Wisdom worth spreading! Kazuo Inamori: "Do what is humanly right."

My short introduction:

The typical western Management does not like these kind of ideas. They would maybe even claim that people supporting Inamori SAN′s thinking are socialists. I am far away from being socialist, but Inamori SAN′s leadership principles, which we also see in the Toyota Way and with other successful companies seem to be creating much more successful, reliable, sustainable, resilient organizations, while the typical western style short term thinking approaches generate (at best) a few financially successful years, but these organizations go up and down like a ship in stormy waters. In many cases we observe one ineffective turnaround followed by the next one.

I used google translate for big parts of the translation, so please excuse if some aspects may sound a bit strange.

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The interview with Kazuo Inamori was done by Martin Fritz from the German newspaper “Wirtschaftswoche” about 4 years ago.

Silent Guru; in 1959 Inamori founded Kyoto Ceramic, today he is a billionaire, philanthropist and priest. Picture by Ko Sasaki for Wirtschaftswoche

Kazuo Inamori, the founder of Kyocera, is Japan's most influential manager. He appeals to managers to focus on the workforce. In the interview, he explains how he deals with his employees.

Kazuo Inamori swears by wisdom that irritates Western thinking: It is not the shareholders that count, but the employees. "If you want eggs, you have to take care of the hens," Inamori told the US magazine Bloomberg a few months ago. "Harassing or killing the hen won't work."

His successful foundations Kyocera (1959) and KDDI (1984) as well as the reorganization of Japan Airlines (2010) prove the 84-year-old right. On the one hand, he is a profit-oriented capitalist: Every team in the group should act and calculate independently like an amoeba so that there is an atmosphere like that of a start-up. And every employee should act like a manager, maximize income and minimize expenses.

On the other hand, Inamori, a Buddhist Zen priest since 1997, wants to tame capitalism with altruism and family spirit. His maxim: "Do what is humanly right."

The 12 Management principles by Inamori SAN:

1 Formulate the purpose and task of your business. Set high goals that are honorable, just, and fair.

2 Set specific goals. As soon as they are determined, share them with all employees.

3 Keep your passion. The desire must be strong and persistent for it to penetrate the subconscious.

4 Make an effort more than anyone else. Work steadily and diligently, step by step, even with tiring tasks.

5 Maximize revenue and minimize expenses. Don't chase the profit, but let it follow your efforts.

6 Pricing is management and top management responsibility: Finding the point where customers are happy and the company is most profitable.

7 Success is determined by the willpower. Managing the business requires permanent walking the extra mile.

8 Have a fighting spirit. Management requires more fighting spirit than any martial arts.

9 Take on any challenge with courage. Be fair and never cheat others.

10 Always be creative in your work. Renew and improve continuously. Today should be better than yesterday and tomorrow better than today.

11 Business is based on partnership and must make everyone happy.

12 Always be cheerful and positive, keep big dreams and hopes in the purity of your heart.

At Kyocera, every employee still pulls out a small book bound in blue plastic with Inamoris management teaching at every morning meeting. The 80-page work should serve personal growth, for example with statements about the social importance of work and the right way of life. Many choose a teaching sentence and put it behind their name badge with the company ID to constantly remember the thought. What advises Japan's most famous manager.

Q: The motto of your management philosophy is "respect the divine and love people". When was the last time you thought about your motto?

A: Kazuo Inamori: I am now 84 years old, retired and reading a lot. I go to my office at Kyocera a few times a week and meet the management. Every time I ask myself how we should be as human beings. One lesson is that we should be humble and never arrogant. The risk of becoming arrogant increases with age. So I control myself strictly and wonder if I'm humble enough.

Q: You became a Buddhist priest after the founding and management life. How necessary is knowledge of Buddhism to understand your ideas?

A: You don't have to know Buddhism. I was certainly influenced by this, but in short, you return to the same question: what is the right thing that I as a person have to do? But not as Kazuo Inamori, not even as a Japanese, but as a person who lives on this planet. That is the constant theme. This question of being human is at the foundation of my life.

Q: You founded Kyocera in the late 1950s. Have the demands on managers changed since then?

A: No not at all. For managers and business leaders, integrity is still the most important thing. 

Q: Which other characteristic within your twelve management rules do you think is particularly important?

A: In every human being, the ego and an altruistic self-compete with each other. In the depths of our hearts we follow selfish goals. At the same time, we are happy when other people can be happy. If we don't control ourselves, our ego grows and we do things that benefit ourselves. But there is also this other factor that we care about others. So I try to get my motivation based on altruistic thinking. 

Q: And how do you do that?

A: I have to check daily how I lived and whether my ego displaces my altruism. If this was the case, then I have to try to improve the next day. If I do this self-reflection every day, I can correct the direction of my thoughts. No meditation or notes are required for this. A little distance from yourself is enough to notice this change. That is my belief. 

Q: In which companies do you still see this spirit at work today?

A: I don't know a lot about today's companies. But I was very impressed with IBM and learned a lot from the thoughts and methods of Thomas J. Watson (IBM chairman from 1914 until his death in 1956). The problem is that good management thoughts fade over the generations, so the company's performance deteriorates or scandals occur. Volkswagen, for example, was considered a great German company, but the fame was now suddenly reduced, probably because good ideas were watered down over the years.

