When a chaotic succession crisis unfolded at Apple supplier Nidec, 78-year-old founder Shigenobu Nagamori regretted one thing very much.
Over the past decade he had poached a number of high-profile executives from automaker Nissan and electronics maker Sharp as potential heirs. But none of his underdogs lived up to his high expectations. Instead, they left the company, leaving a disgruntled Nagamori to install one of Nidec’s founding members as interim president last week.
“When Mr. Kazuo Inamori was alive, he told me that a company insider would be best suited to be president. His warning turned out to be true,” Nagamori said, admitting with guilt that he had finally realized how talented his staff were.
Inamori, the renowned founder of ceramics company Kyocera and telecommunications group KDDI, died in Kyoto last month at the age of 90. Known in Japan as the “god of management,” he was one of the country’s great industrialists. Along with Sony’s Akio Morita and Soichiro Honda, founder of the automaker of the same name, Inamori contributed to the country’s post-war economic miracle. He also helped rebuild Japan Airlines from the ashes of bankruptcy in 2010 without receiving a dime for his role as chairman.
Long before stakeholder capitalism and the need to serve employees alongside investors became fashionable in the West, Inamori’s management philosophy centered on his belief that companies should focus on the livelihood and well-being of employees, rather than just making profits .
In his first interview with the Financial Times in 1978, Inamori explained that what united his company and its employees was not simply a financial contract, but “a human relationship” based on trust and partnership.
His motivation, he claimed, had nothing to do with the accumulation of personal wealth. “We have a saying: Money has legs and if you try to catch it, it will run away from you,” he said. At the same time, he was a ruthless cost-cutter who had forced proud JAL employees to cut costs on everything from lunch boxes to company brochures.
Inamori’s teachings were surprisingly simple: don’t be greedy or selfish, be honest and most importantly, do what is right as a human being. Its principles spread beyond Japan to China, attracting 15,000 students worldwide to its leadership schools, including SoftBank founder Masayoshi Son.
How do these teachings work today? In his book A compass to fulfillment, Inamori himself questioned, then quickly dismissed the idea that his philosophy was too outdated for the complex modern world. He argued that a sincere attitude and a focus on the universal good as opposed to national interests was the approach required to resolve international trade and historical disputes.
At a time when nationalism is on the rise in the wake of Covid-19 supply chain disruptions and the energy crisis sparked by the Russian invasion of Ukraine, there are practical lessons to be learned.
One is the need for entrepreneurship at a time when the start-up scene in Japan has been so dormant that the government has promised heavy state investment. Like the Honda founder, Inamori was a warrior and rebel, resisting government and bank interference as he transformed Kyocera and KDDI into global technology companies.
By founding KDDI, Japan’s second largest airline, he brought competition to a market controlled by the former state-owned NTT. When Japanese manufacturers proved too conservative to try Kyocera’s current technology, Inamori ventured into the US and eventually contracted with Texas Instruments to supply electrical resistance rods for the Apollo space program.
Also relevant is Inamori’s best-known concept of “amoeba management,” in which large organizations are broken down into small units that work out their own goals and strategic plans. Businesses will need independent thinkers to find innovative ways to navigate an environment where governments will feel compelled to intervene in the name of ensuring economic security.
His bottom-up management style and investment in employee training have enabled Kyocera and KDDI to avoid the succession planning challenge that plagues Japanese companies. Inamori, who decided to retire at the age of 65 to study Buddhism, never stuck to his leadership position: “It didn’t have to be me to found Kyocera or KDDI. Coincidentally, heaven gave me this role and I just played it.”
kana.inagaki@ft.com