Kazuo Inamori: Lessons from a Great Japanese Industrialist
When the messy succession crisis unfolded at Apple supplier Nidec, Shigenobu Nagamori, its 78-year-old founder, was deeply sorry.
Over the past decade, he had stole a number of high-profile executives from automaker Nissan and electronics maker Sharp as potential heirs. But none of his overseas choices met his high expectations. Instead, they left the company, leaving a furious Nagamori last week to take advantage of one of Nidec’s founding members as interim president.
When Mr. Kazuo Inamori was alive, he told me that an insider in the company is the best as a president. “His warning turned out to be true,” Nagamori said, admitting guilt that he finally realized how talented his staff were.
Inamori, the famous founder of Kyocera ceramics and communication group KDDI, died at the age of 90 in Kyoto last month. He was known in Japan as the “god of management”, and was one of the country’s leading industrialists. Along with Sony’s Akio Morita and Soichiro Honda, founder of the eponymous automaker, Inamori helped drive the country’s post-war economic miracle. He also helped rebuild Japan Airlines from the ashes of bankruptcy in 2010 without getting a dime for his role as president.
Long before the emergence of stakeholder capitalism and the need to serve employees alongside investors in the West, Inamori’s management philosophy centered on his belief that companies should focus on employees’ livelihoods and well-being rather than simply pursuing profits.
In his first interview with the Financial Times in 1978, Inamori explained that what bound his company and its employees was not just a financial contract, but a “human relationship” based on trust and partnership.
He claimed that his motives 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, forcing proud JAL employees to save on expenses 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’s right as a human being. His principles have resonated beyond Japan to China, and attracted 15,000 students to his leadership schools around the world, including SoftBank founder Masayoshi Son.
How do these teachings resonate today? in his book compass to meetInamori questioned himself and then quickly dismissed the idea that his philosophy was outdated for the complex modern world. He argued that a sincere stance and focus on the common good versus national interests were the necessary approach to settling international trade disputes and history.
In an era of rising nationalism in the wake of the supply chain turmoil of Covid-19 and the energy crisis sparked by Russia’s invasion of Ukraine, there are practical lessons to be drawn.
One is the need for an entrepreneurial spirit at a time when the startup scene in Japan is so stagnant that the government has promised massive government investment. Like Honda’s founder, Inamori was a warrior and rebel, resisting interference from the government and banks as he transformed Kyocera and KDDI into global tech participants.
By creating KDDI, the second largest airline in Japan, he brought competition to the market that was previously dominated by the state-owned NTT. When Japanese manufacturers proved too reticent to try what is now Kyocera technology, Inamori ventured into the United States, eventually securing a contract with Texas Instruments to supply electrical resistance rods to the Apollo space program.
Inamori’s most famous concept of “amoeba management”, which involves dividing large organizations into small units that map out their goals and strategic plans, is also closely related. Companies will need independent thinkers to come up with innovative ways to navigate an environment where governments feel compelled to step in in the name of ensuring economic security.
His bottom-line management style and investment in employee training have allowed Kyocera and KDDI to avoid the succession challenge that has plagued Japanese companies. Inamori, who decided to retire at the age of 65 to study Buddhism, never clung to his leadership position: “It didn’t have to be me who founded Kyocera or KDDI. By chance, Heaven gave me this role and I was just acting it.”