available literature. Internally we have begun to vigorously discuss these ideas looking for applications that will help us innovate and move with greater speed.
Roland has been responsible for a number of revolutionary breakthroughs in electronic music—the VS-880 hard disk recorder, and V-Drums to name just two. From our vantage point, in recent years product development industry-wide has been more “evolutionary” than “revolutionary”; we’ve seen more in the way of incremental improvements than major breakthroughs. Do you agree with this assessment? If, so, what do you think is the cause? And, do you see any catalysts that might change things?
You are absolutely correct, but I wonder if that isn’t in part because the whole industry has become captive of its past success. Some may argue that major innovations in technology have reached a level high enough to meet the needs of the market. The competitive nature of the performing and recording also means that musicians have a much more difficult time making a living, and less money to throw at new products and instruments. Also the number of young people interested in becoming professional musicians seems to be in somewhat of a decline.
I hope that Roland will be the catalyst for change. Over the past two years, Roland has concentrated on re-building brands by improving existing product lines to meet the demands of our existing customer base. The next step is to create Roland fans in new categories with game-changing products that allow them to more easily enjoy creating music. I don’t think new technology is always needed to achieve such innovation. Just like the Post-it note was accidentally created during an effort to develop a super-strong adhesive, there is still a lot we can do with existing technologies. By offering a new relationship to music, I believe our potential to generate new music fans and new Roland fans is unlimited.
One of the challenges everyone in the electronic musical instrument industry faces is falling prices. When Roland introduced the Jupiter-8 in 1981, it sold for around $5,000. Today, your JP-08 module offers similar tonal performance for just $399. How do you produce revenue growth faced with price declines like this?
This happens in all industries where supply exceeds demand. We should stop competing on price and instead compete through increasing the level of users’ satisfaction. Scrambling for market share with “me too” products won’t create healthy growth.
Fortunately, Roland is supported by an expansive number of professional musicians, creators, and enthusiasts around the world, and this has been our bread and butter. But there are many other customer bases where we can expand. The ELCajon EC-10 (Electronic Layered Cajon) is a good example of finding a new customer base. We continue to develop these types of unique, game-changing products in order to achieve one of our slogans: “Inspire the enjoyment of creativity.” Also, keep an eye on developments that will come out of our “Roland VS” venture we announced at the NAMM show. We teamed up with the Soule brothers (leading composers who have written the background music and soundtracks for some of the top-selling video games of all time) to try to create something truly unique in the virtual music space. We will enter the cloud-based software and solution business for music and media creators, as well as new genres like virtual reality and game music creation. I have high hopes that this will bring about some exciting innovation to the music industry and even have a spillover effect on to the functionality of the instruments we create.
We see major changes in the way people make music. Instead of playing keyboard, they are assembling samples and loops to create tracks. You’re addressing this market with the AIRA product line. Could you elaborate on how this new type of music making is affecting Roland and the industry overall?
New types of instruments revolutionized the way people make music, and that in turn revolutionized the types of musical instruments. Music created by assembling samples and loops would not have existed if not for electronic technology, so we believe this shift is a huge opportunity. Of course, with this new technology, musicians can make music just using software on their PC or smartphone without even buying a musical instrument. This widens the bottom tier of music production and greatly impacts prices while increasing competition. We have seen these types of cycles within our industry before, and we also see patterns in other industries, but I believe that truly innovative companies can find golden opportunities under any conditions.
In fact, we are beginning to see the novelty of low-end software fade and customers begin to demand professional-scale musical instruments and specialized equipment with man-machine interfaces such as the recent popularity of analog synthesizers. This means that companies like Roland that are capable of providing a high-quality experience will do well as musical tastes evolve and we begin to grasp what the next generation of music needs might be.
At the time of the buyout, you mentioned that Roland is exploring markets outside of its core music and audio business. Could you elaborate?
We are always considering other areas where we can leverage our skill set. Right now, it is most important for us to focus on our core strength in music and imaging. Having said that, if an interesting opportunity presents itself we are in a position to explore it. There is a unique opportunity to take advantage of the current changes in the music industry and see if we can apply our technology to areas such as automobiles, healthcare, or housing, so we are always conducting basic research.
Are there any companies inside or outside the music industry that you admire and try to imitate? If so, who are they, and what is it about them that you admire and want to copy?
There are some appliance manufactures who, despite competing in a mature industry, are able to successfully sell products that are sometimes ten times more expensive than the average product. In Japan, that would be Balmuda’s toaster ovens or fans. An overseas example would be Dyson’s vacuum cleaners. Their vision and the branding behind their design and technology is very inspiring. I also admire companies that are able to create a dedicated fan base and develop unique products that leverage communication with their fans, such as Lego or the Japanese camping goods maker Snow Peak.
On a similar note, are there any individuals who have inspired or influenced you in your career?
When I joined Roland’s management, I had the opportunity to meet many talented people and learn many things from them. Although I never had the honor to meet him, I learned the most important and basic concepts of management from the writings of Kazuo Inamori, founder of Kyocera, a leading manufacturer of electronic ceramics. I was inspired by some of his beliefs, like “having the passion to never give up,” “the humility to learn from everybody,” and “the honesty to be able to make the right decision.” These words guide me and give me confidence in making the right decisions.
What do you like doing in your free time?
I am very fond of do-it-yourself projects. In my spare time, I enjoy woodworking projects like building tables or making my own set of chopsticks. I also make audio speakers and amps, and weld and paint parts to customize my motorcycles. What’s most rewarding is creating electronic musical instruments that never existed before: instruments that can bring happiness to music lovers worldwide.
Subscribe to The Music Trades today!