It’s the start of another day for an ordinary Tokyo salaryman. On a rain-drenched Monday morning, the engineer stows his plastic umbrella in the entryway of one of the many vast office buildings in the suburban metropolis that stretches between here and Yokohama. The umbrella locks into place and the engineer’s phone beeps.
He straps a mask over his face, as everyone who enters the building must, and heads straight to the smoking room on the third floor, thinking about how much his habit is costing him before heading into the fug. He opens his smartphone and scrolls through the company app to decide what he is going to do at work today. There are plenty of options on the menu:
Translate 52-page legal document: 5mn Will
Test semiconductor grinding tool: 2mn Will
Join hiring interviews for graduates: 200,000 Will
Process invoices: 80,000 Will
Deliver technical training seminar at factory: 1.5mn Will
The engineer clicks “bid” on “Translate 52-page legal document”. The amount of Will on offer for the task is too big to turn down. Once the cigarette has burnt out, he heads up to the general administration department. On entering, he glances down. A knee-high soft-toy horse has been plonked inside the door. It serves as a reminder that his team is the worst performing and the biggest drain on the business of the precision tools maker. A cartoon tear drops out of one of its eyes.
“Ohayo gozaimasu,” the engineer says, greeting his team manager, who stopped instructing anyone to do any work 14 years ago. She asks him if he can organise the end of year work party, offering him 15,000 Will for the task. The engineer turns down the measly offer and books a meeting room for a briefing with lawyers about his translation. He checks his app again and lets out a sigh. His Will balance has dropped into negative territory, down from 50,000 when he last looked at it, during rush hour on the train. Hanging up his umbrella, using the smoking room and booking a meeting have all cost him Will this morning.
This is not a scene from a science-fiction story, but a typical start to an ordinary day for any one of the nearly 7,000 employees at Disco Corp, an 87-year-old, $20.8bn corporation that makes about three-quarters of all the machines used to cut, grind and dice semiconductors around the world. The engineer’s morning is an imagined scene based on conversations with current and former Disco employees about their daily experiences at work.
Disco is a business unlike any other. Since 2011, it has conducted a radical experiment to operate a blue-chip company on purely free-market principles. Nobody has a boss. Superiors cannot tell juniors what to do. Each day, employees choose whatever tasks they want. They can quit or join a different team at their own volition.
Within this state of perfect freedom, most of their decisions will be guided by Will, as Disco’s internal currency is known. Employees earn Will by doing tasks. They barter and compete at auction with their colleagues for the right to do those tasks. They are fined Will for actions that might cost the company, or compromise their productivity. Their Will balance determines the size of their bonus paid every three months.
The Will system, as it functions today, is the brainchild of Disco’s chief executive, 59-year-old Kazuma Sekiya, who sees his unorthodox management plan as fundamental to the company’s culture and success. Business performance, employee satisfaction levels and market share have all been boosted by the introduction of the Will accounting system, Sekiya says. Since its introduction in 2011, Disco reckons that more than 1,000 employees have not known anything but Will for their entire working career. Over that time, the system has become more sophisticated. The app has undergone more than 100 version updates. Faith in Will only seems to grow.
Other national champions have begun to take notice. Representatives from Sony, Toyota and Panasonic have visited Disco to learn about Will, and HR managers come away talking about how unique and special the system is. Yet, so far, no one has tried anything similar. Sekiya thinks that is because his rivals are afraid of challenging the status quo. “Nobody wants to be Gorbachev,” he says. “He changed the Soviet Union system from socialism to the free market economy, but the change created Putin.”
Still, in his eyes, Will is something far less radical than a social revolution. “I just brought the economic system from the real world into the internal company,” he says. “It works.”
Kazuma Sekiya is wearing a navy jacket embossed with “Disco Corporation” on the upper left breast. It matches those worn by the two employees who sit next to him, and shows him for the company man he is. An engineer and technologist at heart, a man with an eye for precision, detail and minutiae, the CEO still retains the title of general manager of the engineering R&D division.
