Report No.11
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Japan Entrepreneur Report No. 11 September 2003
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- The education issue
- Japan's companies rife with waste, says old school entrepreneur
- David Matsumoto on education in Japan
- Teachers get a taste of entrepreneurship
- Bits and bytes
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The education issue
Education is on my mind this month, since I just put one child into
the first grade and another into a new preschool. I used to smile at
anxious parents who fussed -- excessively, I thought -- over every
little thing involving their kids' schooling. Now that I'm in the
same boat, I find myself doing my share of fussing :)
Still, I try not to get too uptight about academics. My kids may or
may not become company founders, but at the least I hope they develop
entrepreneurial attitudes toward work -- and toward life. I doubt
that formal schooling will be a crucial element in their success if
they decide to go into business for themselves.
Now I'm watching my son learn the basic work skills he'll need
regardless of the profession he chooses: self-expression, cooperation
with and concern for others, creative problem solving, self-management
and so forth. But like his classmates, his entrepreneurial attitude
will derive from his values and personality rather than from specific
work skills he learns in school. I'm a firm believer that new work
skills can be learned at almost any stage of life. But personal drive
and a basic "hard work" ethic are values learned at home and from the
tough lessons of simply living. Ralph Parlette once wrote, "You
cannot get an education from a book or college any more than you can
get to New York by reading a road map." And as one interviewee
remarked in last month's Failure Issue
(www.japanentrepreneur.com/200308.html), experience trumps education
in both venture capital and entrepreneurial endeavors.
This is exactly why Japan's educational system needs reform,
especially with respect to entrepreneurship-related training, say both
educators and businesspeople. It's not that "entrepreneurship skills"
per se need to be taught; it's that children need to better learn the
basics of socialization, self-expression, and creative thinking.
David Matsumoto, interviewed below, says that parents in Japan tend to
overemphasize formal education and underemphasize moral and social
development, even within the immediate family. As Japanese culture
undergoes a rapid transformation from collectivist to individualistic
values -- something inevitable in a modern, capitalist society -- it
is crucial to retain traditional values of sincerity, perseverance,
loyalty, self-control, honor and pride, says Matsumoto.
Let me add frugality, or cost consciousness, to that list. The
ability to discern which activities earn and which activities cost is
essential for entrepreneurs. And like Matsumoto, after nearly 20
years of full-time involvement with Japan, I'm convinced that
materialism has replaced frugality as a core value among many in Japan.
Akio Yamada, profiled in the next story, has much to teach us all
about cost consciousness.
So welcome to the Education Issue of JER. I've fussed over it long
enough -- time to get it out the door. And besides, it's 2:45 -- time
to go pick up my new First Grader :)
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Japan's companies rife with waste, says old school entrepreneur
Clad only in a sleeveless white T-shirt, thin cotton pants and sandals,
Akio Yamada, co-founder of electrical materials manufacturer Mirai
Kogyo, dresses for work in the summer like, well, a slob. But he
seems oblivious to his appearance as he makes the rounds among
employees on Mirai's factory floor in Gifu Prefecture.
Nicknamed "the super stingy manager," Mr. Yamada wears casual garb in
hot months to reduce air conditioning costs, and encourages all
employees to follow his rather slovenly example. An executive who
wears an expensive suit while exhorting employees to save money has no
credibility, Mr. Yamada insists.
Credibility is one thing Mr. Yamada has plenty of. Mirai Kogyo, the
company he co-founded in 1965 and where he now works as an executive
adviser, posted sales exceeding U.S. $200 million last year. He
attributes much of Mirai's success to an unrelenting focus on cost
cutting -- and to a management style that ignores HO-REN-SO, the
Japanese work philosophy that emphasizes Reporting (Hokoku),
Communicating (Renraku), and Consulting with others (Sodan).
