Author: Jusuke Jj Ikegami
_Jusuke Jj Ikegami_
Reading time: 22 minutes
Synopsis
Resolute Japan (2024) shows how Japan’s main business leaders are ending many years of no growth. They do this by mixing old ways with new, quick ways of working. You will learn useful leadership ideas for handling difficult times, changing company culture, and helping workers move from just being a member to being truly skilled.
What’s in it for me? Learn about the new leadership making Japan’s companies strong again.
Imagine you are in charge of a very big ship that just won’t turn. You see a danger ahead, and you know you need to change direction. But the ship’s parts feel stuck because things have been done the same way for many years.
This frustrating problem was real for Japan’s big companies during what experts call the “Lost Decades.” In the late 1980s, Japan was doing very well because of a huge financial bubble. Stock and property prices became too high. When that bubble broke in the early 1990s, it caused problems for banks and prices fell. This lasted for almost twenty years. Japan was once known for being very efficient in the 1970s and 80s. But this changed into something else: not wanting to take risks, companies that couldn’t earn money kept alive by cheap loans, and a strong refusal to change. Japanese companies became known for not growing.
In this summary, you’ll find the plan to get free from these old problems. It comes from Japan’s amazing business comeback. You’ll learn how the “Resolute” model works. This plan helps you break down old separate departments without losing what makes your company special. By the end, you will know how to be a leader who can do two things well. You will balance keeping old safe ways with trying new risky ideas. You will be the kind of leader who can keep good things from the past while strongly creating the future.
Blink 1 – When the rule book failed
Let’s go back to the business world of the 1980s. Japan was what everyone else wanted to be like. The country’s success came from Theory Z. This was a way of managing based on everyone agreeing, staying with one company for life, and careful plans. American business leaders went to Japan hoping to learn their secret. But the story changed. The bubble broke, starting the “Lost Decades.” During this time, their famous strictness stopped them from acting. The system that built the economy was now harming it.
To understand how this stuck situation ended, we need to look away from company meetings and toward a natural disaster. On March 11, 2011, a very strong 9.0 earthquake hit the Tohoku area. After that, there was a big wave and a nuclear accident. The old company rules were not useful then. This is where Lawson, one of Japan’s biggest convenience store chains, becomes important.
In the old way, power came only from the top. The main office decided, and the store manager followed orders. But when the earth shook, the main office in Tokyo was too far to understand what was happening. Roads were blocked, there was no electricity, and deliveries stopped. The single way of working from one main office that helped Lawson grow suddenly made it impossible to work.
Sadanobu Takemasu, who later became CEO, saw the problems happening. With the old rules, local managers were supposed to wait for orders. But waiting meant not helping the people. So something amazing happened. Shop workers stopped waiting for orders and started helping people around them. When delivery trucks couldn’t get through, staff put supplies on motorcycles to deliver them. They sent out petrol trucks without being told and gave free food directly to places where people were safe. Within six weeks, almost 90 percent of the stores that were still standing opened again.
This was a moment of realization. Takemasu understood the company could no longer grow by telling everyone what to do from Tokyo. The shop workers – or gemba – had knowledge that the main office didn’t have. To deal with today’s fast changes, the company had to turn things upside down. Leaders had to listen.
You can see this change in how Takemasu acted. He went to the shops himself. He looked for clever new ideas instead of checking if rules were followed. When he found a local manager trying something new, he said good things about them. He put their ideas on company noticeboards. This showed everyone: new ideas are welcome here.
This change from always following rules to being strong and quick to adapt is the main idea of the new Japanese way. What worked when things were calm becomes a problem when things are unsure. Lawson’s lesson is very clear: when the ground shakes – really or just like it – the rule book from far away is not useful. To survive, you must give power to people who can truly see what is wrong.
That was how it started. But seeing that change is needed is one thing. Breaking down a way of working based on many years of service and everyone agreeing needs a very different type of leader.
Blink 2 – Changing the old-style worker
Seeing that the old rules don’t work is a good first step. But it brings up a harder question: who writes the new ones? For decades, the way to become CEO was clear and always the same. You joined a company right after university, chose a department – for example, the metals department or the food department – and moved up that same career path for 40 years. By the time you reached the top, usually in your sixties, you were an expert in your one area. But you probably saw the world in a very limited way. And when it was time to choose the next leader, you naturally picked someone who looked and thought just like you. This created a group of leaders who all thought the same. They cared more about agreement than about real problems.
Stopping this pattern needs a leader willing to change their own easy ways. This brings us to Jun Karube at Toyota Tsusho, a very large company that buys and sells things.