Sekiya, who has spiky hair and a twinkle in his eye, is open, unabashed and fluent in his own political theory. Even through his mask, his smiles are warm. He is a good listener. His door, he says, is open to even the most junior Disco employees, as long as they are willing to pay 165,000 Will for 30 minutes of face time with the top boss.
Sekiya first proposed his bold idea to his head of management accounting Toshio Naito in 2008. Disco was already using a Will accounting system at the departmental level, but Sekiya wanted each individual in the company to be able to earn his or her own Will. “If you’re in high school and the teacher says, ‘This is the class’s average grade,’ then you don’t care. If they say, ‘This is your grade,’ then you care,” he says.
Naito was sceptical. He predicted revolt among the employees. Selfish cheaters would game the system. Inequality would run wild. The idea went dormant. Three years later, Sekiya tried again. In a meeting that lasted no longer than 30 minutes, Naito relented. “I’m a salaryman and if the president says I should do something for three years, then I should do it,” he told Sekiya.
Without seeking board approval for the experiment, Sekiya and Naito called the head of the “application department”. A group of some 70 technicians who help customers test Disco’s cutting and grinding machines, it was the perfect sandbox to see if the Will system worked. The trial used Will Accounting Slips, small pieces of paper that felt like payslips in the hands of recipients. A dedicated accounting team would gather slips from a postbox and punch them into an Excel file. After a few weeks of testing the system, profit margins were improving and the application department head gave Sekiya glowing feedback. “This will work. Trust me,” he said.
A few months on, after developing an internal IT system to track the ebb and flow of Will around the corporate economy, Sekiya sent a company-wide email that made managers’ jaws drop. It read: “Bosses cannot order their employees around. You must pay staff with Will to do anything.”
The Will system works like this. Sales of Disco’s machines generate Will. For each ¥1bn (£5.2mn) of revenue Disco accrues, approximately 400mn Will is typically generated for the sales staff to channel down through the company. They use that Will to reward or incentivise other employees to do tasks that support them. For example, they might pay Will to the manufacturing team to produce new machines for them to sell, pass on a stream of royalties in Will to the research team, or offer a tributary gift to their colleagues in HR for paying their salaries (in yen).
Further down the food chain, the exchange of Will can be negotiated informally between employees in return for other tasks, paid for upfront, after completion or however the two parties agree is best. Disco also has an auction system for tasks, which works by dynamic pricing. The fewer people able or willing to do a task, the more Will has to be offered. If someone is desperate to do a certain job, or learn skills from a particular virtuoso, they might offer to pay Will for the privilege.
Disco now has a team of eight employees who manage the Will system. They oversee a framework of 772 penalty and 337 reward items. About 187 of these payments and rewards are used regularly. The purchasing department fines people who write the wrong address on letters and packages, for example. The communications team has Will subtracted for negative articles that are published about the company.
For Disco employees, Will dictates almost everything they do. Each member of staff starts the month with a negative Will balance, which they must strive to get above zero — an “existence cost”, so to speak. The system assumes employees are an inherent drag on the company until they prove otherwise. And the more senior you get at Disco, the greater your cost to the company is assumed to be. A mid-ranking employee’s existence cost is 10,400 Will per hour — a typical task might earn them 50,000 Will. Sekiya’s is 26,600 Will per day.
New starters might expect to get a few million Will in the account as a helpful cushion while they get used to the system. In fact, graduate trainees must generate 20mn Will themselves, by testing and optimising the machines for customers, before they can graduate from the “Application University”.
Corporate history is littered with experiments to revolutionise management away from the top-down decision-making of Apple or the traditional hierarchy of the automobile manufacturer Ford and the trading company Mitsubishi. Many such attempts have centred around encouraging greater self-organisation and autonomy for teams and individuals, be it Linux’s open-sourced operating system, Spotify’s self-organising “squads”, or the online retailer Zappo’s more radical “holacracy” philosophy of decentralised decision-making. Disco tried out a version of holacracy before Will was introduced. It used the ceramics and electronics manufacturer Kyocera’s “amoeba” management system, which divides the organisation into smaller autonomous groups whose leaders set their own management philosophy and goals.
