Boosting Profits By Billing Employees

At Tokyo-based Disco, everything has a price, including meeting rooms and desks.

- Yuji Nakamura and Yuki Furukawa, with Jason Clenfield

Hiroyuki Suzuki couldn’t be happier that his company is charging him and all other employees about $100 an hour to use meeting rooms. “People really cut back on useless meetings,” says Suzuki, 37, who works at chip-equipment maker Disco Corp. and is one of the company’s 5,000 employees taking part in a radical experiment in business management.

At Disco, everything has a price, from office desks and PCs to a spot for your wet umbrella. Teams bill each other for their work, while individuals operate as one-person startups, with daily auctions of work assignments and battles for the best ideas in the aptly named “Colosseum.” Payments are settled in a virtual currency called “Will,” with balances paid in yen at the end of each quarter. “We’ve created a free economic zone, just like what exists outside the company,” says Toshio Naito, who designed the program and has continued to work on it since its implementation in 2011. “Work should be about freedom, not orders.”

The approach has so far paid off. Disco’s operating margin has risen to 26% from 16% since the experiment was implemented eight years ago, and its profitability is the envy of the industry. Its share price has almost quadrupled in that period, to roughly 16,000 yen ($148), giving the company a $5 billion market value. Thanks to bonuses, worker pay is more than double the national average of 4.7 million yen, and in 2017, Disco was the first to win a new government award for creating an ideal workplace.