How to Make Drastic Cuts Creatively with the Hangen Game

Shi Hawthorne, MBA
4 min readNov 13, 2020


Sometimes there’s no way around it. Sometimes the economic conditions make it urgent. Sometimes senior management is simply demanding efficiencies. Whatever the cause, when cuts and layoffs are inevitable, businesses, and the leaders within them, are much better off when they embrace cuts as a moment for creativity and innovation.

In Japan, where monolithic corporations constantly compete with each other for dominance in a tight market, some managers go to extreme lengths to force creative and innovative solutions through drastic cuts. In one company, plant manager Toshio Okuno implemented what he called the “Hangen Game,” where he cut teams by half to break them out of inefficient but previously unquestioned work patterns. While cutting your team by a full half might be overly drastic, especially in the modern world of interlinked knowledge work, there is much to learn from the Hangen Game when trying to draw creative solutions and positive efficiency out of your team.

Hard Times Call for Drastic Creative Measures

Toshio Okuno was the plant manager at a struggling company in the 1970s when he came up with the Hangen Game. When trying to improve performance incrementally to increase profits, Okuno got poor results when cutting only a few members of a team. The remaining workers simply sped up the pace, hurting quality and morale, instead of changing to more efficient work methods.

Okuna turned to drastic measures, cutting teams by a full half to force people to reassess how they worked. He tried to make it like a challenge, or indeed, a Game for the remaining workers, encouraging them to explore far-out ideas and organizational methods to keep the cuts with the same work targets as the original full-size team. With the Hangen Game, Okuna managed to foster a new culture of innovation across production methods and management.

The scarcity and obstacles that Okuna put in the way of his team worked because they forced people to solve problems they didn’t even know were problems until they reexamined them. This process of creativity through scarcity is backed up by research. For instance, a 2011 study from the Journal of Marketing Research showed how unlimited choice doesn’t generally result in the most creative outcomes, whereas restricted choice forced participants in the study to think beyond their first instincts and assumptions.

How to Implement Cuts with the Hangen Game

Trying to implement the Hangen Game, or less drastic measures inspired by it, to draw creativity out of your team doesn’t mean just making cuts. The team needs to have the right work climate for creativity. Cuts may have a dampening effect on morale at first, but by making employees comfortable in the idea that creative discussion and experimentation are essential for their job security, creative and innovative solutions will soon flourish.

To create the right creative and innovative climate for your team, provide clear direction, give the team autonomy to experiment, and reward creative and innovative ideas. Sit down with your team in group sessions and one-on-one meetings to review their jobs and workflow, encouraging them to point out problems they’ve already noticed.

People often already have issues with the way things work. Make it clear that this is the moment for them to speak up. Make it clear that the goal is to break apart the foundations of their work instead of just making marginal improvements.

Remember, not every idea conceived during this process is good. To get the same level of output from your team with fewer people, you may have to let teams experiment with multiple failed models before finding one that works. That is especially important in today’s world of knowledge work, where improvements might not be quite so obvious as on a 1970s production line. But failure is an opportunity to learn what doesn’t work, bringing you and your team closer to what does.

What the Hangen Game Can’t Do

Even in the cutthroat world of Japanese manufacturing, the Hangen Game did not always work as desired. An important component of the Hangen Game for Okuna was adding people back in if, after what seemed like a reasonable amount of time, it was clear that the team would not be able to meet its targets with half the workers. If you were forced to make cuts, this might not be possible, but remember, there are limits to efficiency, especially in jobs that require sometimes esoteric creative and innovative work.

Okuna also found that for small teams, especially four people or under, cutting the team by half was simply too drastic. Communication and coordination in small teams are much easier, so most small teams already work at or close to their potential.

The Hangen Game is not a magic potion that can heal all ills, but what it does show is how scarcity and restriction often work better to force people into creative problem solving than extra support or resources. It’s no wonder the best innovation often comes from upstart companies on shoe-string budgets, but even large companies can foster this environment by keeping the Hangen Game and its lessons in mind.


Cooper, R. (1996). When lean enterprises collide: Competing through confrontation. Boston Mass: Harvard Business School Press.

Originally published at on November 13, 2020.



Shi Hawthorne, MBA

Founder | M&A Advisor | Marketing Enthusiast "Build a better business with a blend of organic and inorganic growth"