Disco Corp is headquartered in the southern Tokyo suburb of Omori. Its blocky 1980s pinkish-grey office fits right into this retro neighbourhood. But on stepping inside the sanitised charcoal entrance of the nine-storey building, the ambience suddenly becomes almost futuristic. The lobby betrays the high standards Disco demands. This is a world with its own rules. Visitors must sanitise their hands and wear a mask for the entirety of their visit. Upstairs, the buzz is tangible, like an early-stage start-up. Staff are engaged. They jump up to look at each others’ screens and bombard their co-workers with bright ideas.
Sekiya comes from a bloodline of disrupters. His grandfather Mitsuo Sekiya moved back to Hiroshima prefecture in 1937, after finding no joy in the technocratic work of governing the puppet state of Manchuria. He founded what would become Disco in the city of Kure, where blade and wheel manufacturers were gathering to serve Imperial Japan’s sprawling naval shipyard.
Mitsuo arrived too late, however. Orders were disappointing so he moved to Tokyo to find new markets, leaving his brother Kazu in charge of the Kure factory. In 1941, he bought a specialist manufacturer of grinding wheels for precision cutting, and through the 1950s his machines were used to cut the tips of fountain pens. As business boomed, Disco strove to make thinner and thinner blades. Its precision dicing technology was used to cut moon rocks brought back to Earth by the Apollo 11 mission. From the 1960s onwards, the company became a crucial cog in the supply chain for semiconductors, now a foundational building block of the world’s computers, mobile phones and televisions.
When the dotcom bubble burst in the early 2000s, Disco felt the pain of slumping semiconductor demand. Mitsuo’s grandson Kazuma spotted two internal problems. The first was that nobody seemed to care enough about the financial performance of each department. The second was that when Disco sold its cutting machines to customers, they offered test cuts free of charge. Sekiya worried that Disco’s sales staff were making losses by doing multiple cuts for customers who bought only a single machine, instead of focusing on those that might buy hundreds. “It’s like a car dealer allowing a lot of test driving without anyone buying,” he said.
Will, he thought, could provide a natural solution. By putting the company’s sales staff at the head of the chain for earning and distributing the internal currency, he could incentivise them to make more sales.
At first, Will worked mostly as a monthly name-and-shame system, according to former employees. Departments with internal-facing functions, such as human resources and public relations, were shamed persistently for being in the red. To this day, the team with the lowest Will balance still has to deal with the embarrassment of having the weeping toy horse sit with them. But, more recently, Will has become a way to earn big pools of virtual currency and then cash it in for yen. A selection tool for a certain breed of employee, it weeds out those who don’t pay to play.
Will determines about 40 per cent of employees’ bonus, which can boost earnings significantly. In 2023, one 41-year-old staff member earned more than ¥59mn by clocking up Will. Another employee currently managing the Will system cited his fascination with the internal currency as the reason he joined the company in the first place.
Naito, who now runs Disco’s Will Management Office, has become a Will evangelist. “If you get annoyed, then Disco might not be the company for you,” he says. “I once got fined 10,000,000 Will for a file-naming error. At that point, I really disliked Will . . . But the next day I thought it was a sign from God that I need to earn and save more Will.”
Sekiya is Will’s central banker. The creation of new Will does not simply come via sales of cutting machines. Sekiya also has the right to issue new Will to create a limitless internal budget. Although he must tread carefully to avoid devaluing Will too much, he can create currency under so-called special projects. Approximately half the Will in circulation in the company is generated from these special diktats.
Hiroshi Ono, a professor at Hitotsubashi Business School, undertook a 2019 study of Will as part of a paper about boosting productivity through reforming work styles in Japan. He calls Will “an interesting way of making employees realise time is money, and you just sitting there is costing the company money”. Ono says that controlling the supply of money helps Sekiya stay out of “micromanaging”. But seen another way, Sekiya has free rein to incentivise, or manipulate, his employees towards certain behaviours without going through layers of middle managers.
