Loyalty & Longevity: Adapting Yakuza Rituals to Modern Business

The Yakuza, a 400+-year-old conglomeration of criminal organizations - families - in Japan, have developed elaborate rituals to forge connections, reinforce alliances, and maintain order. As one of the longest-surviving companies in the world, we should examine the Yakuza’s legacy of longevity and loyalty and adapt it to strengthen our modern businesses.

The Finger Shortening Ritual

The ritual of finger shortening allowed disgraced members to re-pledge their loyalty to the family.?

When a Yakuza family member commits a massive mistake, they can apologize by cutting off the top section of one of their fingers, typically the pinky, with a knife. Once amputated, the offender would wrap the bloody finger in a cloth and formally present it to their boss. Yakuza with missing fingers can still be found in Japan, though more families opt for a formal act of apology instead of horrific penance. These apology ceremonies involve the entire family, including the boss, assembling publicly and bowing to the victim of a family member’s mistake.

Modern Adaptations of the Finger Shortening Ritual

Though I’ve never done anything quite so violent, I have repaired partnerships and re-forged client loyalty by proactively paying for my company’s mistakes. Though not causing physical pain, these rituals certainly cause some financial and emotional pain.

These deliberate acts of business contrition should only be made with relationships you want to keep and strengthen. Is the relationship worth the pain?

Furthermore, the act of penance should only happen once per relationship. You only have so many fingers on your hand and dollars in the bank.

Finally, the act needs to be painful enough to matter. A weak act of penance will weaken the relationship. Engineer an act of contrition that exceeds the impact of your screw-up. As the victim of my vendors’ screw-ups over the years, I’ve fired plenty, not for the mistake but for the weak discount, e.g., here’s a 10% off discount code for your next order over $5,000. Weak. Sauce.?

When my company misses a deadline in a bad way, we may process a partial refund of the client’s last payment before we even talk to them. Then, I may step in and handle the project's next phase personally. This approach combines a worker’s pinky finger and a public apology from the boss.

A few notes of caution when adapting rituals of penance in your business. If your company is in a dysfunctional or toxic business relationship, expensive damage will likely continue.?

Here are a few options for managing that.?

Let the relationship die a slow death, e.g., don’t ask for more business, adjust weekly commitments into monthly commitments, or turn off auto-renewal. Or terminate the relationship permanently and frame the financial fallout as the cost of doing business. Or hit the brakes and uncover the why. Perhaps the act of penance can be downgraded to a token, like an upgraded feature or free add-on.

If you work in a high-risk industry, you should also avoid implementing acts of penance. Making expensive mistakes may be an integral part of the game. If a business hires an outside team to help launch a new product category into a new market, they are hiring a professional poker player. The pro gambler's job is to play the game at an expert level, take calculated risks, and walk away at the right time to minimize loss. A lost hand may not indicate weak skill or broken strategy but the literal luck of the draw.

One more counter-argument - acts of penance may weaken your status in current and future relationships.?

You don’t have to run a mega corp like Walmart or Amazon to feel the harmful effects of an anything-goes return policy. Lasting business relationships should be level partnerships, e.g., time/goods/access in exchange for money. In power-driven businesses, giving away the alpha position toxifies the relationship. Your only real option in these scenarios is to make like Charlie (Munger) and make fewer mistakes. Less loyalty-driven and more reputation-centric.

Regardless of your company’s situation, I challenge you to explore when and where a business version of the finger-shortening ritual can strengthen - and lengthen - your most important business relationships.

The Sake-Sharing Ritual

This next Yakuza ritual is certainly less barbaric than finger-shortening but no less impactful.

The Yakuza formally welcomes new members into the family through an elaborate sake-sharing ritual called a sakazuki. These elaborate ceremonies are traditionally used to punctuate and formalize a union - or reunion, be it a marriage, partnership, succession, reconciliation, or adding a new member to the family.

The ceremonial setting is meticulously prepared, transforming an ordinary room into a sanctified space with an altar featuring scrolls representing revered deities like the god of war or the sun goddess. The family adorns the altar with twelve candles symbolizing the zodiac and various offerings, including sake.

A planned, multi-step exchange occurs between the boss and the new initiate or partner during the ceremony. First, a senior family member will pour sake into the boss’ cup. The boss will take a sip, then hand the cup to the initiate, who will drink. Staff will wrap the cup and gift it to the initiate as a tangible token.

Sake sharing has been compared to sharing blood to forge a lifelong, father-son-like bond.

