Net Protections: Fostering Autonomy in Financial IT Services

This blog post is part of 50+ case studies of self-managing organizations we created for the 2024 inaugural ZeroDX awards. These organizations embody the principles of RenDanHeYi in their work structures:

• Zero Distance to customer: Decision what to build is based on insights from the marketplace

• Autonomy: Small teams with full decision-making autonomy enable speed in execution

• Shared Rewards: Everyone in the micro-enterprise participates in its financial success.

Introducing Net Protections

Net Protections is a trailblazer in Japan's Buy Now, Pay Later (BNPL) sector, a rapidly growing market that includes global giants like Affirm, Klarna, and Afterpay. Founded in 2000, the company has played a pivotal role in revolutionizing digital payments and has successfully expanded its services both domestically and internationally.

Going public in December 2021, Net Protections now processes over $3.8 billion in transactions annually, serving millions of users across Japan. With more than 400 employees, the company continuously reinvents not only its financial services but also its organizational structure, making it a standout example of RenDanHeYi principles in the finance industry. Through decentralized decision-making, customer-centric innovation, and a culture emphasizing autonomy and co-creation, Net Protections is redefining what a financial services company can be.

Organizational Structure

For the first 13 years, Net Protections operated under a traditional hierarchy, but as internal challenges grew, the company overhauled its structure in 2013. This transformation began with an inclusive vision-setting process, leading to a new mission: "Create New Standards." Along with this shift, the company introduced seven vision statements and five core values, aligning employees with a shared purpose.

During this period of cultural change, more than half the workforce turned over, leading to a more unified and committed team. In 2018, Net Protections took its transformation further with the introduction of the Natura evaluation system, which completely abolished traditional management roles. Instead of managers, the company introduced "Catalysts"—team members whose role is to facilitate collaboration, provide information, and support team development, rather than exert authority over others.

The Natura System: A Radical Shift in Management

The Natura system is a groundbreaking self-management model designed to:

• Enhance performance through collaboration, not competition.
• Prioritize well-being and psychological safety.
• Encourage autonomy by distributing decision-making power.
  

Instead of a top-down approach, teams are collectively responsible for achieving goals, while Catalysts act as enablers rather than decision-makers. Official roles and department heads exist only for governance purposes, ensuring regulatory compliance while preserving autonomy at every level.

Customer-Centric Innovation

At Net Protections, customer experience is at the core of its operations. The company prioritizes intuitive, flexible payment solutions, ensuring that its BNPL services offer consumers convenience without financial strain.

• Data-driven personalization: Net Protections leverages advanced data analytics to gain insights into customer behavior, continuously optimizing its payment solutions to match evolving needs.
• Continuous feedback loops: Regular customer satisfaction surveys and user feedback mechanisms help refine services, ensuring that Net Protections remains a trusted financial partner.
• Seamless BNPL experience: By focusing on reliability and transparency, the company has positioned itself as a leader in Japan’s BNPL industry, fostering trust among both consumers and merchants.

Organizational Culture

The autonomy at the company is further enhanced by recruiting people who are self-motivated, passionate about self-development, willing to take responsibility, collaborative, and integrity-driven.

One of the most authentic practices at Net Protections is the Working Groups. Since 2012, Net Protections has allowed employees to dedicate 20% of their working hours to projects of their choice. This program fosters autonomy and innovation by allowing members to explore interests beyond their primary roles, covering areas such as recruiting, employee training, and new business planning.

An example of a valuable practice that has emerged via the Working Groups is the "Fami-Tsuku" system, which creates virtual families to mentor new graduates. When a new graduate joins the company, a virtual family with 5 or 6 members is formed to be a mentor. These families meet regularly to build relationships and provide support, fostering a strong sense of community within the company.

Net Protections has also been very intentional when it comes to its compensation mechanism. The new system emphasizes a culture of mutual support and individual development, shifting from a previous focus on fair distribution. Basic salary is determined through competency feedback from a 360-degree evaluation, while bonuses reward output. Salary can increase automatically every six months within fixed ranges or by raising the employee's grade, decided by a company-wide evaluation committee using monthly 1-on-1 reports and feedback from higher grades. This system supports skill development, especially for young employees, allowing for steady growth through automatic increases and significant rewards through grade increases. Full transparency regarding salary ranges for each grade is maintained.

Conclusion

Net Protections’ transformation from a traditional hierarchy to a self-managed, autonomous organization is a powerful example of organizational innovation in the finance sector. By embracing the principles of self-management, customer centricity, and continuous development, the company has redefined what’s possible in Japan’s BNPL industry. With a culture that values collaboration, transparency, and autonomy, Net Protections continues to lead the way—not just in financial technology, but in modern workplace practices that empower employees to thrive.