Is Sekiya more powerful than most CEOs? He admits so. But after a pause, he adds only “in some ways”. He casts himself as both a visionary steward and a benevolent autocrat. The free hand of the economy will partly protect Disco in the future, he believes, from his own misjudgment or the consequences of any misguided CEO that could follow him.
The extent of Sekiya’s power is central to the question of whether Will is really a currency or something more akin to China’s social credit score, an accounting system designed to control people’s behaviour and quantify an individual’s trustworthiness. Will took its name after the Gil currency in the Final Fantasy role-playing video games. Sekiya says he wanted his workers to be motivated in the same way gamers are to level up and keep playing. Its success may lie in keeping the virtual headset firmly over employees’ eyes. After a while, they become unable to see Will for what it is: a game in which many of the rules are set by Sekiya.
Several former employees said Sekiya was in the habit of changing those rules to fit his goals when the “free” internal economy he created deviated from the outcomes he wanted. “His position as the bureaucratic head of the company, as well as judge and arbiter of the economy that rules and guides all incentives of company behaviour, is an interesting duality that could lead to potential autocratic proclivities,” said one. Another put it more bluntly: “It was chaos . . . The president would come up with new rules to direct things. It was always a game of cat and mouse.”
Sekiya doesn’t like his picture appearing in news articles. Despite his fascination with contrasting leadership styles, from the US’s executive presidency to North Korea’s dictatorship, Sekiya says the Will project is not about him: he wants to recruit top talent to Disco. The bigger his picture appears in this article, therefore, the more Will gets deducted from members of the communications department.
But he insists the system is more than just a game. He splits human motivation between two types: internal and external. It’s the difference between something you want to do versus something you feel obliged to do. When you start dating, you want to go for dinner. When you’re married, you have to, says Sekiya. “If the job is all motivated by internal motivation, then that organisation becomes super strong. Money has a magic power to translate external motivation to internal motivation,” he says.
He accepts that the comparison to China’s social credit system is a fair one. But in Will’s defence, he says, the system is built mostly on trust rather than top-down surveillance. If someone disputes a payment, or does a shoddy job, they will not be commissioned again. Will functions within what Ono, the Hitotsubashi professor, calls a “village community”.
That’s where the comparison between Will and the real world economy begins to break down. Currency and price discovery mechanisms in real life smooth transactions between people who don’t know each other. Within Disco, Will has an implicit link to trust and relationships. You may underbid yourself to cultivate a relationship with a talented engineer, and the lowest bidder may not be the default choice for a task if they are not trusted. Trusted relationships may block the freedom to maximise earnings.
More fundamentally, the structure of a company does not lend itself to the free market. The human resources department monopolises recruitment and administering payroll. There is nowhere to turn if the price isn’t right. “There are built-in monopolies in the company,” said a former Disco employee. “The HR department will bill you a ridiculous amount as there’s no secondary choice. There’s a bunch of monopolies rotating around a fixed amount of money.”
By design, Will is not a transferable asset and it does not allow for the kind of savings, loans and capital formation that would define a true currency system. It can’t be spent outside Disco. As one former employee put it, Sekiya is making all employees constantly “paddle upstream”.
“No one uses Will anywhere else. It doesn’t exist outside the company. That means, to put it simply, that it’s not a currency. It’s just a spreadsheet where they decided to give the numbers a different name. And what is really at the bottom is yen,” said Tony Yates, an economist and former central banker. “At the end of the day, [it] just determines how much [employees] get paid in a currency that everyone else uses.”
One former employee with a legal background attempted to get fast-tracked out of the Application University and into a legal department without working for months on factory floors. “I realised there was no route to joining the team I wanted to join without spending four years doing things I wasn’t interested in,” they said. “I felt quite frustrated how they presented themselves as being so flexible and progressive, but in every direction I ran into walls . . . like I was playing in a sandbox with the toys they gave me, but the sandbox was too small.”
