Dr Kazuo Inamori's Philosophy of Business
What is the secret of success for businesses? When Dr Kazuo Inamori was interviewed by CCTV (China Central Television), he presented a piece of calligraphy that he wrote: 敬天爱人 meaning “Respect the Divine and love People”. Sounds too philosophical? Well, it is. Dr Kazuo Inamori believes that the philosophy of a company is a guiding beacon that will drive the success of a business. Often called the “Saint of Business Management”, he seems to have the magic touch that can turn businesses into a phenomenal success even in industries that he has no knowledge about.
Dr Kazuo Inarmori founded Kyoto Ceramic Co. Ltd. (now Kyocera Corporation) in 1959 with just 8 employees. 10 years later, Kyocera was listed in Japan and developed into a global company. In 1984, Dr Kazuo Inarmori founded DDI (Now KDDI) when Japan’s telecommunication market deregulated. He grew KDDI to be the challenger in the market and was wildly successful. He retired in 1997 but was sought by the Japan government to helm Japan Airline as its Chairman when the country’s national carrier went into bankruptcy protection. He turned around the business and brought it into the black in 3 years. Impressive track records! So, what is the secret behind his success?
1. Back to the fundamentals
Dr Kazuo Inarmori shared:
“In both my professional and personal life, I have struggled with many dead-end situations which caused me endless agony. In those difficult circumstances, I would always go back to the fundamentals and ask myself, "What is the right thing to do as a human being?" Everything I do in my work is based on this fundamental principle. Observing this rule, day in and day out, has brought me amazing results.”
Dr Kazuo Inarmori believes that the mission of a business is to create a better world for the human kind. This guiding principal has been the beacon that guides his decisions, showing him the clarity and the right things to do.
2. Foundation for Success: Employees happiness
Dr Kazuo Inarmori has a strong belief that employees happiness is the foundation of a company’s success.
If we ask any leaders, they will probably say the same thing about their employees. The key is in the execution. When asked to rank the importance of shareholders, customers and employees in CCTV’s interview, he chose employees. To him, without a group of employees who are aligned to the company’s mission, the business will not be sustainable.
In an interview with The Wall Street Journal, Dr Inamori shared the fundamental shift he made when he joined JAL:
“When I first came to JAL, I told executives that we have to state the management’s philosophy and share that with everyone at the company. I also told them we don’t need many statements. One thing we need to say is that the management’s goal is to pursue the happiness of all employees, both physically and mentally…That was what it all came down to. It wasn’t for shareholders, and it wasn’t for executives. It was for all the employees working at the company. We put that at the very beginning of our philosophy statement. ‘This is your company, and it’s goal is to make all of you happy.”
This philosophy is shared by everyone at the company and aligned all to move the company towards a common goal.
3. Amoeba management
Besides working on the fundamentals and focusing on the human aspect of things, one key element of success is the Amoeba management concept introduced by Dr Kazuo Inamori.
Amoeba Management is a management system that encourages all employees to participate in the management. It does this by dividing the organization into small units and demonstrating the results of work of each organization in an easy-to-understand manner. This is based on the concept that all employees are involved in corporate management, not just some of the top management. He also says that “management by all” is the most important factor.
If we look at his concept of Amoeba management, it is again very people centered. It created a business process where each unit is empowered to move things forward. They are accountable and are empowered to optimise the business success. For this to be effective, the pre-requisite is that the employees are aligned and committed to the same vision. Hence, we can understand Dr Kazuo Inamori’s philosophy of focusing on the happiness of the employees. His philosophy creates an environment of trust and a habitat of happiness where the employees will be able to perform and optimise the business outcome that they feel an integral part of.
Dr Kazuo Inamori has demonstrated to us the power of creating a team of aligned, happy employees who can make sustainable growth a reality for businesses. He has relied on this philosophy to create Kyocera, KDDI and turned JAL around. As for choosing his successor, it is not a surprise that he is again focusing on the fundamentals of a person’s character. He spoke of his criteria in choosing the successor: “A person at the top, of course, has to be experienced and knowledgeable about the business. But at the same time, above all else, I think personality and character are important.”
Cutting through all the skillsets that we look for in getting our talent pool, Dr Kazuo Inamori’s focus on the leader’s character and personality is a good reminder for us. The foundation of a sustainable business is back to the team of people running the business. Having the right people on board with shared leadership will undoubtedly deliver sterling business results.