Kazuo Inamori, founder of Kyocera and KDDI, has become a famous figure in Japan now with his rescue of Japan Airlines. He was appointed (at the ripe old age of 78) as chairman of JAL in 2010 after it had entered bankruptcy. According to an interview with him in last week’s Diamond magazine (Japanese), he had to scold JAL’s management every day at the beginning.
He also mentions that four or five foreign consultancies came to see him, as soon as he took up his post, to say that they had restructured American airlines, and could help him with JAL. “Their methods seemed very impressive, but somehow didn’t quite ring true for me, so I turned them all down”.
Inamori told the senior executives at JAL that a bankupt company must have something missing at its core, and that would only become apparent by looking at the numbers. However the only numbers he could get were 3 or 4 months old – he was told that as the company had offices around the world, and flew 1000 planes a day, it took time to gather the numbers. They seemed to think Inamori was an ignorant old man from a provincial university, who was just a technologist who didn’t know anything else. So he told them that this was not management – even a pilot needs measurements to fly a plane. “It was a bureaucratic elite”
There were 16,000 voluntary redundancies, but that still left 32,000 people whose jobs Inamori wanted protect. He did not want JAL to go through a second bankruptcy, but with the current management, it did not seem possible to revive the company. So he asked Onishi, the then President, now Chairman, to come up with a philosophy, using the Kyocera philosophy as a reference, that the executives and the whole company could sign up to.
Inamori would then lecture the executives on his management principles “although I could see from their faces that they thought I was just an old man treating them like children”. Eventually enough people were won over. JAL is profitable again, but as Inamori himself points out, his 8000 “followers” are mostly from Japan’s SMEs.
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