Over the past decade and a half, Disco has produced a generation of thoroughbred capitalists. For those who have been on the inside, the sense that every action is interpreted in terms of monetary value runs deep. Some staff have been inspired to start their own internal currency systems at home to keep their children in check. “What are the merits for me of doing an interview with you, if it’s for free?” asked one former employee when approached to talk for this story.
When it came to Covid-19 and homeworking policies, Disco’s uncompromising stance was polarising. Sekiya firmly believes in the value of in-person working. Employees working from home are “inefficient” and become distracted, he says. The amount of Will an employee must pay to work remotely is designed to be punishing. When the pandemic was at its peak, the fee-payers helped to subsidise the bonuses of factory floor heroes, who kept the cutting and grinding machines flying off the production lines as global electronics demand surged.
Disco deliberately puts no cap on overtime beyond what is legally required. The theory is that Will encourages efficient behaviour by penalising superfluous activities. The company puts a disclaimer on its recruitment pages that it is not a suitable workplace for people who want to prioritise their private lives. Despite overtime hours falling 9 per cent since 2015, it cites an average of 42.8 hours of overtime per month versus an average of 15 hours for other Japanese manufacturers.
For Kate Hoch, who worked as a Disco field engineer in Oregon between 2014 and 2017, the demands became too much. She quit after being asked to handle 24/7 service contracts for Intel. “We didn’t have enough people to cover them. I had three or four cellphones, as I was on call for different machines 24/7.” For her, Will was just “another thing that’s going to add work to our work”.
One big risk for an internal currency is that it can misattribute the value of activities without a clear or immediate return. Will primarily rewards activities that generate sales here and now. Yet many essential tasks within a business might generate little by way of clear monetary value. Staff working on the next-generation machines rather than those being sold today, for example, make no revenues — and therefore little Will — unless Sekiya has corrected for market failure through a special project. One software engineer left Disco because the Will system did not fully reward their activities, which were not big sellers but important to customers. Their full-time job effectively morphed into a mission to have managers recognise their contribution by creating new items in the Will app. In that person’s view, Will was making Disco short-termist and complacent.
“Six-month current account thinking really incentivises short-term behaviour and really hurts the company’s long term prospects. Will may have incentivised people to make the current machine rather than the one that helps them stay in front,” the person said.
Back in Disco’s office, near the Oi Racecourse and Heiwajima Boat Racing course, lies another gambling mecca known internally as the “Coliseum”. Occupying the eighth floor of the building, the room comprises a “red corner” on one side and a “blue corner” at the other, in front of rows of tables with about 90 seats. Every Friday, employees pitch ideas in 60 seconds to improve ways of working, competing against a rival pitch by another department. Presenters are only allowed one PowerPoint slide. Will plays a central role in this contest, as viewers vote for the winner using the currency. The side that accumulates the most Will wins, has their suggestion implemented and pockets the currency. Those who bet on the winning horse also receive a dividend of Will based on the money bet on the loser.
Rather like Toyota’s Kaizen system of continuous improvement, the Coliseum forms part of Disco’s so-called Performance Innovation Management system. In one year, about 4,800 Will contests take place. Sitting in is Sekiya. He almost never misses a session. He asks probing questions and delivers frank views to those he knows well, former attendees say. Like Caesar, Sekiya’s vote in the Coliseum is pivotal, and as the Romans were fed bread and circuses, Disco employees are placated by yen bonuses and the rat race for Will.
The machine relentlessly grinds out productivity improvements. For the benefit of the salaryman in the smoking room, HR struck upon one winning idea in the Coliseum. Staff noticed that smokers’ breaks were taking longer, and prepared a series of five one-minute videos that would be played to make them aware of the passing of time. When that didn’t make a difference, they proposed turning the background of each video a different colour to make the sense of time passing clearer. Smoking breaks didn’t run over any more.
Harry Dempsey and David Keohane are FT Tokyo correspondents
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