"'HO-REN-SO' itself is the essence of waste," Mr. Yamada said in a
recent interview with Nikkei Venture magazine. "All employees need to
do is use their own judgment to make decisions about problems at hand,
then carry on with their work."
According to Mr. Yamada, cellular telephone usage is another over-
inflated "productivity" balloon waiting to be popped by sharp insight
from the old school of entrepreneurship. He recalls boarding a bullet
train and overhearing a suited worker using a mobile telephone to call
his superior and report that 'I have now boarded the Shinkansen and am
returning to the office'.
"How much did his company earn from such a meaningless communication?"
Mr. Yamada wondered in the same interview. "It costs 80 yen to make a
three minute call from a mobile to a fixed-line telephone. What a
complete waste of money." Employees can use public telephones almost
everywhere, and true emergencies that demand instant access to a
telephone are extremely rare, he notes.
Mr. Yamada says that if HO-REN-SO and cellular phones truly boosted
productivity the way magazine articles and telecom carriers claim,
profitability at Japanese companies should have skyrocketed over the
past ten years, in step with the soaring popularity of mobile handsets
and the Report-Communicate-Consult work philosophy. But he notes that
only 80,000 firms in Japan reported pretax earnings of more than 40
million yen in 2002, a number almost unchanged compared to ten years
ago. Telephone companies and media touting the productivity benefits
of mobile phones and HO-REN-SO deceive consumers, he says.
In fact, Japan's companies are rife with waste, most of it hidden
within "commonsense" practices and procedures, says Mr. Yamada, who
makes a point of walking the factory floor to check for lights left on
and other inefficiencies. According to Mr. Yamada, constantly
questioning whether a given action earns or waste money not only
develops frugality; it cultivates a habit of careful thinking about
all work activity. Equally important, new product ideas and other
work-related insights naturally occur to employees who learn to think
like this, he claims.
That Mr. Yamada's ideas seem so fresh today speaks to how stylishly
inefficient domestic business is in Japan. If his old-school
philosophy ever comes back into vogue, the streets of Tokyo will see
fewer sharply dressed, handset-toting salaried workers, and more
handset-free, cost-conscious...well, slobs. And that will be a good
thing.
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David Matsumoto on education in Japan
This month we enjoyed telephone and e-mail chats with educator and
psychologist David Matsumoto, who was in Osaka representing the
International Judo Federation at the 2003 World Judo Championships.
In his most recent book, "The New Japan: Debunking Seven Cultural
Stereotypes" (www.amazon.com/exec/obidos/tg/detail/-/1877864935/),
David says that Japan is rapidly transforming from a collectivist to
an individualistic society, a change with serious implications for
education. Here are excerpts from the conversation:
- In your book, you argue that Japan's entire educational system --
including its administrative structure, teaching methodologies,
student-teacher ratios, and even the physical layout of the classrooms
-- is based on outmoded collectivist values. What specific changes --
especially concrete, easily measurable changes such as classroom
redesign -- could be made to foster more individuality and creativity?
Eliminating fixed, forward facing seating, and reorganizing classroom
chairs in semi-circles to promote interaction both between pupils and
between teachers and pupils would be a powerful first step. Japan's
schools are grounded in a passive learning model. Students don't
engage with their teachers; they have few discussions and rarely ask
questions. This delays development of their critical thinking skills.
The rote learning approach made sense in a post-World War II era
during which Japan was rebuilding its infrastructure and economy, but
we're past that point now. Being entrepreneurial requires flexibility
and outside-the-box creativity. A passive approach to learning
doesn't foster those skills.
- In spite of the move away from collectivism and toward individualism
discussed in your book, there is still a "big company" bias in Japan:
most new college grads hope to work for large, established firms,
customers want to buy from big vendors, and governments prefer to
procure from giant corporations. But this thwarts entrepreneurship.
What role can education play in overcoming this bias?
