Konosuke Matsushita
The tap-water philosophy
Setting the mission at the price
Address at the Matsushita founding anniversary, 1932
He watched a stranger drink from somebody's outdoor tap and go unscolded. The company mission he wrote out of that scene.
What actually happened?
In 1932 Matsushita named the year the first year of knowing the mission. At the founding anniversary he described the scene: a passer-by turns a roadside tap, drinks, and nobody scolds him, because tap water is so plentiful and so cheap that it is nearly free, though it plainly has value. Then the mission: the mission of a manufacturer is to make goods as inexhaustible and as cheap as tap water, and by that route to drive poverty out of the world. It is not a charitable declaration. It is a product strategy with scale, process and distribution all ordered behind one number.
Write the mission as something you can measure
Most missions are adjectives, excellent or leading or people-first, and an adjective can neither be checked nor give an order. This one is a quantity: price against reach. Every quarter you can answer whether you got closer to tap water, so the mission becomes a production schedule rather than wall decoration.
Let more people use it is a slogan. Cut the price of this feature to a tenth within three years is an order that reorganises the supply chain.
Cheap is a capability, not a concession
Making cheapness the mission forces the hard crafts: yield, scale, turnover, distribution efficiency. Every cent of price cut has to be paid for by a real improvement in the cost structure. Cheapness bought by giving up margin is bleeding; cheapness bought by capability is a moat. Short term the statements look alike.
Two firms sell at the same low price. Look at what each spent on tooling and research in the year it cut, and the difference shows up.
Below a threshold the market changes order of magnitude
Under a certain price a product changes species: from something worth considering into something used without thinking, and the market widens from those who can afford it to everyone. The tap-water philosophy is a bet on that phase change, on the far larger market underneath the threshold.
Printing, computing and phone calls all did this. Cut the price by an order of magnitude and both the uses and the users changed kind.
How do I use it today?
Where you are: you are drafting a mission for the product or the company and the page is all adjectives.
Ask first: can this be rewritten as a quantity, a price, a reach or an elapsed time, that we can check every quarter?
Where it goes wrong: making cheapness the end in itself and paying for it out of margin; or using tap water to dismiss every premium position, when luxury has a case of its own.
Lines to keep
The mission of a manufacturer is to overcome poverty and bring society wealth.
Make goods as inexhaustible and as cheap as tap water.
Nobody scolds the passer-by who drinks from a roadside tap.
Same situation, other people are asking
I'm told this is just what it costs. Is it?Costs won't come down and I can't see where to cut first.Every stage in this takes a cut and each one says it is necessary.Every team keeps a buffer and I've stopped asking why.Everyone says it can't be done cheaper · all 5 questions →If this one named what you are going through,
send it to someone who needs it, or keep it somewhere you will find it again.