A culturally attuned approach is required.

Leaders across Japan’s private and public sectors are trying to reignite growth and achieve levels of performance and productivity on par with global standards. From “Abenomics” to the 2020 Olympics, the case for change in Japan is firm and visible. Ever-increasing competition and a shift of innovation away from sectors where Japan was traditionally strong (from hardware manufacturing to services and software, for example) are pushing Japanese champions to globalize their practices. Slow domestic growth and sluggish modernization of the operating model mean that multinational companies must struggle to deliver the profits they once did in Japan. Many services that have been streamlined and digitized in the West, for instance, are still human powered, at a high level of customization.

But global companies trying to take a page from the usual change-management playbook may struggle in Japan. Domestic experience is limited, and a more effective approach has yet to emerge. Change management is a complex endeavorinspiring multiple perspectives. Research suggests that only a third of change-management programs globally achieve their original objectives. Employee resistance is a factor in a significant proportion of programs that fail.

A few core elements of change management are universally recognized: inspirational and effective change leaders to act as role models; a change story, with real meaning, to persuade leaders and employees; new mind-sets and behavior among employees; and the orchestration of change in an expanding, self-sustaining wave throughout the organization. But our experience supporting change efforts in leading Japanese organizations (and in multinational organizations in Japan) suggests that this approach must be adapted to the country’s specific conditions.

A change-management approach focused on “the last man standing”—in addition to the “change leader or agent” model at the core of most Western approaches—may be the one most suitable for consensus-driven organizations in Japan and other cultures. Leaders in Japan understand that change programs fail at the middle-management level, where just a few people (or even one) can impede the consensus-building process. We believe that change-management programs can increase their chances of success not by fighting a consensus-oriented culture (or by strengthening the top-down communication cascade) but by focusing greater effort on the potential blockers. A set of simple practices can increase the chances of success in major transformations.

Here we share our observations and lessons on how to drive change in Japan. The objective is not to treat the subject exhaustively but rather to provide empirical observations from our experience.

Small, independent teams are the lifeblood of the agile organization. Top executives can unleash them by driving ambition, removing red tape, and helping managers adjust to the new norms.

What does it take to set loose the independent teams that make agile organizations hum? These teams are the organizational units through which agile, project-based work gets done. The typical agile company has several such teams, most composed of a small number of people who have many or all of the skills the team needs to carry out its mission. (Amazon CEO Jeff Bezos contends that a team is too big when it needs more than two pizza pies for lunch.) This multidisciplinary way of composing teams has implications for nearly every business function. Take IT management. Instead of concentrating technology professionals in a central department, agile companies embed software designers and engineers in independent teams, where they can work continually on high-value projects.

While much depends on the actions of the individual team members, senior executives must thoughtfully create the environment in which teams and their managers can thrive. In a nutshell, senior executives must move the company—and themselves—away from outmoded command-and-control behaviors and structures that are ill-suited to today’s rapid digital world. They must redouble efforts to overcome resource inertia and break down silos, because independent teams can’t overcome these bureaucratic challenges on their own. They must direct teams to the best opportunities, arm them with the best people, give them the tools they need to move fast, and oversee their work with a light but consistent touch. These ideas may sound straightforward, but they go overlooked by too many leaders who’ve grown up in more traditional organizations.

This article explores how senior leaders can unleash their companies’ full potential by empowering small teams and supporting their managers, whose roles have been redefined by agile thinking (exhibit). Let’s start with a glimpse of what that looks like in action.

The digital finance organization remains an emerging concept in many organizations, and CFOs are still at one remove from the center of digital-transformation efforts, even though they own and manage much of the relevant business information that feeds such initiatives. There is a clear mandate for them to take the lead: today’s CEOs and boards say they want CFOs and the finance function to provide real-time, data-enabled decision support. And, in our most recent survey of finance executives, CFOs themselves say they want to spend more time on digital initiatives and the application of digital technologies to finance tasks.

But our research also shows that CFOs still spend less time on digital trends than they do on traditional finance activities. Why? There are few proven business cases of digitization in finance and few best practices to draw from, so CFOs are often content to let colleagues in IT, marketing, or other functions press the issue.

Many CFOs tell us they are unsure where to start; the rapid arrival of innovative technologies plus a general shortage of top technology talent won’t make it any easier. CFOs must begin to experiment, however, or risk falling behind other functional groups in the organization and other companies in the industry whose digital transformations are already under way. They might lose a golden opportunity to help drive the business agenda.

A good start would be for CFOs to work with the CEO, the board, and others on the senior-leadership team to proactively and systematically identify tasks and processes within the finance function that would most benefit from digitization. They can then locate and invest in the technologies and capabilities required to improve these areas.

Between rising customer expectations and unpredictable moves by digital attackers, R&D organizations at incumbent companies are under intense pressure. They’re being asked not only to push out innovative products and services—which is key to ramping up organic growth—but also to support the formation of digital business modelsthat compete in new markets. Yet many R&D teams, particularly at companies that make industrial products, find themselves hampered by longstanding aspects of their approach, such as rigidly sequenced processes, strict divisions of responsibility among functions like engineering and marketing, or a narrow focus on internal innovation.

Some product-development teams have begun to overhaul the way they work as part of wider digital transformations at their companies. Those transformations can take a long time, though, as companies modernize their IT architectures, adopt new technologies, reorganize people, and learn agile ways of working. Since digital rivals aren’t waiting, product developers at incumbent companies need innovation accelerators that they can put to use almost immediately. But with a wide range of technologies and methods to choose from, where should they start?

In our experience helping incumbents update their R&D practices, four solutions stand out for their substantial benefits, as well as for their ease of integration with existing activities. With so-called digital twins of in-use products, R&D organizations can make sense of product data across the entire life cycle, thereby reaching new insights more quickly. Once incumbents identify promising concepts, they can shorten the product-development cycle by staging virtual reality (VR) hackathons. Some will need a jolt of inspiration to speed up the R&D process. In that case, they can try holding “pitch nights” to collect and sift through ideas from outside the company, or setting up in-house design studios, or “innovation garages,” to stimulate internal collaboration. Here, we explain how established companies are using these approaches, either singly or in various combinations, to develop winning products rapidly against threats posed by digital challengers.

Companies can determine whether they should invest in blockchain by focusing on specific use cases and their market position.

Speculation on the value of blockchain is rife, with Bitcoin—the first and most infamous application of blockchain—grabbing headlines for its rocketing price and volatility. That the focus of blockchain is wrapped up with Bitcoin is not surprising given that its market value surged from less than $20 billion to more than $200 billion over the course of 2017. Yet Bitcoin is only the first application of blockchain technology that has captured the attention of government and industry.