How Sigma Creates World-Class Lenses | Inside the Vision of Sigma’s Legendary CEO Kazuto Yamaki

At the time he was just working for a small optics company in Tokyo, right? But this company had bankrupted and then the suppliers of that company asked my father to start business. He had no intention to be an entrepreneur. So most of the companies offshored the manufacturing site from Japan to other countries like China, Taiwan, Malaysia.

But we didn't do that. As a CEO of the company, I make decisions every day. If I prioritize the profit, profit, money, money, money, I may have made many different decisions.

May I ask you a question, please? When did you decide yourself to take over your father's business?

It may not be enough for AI to make good work. Professional managers, MBA holders, they always prioritize money and destroy the corporate culture and the legacy.

India — very exciting, right, and interesting. And I'm truly enjoying this thing in India.

First of all, he founded Sigma in 1961. At the time he was just working for a small optics company in Tokyo. But this company bankrupted one day. Although he was just a 27-year-old young employee, because it's a small company, he was working as one of the corporate executives. So he had to close down the office, and then the suppliers of that company asked my father to start a business. He had no intention to be an entrepreneur — he had no intention to become the CEO or president. He just started business to help the supplier at that time. Sigma means a summation, right? So it means a lot to me — the summation of our experience, wisdom, knowledge, or people's power. But I guess he named Sigma because it's a summation of the supplier's power.

So going back to your question, he started without any ambition. But since then he felt a lot of responsibility for the business partners, customers, and society. And he's been working so hard. To be honest, when I was young, we had some conflicts as to the corporate policy or management style. But today I really think I'm quite influenced by him. He's a mentor of myself.

He was not a very vocal person at home. He was at the company, but at home he was quite quiet. First of all, even when I was a small kid, like five or six years old, he always told me to take over the business. And at the same time he told me I had quite a big responsibility for employees and business partners. If the company bankrupts, they lose their job. At that time we had about 100 employees. So he told me: assuming each employee has a family — let's say four family members — that's 400 families. So I have about 400 people's lives, this weighs on my shoulder. And of course we had several suppliers who mainly work for Sigma. So he told me I have over a thousand people's life responsibility on my shoulder. Which was quite a big pressure. But he always talked about the responsibility as a company owner and president. He worked really hard — he never stopped working, even on weekends, Saturday and Sunday. So he influenced me in many ways.

As a typical young Japanese boy, baseball was quite big in Japan, and I really liked playing baseball. He was quite busy, but normally on Sunday afternoon before dinner, he had some time for us kids. And I sometimes — do you know catch ball?

Yeah, I played catch with him. It was a nice memory with him.

This year, actually.

The answer is yes and no. First of all, Sigma was founded in 1961. We were one of the newest lens manufacturers at that time. There were already many lens manufacturers in Japan because the optics business was booming. So in order to survive, Sigma always offered very unique products which major companies never made. And also we tried to offer products at the lowest price possible. We'd been doing relatively okay until the mid-'80s. But in 1985 there was an agreement between the major economic countries — US, Germany, European countries and Japan — called the Plaza Agreement. After the agreement, to minimize the US trade deficit, we agreed to depreciate the US dollar intentionally, which led to the appreciation of the Japanese yen. Until the mid-'80s it made every sense to make everything in Japan because labor cost was cheap. But since then the Japanese yen kept getting higher and higher, and Japan became an expensive country. So most companies offshored manufacturing to China, Taiwan, Malaysia, Vietnam, Thailand. But we didn't do that, because Sigma was a private family-owned company, and still today we are.

Of course turnover and profit are very important, but as CEO, it's very important for me to make sure everyone — employees, suppliers, business partners — are doing okay. If we offshore to other countries, companies normally prioritize investment in those new factories, and the old factories in Japan lose advantages. Sometimes they lay off people or close factories. Which we didn't want to do. So we decided to stay in Japan while it's becoming a difficult country to produce things. In order to survive while keeping our factory in Japan, we have to become a more premium brand and provide higher-value products. So it's a long story, but to answer your question, it was a long-term vision for Sigma — both my father and I share it — to become a more premium brand.