After the formalities end, the now larger family will hit the local bathhouse and party through the night.

Modern Adaptations of the Sake-Sharing Ritual

Let’s examine these pieces of the sake-sharing ritual - shared beverages, deliberate setting, and tangibility.?

Meeting new partners, employees, or clients in a coffee shop or a bar is an accepted business practice. But how can you ritualize beverage sharing?

Prepare a personalized travel mug or pint glass. Don’t be cheap. Preparing something that doesn’t look like leftover pre-Covid convention swag doesn't take much effort.

Select a rare coffee - or perhaps a roast tailored for your company - and have your second prepare it using the pour-over method.

Pour an aged whiskey and serve them in a glass etched with the company and their name.

Stage the ceremony in an exclusive setting, like a speakeasy, a chef’s table, a private rooftop, or even your home.

When conducting a beverage-sharing ceremony in your business, you must prepare to:

1. Spend some real money;
2. Invest your - and senior leadership’s - time in preparing;
3. Enforce attendance and active participation from every notable person in your company.

If the boss no-shows, cellphones interrupt the welcome speech, or the beverage, cup, and presentation feel cheap, you can expect the new member of your family to feel less than welcome or downright uncomfortable.

Be mindful when implementing beverage-sharing rituals. Reserve these ceremonies for rare occasions, like promoting someone to the C-Suite, memorializing a 10th work anniversary, or formalizing a partnership that took years to build. I would avoid ritualizing beverage-sharing with new clients or prospects.?

Properly executed, your business’ version of a sake-sharing ceremony can transcend a typical business meeting, imprinting a deep, meaningful memory for all involved. Sharing a beverage in a reverent ceremony will make it easier to share future struggles in the spirit of loyalty.

The Festival Ritual

Thousands of Yakuza travel to the Asakusa Shrine in Tokyo every May for a three-day festival. The Yakuza members will strip to only their traditional underwear and show off their full-body tattoos. They’ll drink hard, then carry a gigantic shrine - requiring nearly 100 men - through the streets. The Yakuza members will use the shrine as a platform for crowd-surfing.

The Yakuza did not create this festival. They just started showing up year after year. And despite their criminal nature, the locals now welcome the Yakuza as a critical ingredient to their party.

Modern Adaptations of the Festival Ritual

Years ago, one of my clients started attending a massive business tech and security conference festival. They invited top executives for free tacos and beer near the venue. The first events were small and required a ton of marketing. The piggyback party grew into a fixture for conference attendees and a must-attend for the ‘bosses’ of IT security.

Here are a few more ways to transform a business event into a festival with your company as the centerpiece.

1. Go big. The Yakuza don’t go small, and neither should you. Book a bigger room. Hire a celebrity. Fly in your entire crew. It’ll cost you, but few attend, and even fewer remember mediocre business events.
2. Beat the boring - and business - out of it. There’s no faster way to ruin a good time than trying to shoehorn a business objective into it. Workshops, presentations, and networking are vital to many sales and marketing operations. However, they should not be mixed willy-nilly with a festival vibe.
3. Host without performing. Hiring talented performers and hosts costs way less than making a fool out of yourself pretending to be entertaining. A few hundred bucks can go a long way into making your diluted mixer into a 180-proof party.

A footnote: the piggyback party strategy may be ineffective in your vertical. Because most big conference organizers know about side events, they engineer their events to own all the generated attention and relationships. Some organizers will even bake in a non-complete clause into their exhibitor contracts.

Also, creating a festival vibe around an event you produce can take years to build, as noted in the earlier example. Choosing a location, event, or happening with a potentially short shelf-life could obliterate any gains.? You consider producing your own event, preparing to run it at a loss for a few years. The Yakuza survived and thrived for 400+ years due in no small part to their willingness to think in terms of years and decades versus quarters and years.

Finally, if your particular business community doesn’t like to party, don’t force the fun. Producing a golf tournament, hiring a celebrity chef for a business breakfast you are sponsoring, or hosting a mellow mixer on a rented yacht can achieve the same impact.

Conclusion

Whether you need to heal a damaged partnership, forge longer-lasting loyalty with employees, or attract attention, consider ritualizing as a strategy.

Perhaps it is our responsibility as modern business leaders to reward our organizations' longevity and its people's loyalty over quick exits and forgettable experiences.

More Reading on Yakuza & Rituals

Sanja Matsuri (Festival)

Sake Sharing Ceremony

This is What Bonds Yakuza for Life

The Power of Moments, by Chip Heath and Dan Heath