Mr. Genki Oka, Partner, McKinsey and Company, Tokyo Office
Of the nations that are represented here at the forum, we all live in an aging society. Each aspect of the Forum has been vastly influenced by this social phenomenon of a hyper-aging society. What lessons can the rest of the world take from Japan? As a partner at McKinsey, Mr. Oka has seen a dramatic increase on behalf of McKinsey in this topic. Inquiries are coming in from high-tech, retail and life insurance companies which are concerned with how they can capture and address the again population as a business opportunity.
Key questions that came out of this session:
• How can corporations capture the aging population’s impact on GDP and labor participation rates and turn this into a business opportunity?
• What does all of this mean for us at an individual level?
• Could the 65 and above populations work more? Could they spend more?
The contribution of every generation needs to be valued and utilized, from younger employees to mature employees. While younger generations possess the latest knowledge, flexibility and career hunger, mature employees have experience, a strong network and the embodiment of the organizational culture. In his research, Mr. Oka has found that successful companies are those that integrate the two generations. This requires that companies evolve their working models to retain talent.
Mr. Oka gave examples of two Japanese companies (one CPG and one retail) and a European utility company that have tried out unique new models including the structure of work hours, performance review structure, and different career trajectories. The impact has been an increase in retirement age, better maintenance of payroll cost, and a reduction in sick leave. Companies must also focus on ensuring the preservation of knowledge and expertise within their organizations. How can they do this? Companies must innovate their working models, as described above, and also match capabilities in order to retain knowledge.
How might the 65+ population spend more in the economy? Japan will experience an increase in single-person households. Along with this will come a need for care-giving as individuals will need assistance. McKinsey has focused less on unmet medical needs and moreso on adherence to unmet needs. For example, improving dosage form, and preventing patients from forgetting to take drugs. An example was given about how nursing homes can increase the thickness of green tea to make it easier to give drugs.
Scanning fifteen industries that provide products and services to the elderly, companies should focus on the following: relieving anxiety and loneliness of seniors; effectively utilize excess time on the hands of this population; offer alternatives to maintain youth; bring back good memories, etc. What services at the forefront of an aging society are doing well? One company uses leather in creating customized shoes that prevent elderly from tripping. This company sold 2 million pairs of shoes in 2013. Another example was a service company that not only cleaned houses, but also performed various chores, such as changing a light bulb. Both companies, by studying the aging population and their needs, were able to come up with businesses that have attracted enormous momentum.
Key success factors to managing the aging population:
• The elderly do not want to be treated as “old people” – don’t apply the “senior” label!
• Tailor to senior’s individual needs. Business that have been successful offer highly customized products and services
• Bring creativity with a sense of security and contribute to forming a community on their behalf
Concluding Remarks by Dean Paul Danos of the Tuck School of Business at Dartmouth
The breadth of knowledge that was brought to the conference can have profound effects on how we as business leaders go out and impact the healthcare space. We’re looking forward to next year’s conference on Energy and the Environment, hosted by Tuck!
By Alexis Kheir , The Tuck School of Business at Dartmouth