In order to become a premium brand, product quality is very important. We've been working very hard to make the best product. But also, after my father passed away, I believed we had to do something even more. We have to be the best brand. So while product quality is still the most important, I went beyond that — changing the visual identity, logo, rebranding, market communication. That's the story behind it.

Yes, quality control and innovative product development is the key. Lenses and cameras belong to so-called integral technology. This technology requires very close communication and collaboration between engineers and factory workers. When it comes to other industries like PCs, they have very clear standards. As long as you follow the standard, you can make products — USB or HDMI. You don't need engineers to work closely because the standard is clear. But camera lenses — we have to be close, and the accumulation of experience is very important. We may be able to make decent quality products outside Japan, but if we make the best quality product and keep the most efficient workflow, keeping everything in Japan has significant advantages.

The basic process is quite similar to other companies. We first make a road map — normally it takes two to three years to develop one lens or camera. We create the concept for each product, then give it to engineers who try to realize those concepts. But what is unique about Sigma is that I don't have my own office. Our building has four floors — first floor has meeting rooms, engineers work on the second and third floors, and management and administration are on the fourth floor. I have my own desk on the second and third floors. So I always work with engineers and have daily casual chats with them. Every day I talk to them — hey, could you make this kind of product? Could you make this kind of lens? Normally the engineers laugh at me: oh, it's impossible, it's a crazy idea. But during these casual chats we form a clearer idea about the product. Then we move to the meeting room for regular product planning meetings, maybe once a month or once every two months, and describe the concept of each product.

Even after that it doesn't go smoothly. There are many challenges to realize it. Every time engineers encounter issues, I always talk to them and we go back to the concept. Sometimes we change specifications, size, or weight while keeping the concept. What makes Sigma unique is that the top management or decision maker is always with the engineers.

First of all, we believe we are a camera manufacturer, but to be honest, camera is a small part of our business and many people regard us as a lens manufacturer. As a lens manufacturer, I believe we should support as many mounts as possible, regardless of market share. But we have limited engineering resources, so we have to prioritize. Mounts with a large share have priority. And of course we need to agree with the camera body companies, so it also influences our decision-making.

Sony — we are quite independent, so we do not share the product roadmap with Sony. The other companies are the same, right? Because we are independent companies. Each company has their own roadmap and we don't share that.

Yeah. Camera manufacturers have several patents around the mount — like the dimensions of the mount or the location of contact pins. So in order to make lenses for their system, we need to get a license.

From the engineering perspective, of course there are lots of challenges. Engineers are required to make the best quality products, while also making them lightweight, compact, and with minimal cost. So engineering is in a very difficult position. I fully understand because before I became CEO, I was a manager at the civil engineering division — I managed the optical design team, software development team, intellectual property team, and several others. I was also a mechanical engineer at the beginning of my career. During that experience I realized the nature of engineers. The most important thing is to give a very simple goal and mission. If we give too much, they are totally confused. 'Hit the highest quality with minimum production cost, and make it lightweight and compact' — they'll screw up. So I always give a simple mission and priority: 'Please achieve the best of the best quality' — you can use slightly higher cost. Then I consider that's my job. We always try to keep the direction simple, prioritizing only one or two things.

There are many challenges, but if I answer that, there's only one challenge: to make a good team and keep a very good team. If all the employees — engineers, sales team, marketing team — have good teamwork and work with good harmony, in one direction, one goal, then everything can be resolved. That's my belief. Maintaining the best team is the most challenging, but I think most beneficial to grow the company.

We have a philosophy from my father: 'small office, big factory.' He strongly believed the office must be small. Even today we have a very small administration, HR, finance, accounting, marketing, and sales team. And on the other hand, a relatively big engineering team and big factory staff. We always invest in technology and manufacturing. By doing this, we can provide the best quality product at an affordable price. I'm the CEO but I don't even have a secretary. I make my schedule myself. There's one assistant who books flights and hotels, but that's it. We try to make the company very simple.

Even managers — I always ask all managers to become hands-on managers, not managers who sit on the couch and just order things and sign documents. That's not good. I always ask managers to be involved in the work.