One of the biggest things the educational system can do to encourage
entrepreneurship is to help foster the development of the cognitive,
social, and emotional skills that underlie entrepreneurship. These
include not only the ability to read and memorize, which the Japanese
currently do so well, but to critically and creatively think about
things, brainstorm, and develop new ideas, new solutions, and new ways
of thinking and doing things. This, unfortunately, is not well
fostered under the current Japanese educational system. To do so the
educational system will need to encourage discussion, open questioning,
challenging, and the pushing of ideas and exchange of information in
ways that it currently does not even fathom. Yet my experience with so
many students in Japan suggests that they are ready for such changes.
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Teachers get a taste of entrepreneurship
What surprised schoolteacher Sachie Uyama most during her on-site
visit to the SunBridge Venture Habitat was the absence of partitions
and lack of a separate president's office. "Employees can talk to the
CEO anytime," she enthused in a post-visit evaluation. "I'd like to
work for that kind of boss."
Few of Japan's schoolteachers have hands-on business experience, and
fewer still have the opportunity to talk directly with venture
capitalists and other professionals who directly assist entrepreneurs
every day. So when the Venture Egg Forum (VEF) -- a group of Tama
area university volunteers dedicated to helping students develop their
entrepreneurial aspirations -- invited a group of teachers to spend
half a day at a continuing education session at SunBridge, the
teachers eagerly agreed.
The SunBridge presentation focused on the role venture capitalists
play in helping entrepreneurs realize their visions, and activities
the teachers might use to encourage entrepreneurial thinking, even
among very young students.
What was the single most important SunBridge takeaway the teachers
plan use to encourage entrepreneurial attitudes in their pupils?
"Show and Tell," said Ms. Uyama, an elementary school instructor. "The
idea of having children think about how they can use their abilities
to contribute to society, or how they can make others happy, and make
those presentations in front of others, is something I'd like to see
adopted throughout our school."
Chie Eguchi, another elementary school teacher, agreed. "I intend to
start using Show and Tell in my own classroom," she wrote in her post-
visit evaluation.
"Show and Tell is a simple activity that starts as early as
kindergarten in the United States, and it is a wonderful tool for
developing self-expression, confidence, and presentation skills," says
Allen Miner, who led the SunBridge presentation. "But there is no
tradition of Show and Tell in Japan. I can't think of a better -- or
simpler -- tool to start teaching young children some of the values
and skills essential to an entrepreneurial approach to life."
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Bits and bytes
More Japanese white-collar salaried workers are moonlighting, and a
growing number are doing it for training and experience, not just to
earn extra money, according to an online study done by weekly business
magazine Shukan Diamond. Diamond reported that nearly 17% of more
than 1,000 respondents surveyed are moonlighting, up from 12% a year
ago. The salaried workers surveyed, all in their 30s and 40s,
increasingly are moonlighting to test the waters for starting their
own businesses, says Diamond.
Tokyo-based writer Ken Belson has a new book out called "Hello Kitty:
How Sanrio Turned Cute into Cash". Co-authored by Brian Bremner,
another wonderful local writer, "Hello Kitty" reveals how Sanrio
transformed an all-but-featureless cartoon critter into a ferocious,
multibillion-dollar global business powerhouse that continues to
compete successfully with Disney and Warner Brothers. See
<www.amazon.com/exec/obidos/ASIN/0470820942/> for more detail, and
stay tuned for Ken's take on Kitty-driven entrepreneurship next month
right here in JER.
Paul Goldsmith, founder of the 200-employee Tokyo-based PANACHE
corporation, will give a talk entitled "They're right, it's tougher
to run your own business than you think, but it's worth it!" at the
next Entrepreneur Association of Tokyo seminar Tuesday evening October
7. See <www.ea-tokyo.com> for details.
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Tim Clark
Senior Fellow
SunBridge Corp.
Voice 813.5459.0765
Fax 813.5459.0629
clark@sunbridge.com
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Copyright 2002-2003 Tim Clark
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