A Struggle to Find New Corporate Power in Tokyo
Corporate succession meets a new challenge
For nearly a half a century, a puzzle in corporate world persistently makes business people pale for a long time, especially for a large successful and somewhat global enterprise. A success came by chance without making a tough decision during a life-long protective employment. Those workers in corporate ladder, what they call themselves salaried men and women, work around the clock only to find the challenge very difficult to overcome.
How does a corporation continue to please shareholders with strategic vision?
On September 10th, a British liberal newspaper published a story of Starbucks, at which Mr. Howard Schultz, a New York born entrepreneur, led his global third-place providers outside office and home for nearly fifty years. Starbucks opened its first coffee shop in Seattle at public fish market in 1971.
Mr. Schultz, who once and still is one of the most successful business executives in America, considered running for president of the United States. I thought that is the most ambitious and yet considerate opportunity to brew up something deteriorating in America and even in Japan. He might give up this bold move but stepped in three times as a coffee boss in Seattle.
Since its opening the first store in Ginza, Tokyo, and Starbucks spread around the metropolitan Tokyo toward the suburbs into Kanagawa, Chiba, and Saitama. The Kanto plain with those four districts marks 30m habitants, a fourth of 126m declining population in four islands. Starbucks is very popular in Tokyo.
A hook in coffeeshops caught a correspondent by surprise to write a story. Mr. Laxman Narasimhan, an Indian American, left a current job of Reckitt as CEO and joined Starbucks, which stands twice as big as Rickitt in revenues and market capitalization. With twenty-year consulting experience at McKinsey, Mr. Narasimhan laid out “Reinvention” strategy to set the goal to inspire and nurture the human spirit — one person, one cup, and one neighborhood at a time.
A new strategic vision meets three challenges: geographical growth, operational cost-cutting, and unions and wage negotiations. Very few would know what is going to happen to a global coffeeshops in years to come. But a lot of coffee fans know the transfer of the successful business often comes out as a very tough one.
Many Japanese firms struggle with a similar peril of meeting a consistent expectation from non-philanthropic shareholders in Tokyo. In Starbucks coffeeshops in Tokyo, the metropolitan dwellers often talk about a tough corporate succession during an average 40 min stay and chat with a cup in the busy streets in Ginza. I can think of three global firms: Uniqlo, Nidec Corporation, and Nissan.
For the first case, let’s me begin with a fast fashion behemoth, Uniqlo. Mr. Tadashi Yanai aged 73, the richest man in Japan, works at the helm. After 18 years as CEO since 1984, he handed over the power to Mr. Genichi Tamatsuka in 2002. Mr. Tamatsuka resided in as gate keeper less than three years before turning the key back to Mr. Yanai in 2005. The three-year period of new CEO’s kingdom was too short to compare with other ones. In America, the average duration has been seven years, not three.
The second case involves in electronic components. Nidec Corporation has been growing its business through successful M&A. With full skill-sets in corporate mergers with other high precision motor part, Mr. Shigenobu Nagamori (78) has often been quoted as best corporate executives in ranking sheet. In fact, Harvard Business Review selected him as top manager in best 100 executives in the world. The magazine chose only three Japanese bosses including Mr. Son of Softbank and Mr. Uotani, a former president of Coca-Cola Japan.
Mr. Nagamori gave up a transfer to a new CEO in two years.
The third example makes readers with aha, a Japanese automobile manufacturer, Nissan. The automaker handed over its key to the 15th president of its history, Carlos Ghosn in 2000. After 17 years, he got arrested with allegations of under-reporting his salary and gross misuse of company assets. The dismissed boss escaped from Japan and lives in Lebanon with 11 million euros in hiding assets.
It is impossible to create a clone before the succession. But the touch call is always waiting at the ears of CEO. The time is always against the storm. It is probably not enough to possess money, skills, and networks. People around the boss also make a difference to the course of corporate directions, especially in Tokyo.