Q: Perhaps managers are also under greater pressure in our hyperactive times. Globalization has intensified competition considerably. How is it still possible that there is a “heart connection” between employer and employee, as you request?

A: Today's managers say they want to add value to shareholders. But who is making the effort for this purpose? These are the workers and employees of the company who work hard with good will. Then the company can do better. Even if the purpose is to increase goodwill, we should cherish the employees as the center of the company. To this day, I am convinced.

Q:But how can we get managers to behave differently?

A: It could be difficult to convince western managers. The western world has its own culture and habit: A capable person who generates good results should get a high reward there. In Japan, there is still general opposition to paying a capable person extra high.

Q: The problem is that manager salaries depend on company profits. Therefore, they increase the profit in the short term to increase their own bonus.

A: There are only good numbers if, under the leadership of a manager, all people work in the same direction. This means that the fruits of the effort should not only go to the leadership. In football, very high salaries are paid because individual players attract people and thereby increase income. But in a company, engineers, technicians and marketing people all contribute to success. That's why I'm only for the company leaders against high bonuses.

Kazuro Imanori: “Social thinking is universal”

Q: How can you reconcile your management ideas and the demand for more earnings for the shareholders?

A: Shareholders expect a certain return on holding the shares. With this expectation they buy the papers. The company won't fully meet their expectations, but it should make every effort to pay as much as possible.

Q: To what extent should managers think about increasing earnings for shareholders?

A: This is a very difficult question for management. If it is an excellent company and enough profit is made, the earnings after deducting taxes and reserves should be shared with shareholders. But group leaders shouldn't work for shareholders, but strive to make all of their employees happy, both materially and intellectually.

Q: Companies like Apple and Amazon like to save taxes creatively. In your thinking, a company should pay taxes as a contribution to society. How do you see this contradiction?

A: I find it strange to use every means to pay as little tax as possible and to find loopholes with a lot of wisdom and ingenuity, even if this is seen as a competence of managers in Western countries.

Q: How do you explain this development?

A: I don't know much about Western history, but at the origin of capitalism were Protestants with noble thoughts and deep religious beliefs that one can be rewarded for one's efforts without being criticized. Today's capitalism is losing this original foundation. It is too focused on egoistic motives. Hopefully the time has come for people to remember the origin.

Q: One explanation for this extreme capitalism is that there is no longer an ideological counter model.

A: Yes, the disappearance of socialism has had a profound impact on capitalism. In my opinion, socialism is not a false ideology. The dictatorship of the proletariat in the Soviet Union was not socialism. I believe that today's capitalism should integrate socialist thinking.

Q: When you read your books, you might think you want to combine socialism with profit. So are your ideas socialist?

A: It can be. My thinking is colored from a socialist point of view. I have also always been a friend of parties influenced by socialist thinking while the ruling party in Japan praises capitalism.

Q: Where does this socialist influence come from?

A: In my case probably from Buddhism. But there is no difference to Christianity. What Jesus wanted to say is nothing other than what Godhama Buddha wanted to say. This social thinking is universal.

Q: On the other hand, you invented amoeba management. A company is divided into small profit centers (amoebas). Every employee should think like an entrepreneur. Such startup thinking is only possible shortly after the foundation.

A: When I was young, I thought a lot about leadership. It is like the great trek to the west when America was founded. A leader must have a strong vision so that everyone can mobilize their energy for the common goal. It's the same with the startup company. Employees who later join this company should also get the impression that they have made a good decision. This type of leadership with a big goal is very important. Many people are satisfied with what they have achieved. But then these wagon trains would never have reached California. And the leader has to train the next generation.

Kazuo Inamori: “The goal should be clear”

Q: There are not many of these types of leaders in the world, which is a problem for successful companies.

A: There are excellent successors! We just have to find them, and if they are still immature, we still have to train them. At Kyocera, for example, I have already identified such a person.

Q: And how did you do it?

A: Of course, this is not easy. It has to be someone who has a clear human vision, is humble and shows passion for achieving his goals. This person must be able to overcome many difficulties and at the same time be thankful for the people around him.

Q: The pragmatic German former chancellor Helmut Schmidt said: Anyone who has visions should go to the doctor.

A: Yes, you have to have a direction in which you want to go. The goal should be clear. Without a goal, everything is nothing. So the vision is a minimum. Materially and spiritually. This goal can be sales and profit figures and at the same time it could be the luck of the employees.

Q: Western managers tend to change their companies frequently and quickly. How long do you have to stay with a company to realize a vision?

A: Those who only stay five years and then move on are only good at management techniques and business tactics. A vision must also include personality, integrity, charm, attractiveness and charisma for other people to follow this person. Skills and techniques are typical of Western managers, but that's not the most important thing.

Q: But if you stick to your vision, you risk burnout. Is this disease a side effect of extreme capitalism or is it due to the individual?

A: Both are correct. On the one hand, abuse by extreme capitalism, on the other hand, personal responsibility. These people probably think that they are forced to work, which causes a lot of stress. That's why I always tell my employees that they should love their work, no matter what work they are given. The difference between the work I am forced to do and the one I love is huge.

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