When Karube became the leader, he saw that knowing only one area was becoming a problem. If a manager spent their whole career in metals, they became excellent at selling steel. But they didn’t know about bigger changes in the world economy. They were experts in one area, but the world now needed people who knew many areas.
His idea confused the people who liked old ways. He broke down the separate departments. He made managers move to new areas they weren’t used to. People who had spent decades in food got moved to very different parts of the business. Leaders of departments complained. They said they couldn’t work without assistants who understood their special words. Karube said it must happen. He was teaching his future leaders to understand the whole company.
But even a person who knows a lot about the company is still part of it. To understand things clearly, Karube needed fresh eyes from the outside. He started asking people from outside the company to join the board. These were not just people who were there for show, but people who would ask hard questions. He brought in people completely outside the buying and selling world. This included an ex-government minister and leaders from different kinds of businesses.
He learned a lot from the direct and strong way people spoke at General Electric. He saw this when he worked in another country under the famous CEO Jack Welch. Karube wanted people to challenge each other. He wanted a meeting room where directors really discussed plans instead of just agreeing to decisions that had already been made. He started a rule to talk about bad news first. He asked for problems to be the first thing discussed.
The lesson from Karube’s time as leader is that being quick to change doesn’t just happen. It must be carefully planned. You have to stop promoting people only by how long they’ve worked there, not by skill. You have to ask people to join who will tell you when you make mistakes.
Karube proved you can keep peace within the company while still bringing in challenges to keep things moving. And once you have leaders who can really plan for the future, the next challenge is learning how to create the future without losing what’s good from the past.
Blink 3 – Starting the two-speed company
Alright, now you have leaders who can really see what will happen. That’s a big step forward. But it creates a new, quite scary problem: what happens when that future puts at risk what makes you money right now?
This is the difficult balancing act of this new strong time. In the past, companies became very good at getting the most from their current products. This was safe, easy to guess, and made money. Until the market changes and your main product suddenly becomes old and useless. The question becomes: how do you try out new, risky areas without sinking the strong company you already have?
This was the exact hard choice for Takuya Shimamura when he became head of Asahi Glass, now AGC Inc. For decades, they’d been the best glassmaker in the world. But by the 2010s, glass was just a basic product now. Cheap rivals were making it hard to earn money. The usual idea would have been to try even harder with the old way – spend less, make glass cheaper and quicker. Shimamura understood that was a bad idea. Making a failing business model perfect just means it will fail more slowly.
So, he started a plan of doing two things well at once. He would use the steady money coming in from old glass products to pay for new, risky projects. He changed the company’s image from a “glass maker” to a leader in “materials science.” That sounds like a small change in how they spoke about the company. But in practice, it was a big change to how the company was built.
Here’s where it gets interesting. Shimamura knew that if he simply asked his glass engineers to create new products that had nothing to do with glass, the everyday need to make a certain amount would stop new ideas. So he created a safe place for new ideas. He started a clear plan he called MIT, which meant Market assessment, Incubation, and Transfer. New ideas, like using knowledge of chemicals for making electronics or in biology, were developed in a special department. Only when these new ideas were strong enough did they get moved back into the main company work.
Shimamura visited factories himself. He told workers to think about “solutions” instead of just “glass.” He set very brave goals. He said that new key businesses must make 40 percent of the company’s profit. That made everyone think beyond the old ways of working.
The risky plan worked. By using old stable income to pay for risky future plans, AGC successfully grew into profitable areas like transport and electronics.
The lesson here? You don’t have to choose between being steady and creating new things. You can – and must – do both. But keeping that difficult balance needs more than a smart plan. It needs a management system with real power. One able to make sure these risky plans don’t fail badly. And that’s exactly what we’ll look at next.
Blink 4 – Management that has power
So, doing two things well at once is a brave plan. But even the bravest CEO needs to be checked. When a company changes from safe old ways to unsure future ways, who makes sure the plan stays on track? For decades in Japan, the answer was really “nobody.” Board meetings were often just for show. They were sometimes called shanshan. This means clapping hands to show agreement without discussion. Directors were usually people from inside the company, friends of the CEO. Their job was to agree, not to ask hard questions.
For a strong company to stay alive, the meeting room cannot be a place of just saying nice things. It has to become a place of useful arguments.
To see how a strong management system works, look at Recruit Holdings. By the early 2010s, Recruit was already a very big company in finding people for jobs. But CEO Masumi Minegishi knew that being too comfortable stopped growth. He didn’t want a board of friends. He wanted a board of what he called “Deciding Directors.” These were people who would seriously check his ideas.
Minegishi did something very new for that time: he asked important people from other businesses to join his close group. The former CFO of Sony. The Chairman of Asahi Breweries. These were experienced people from worldwide business fights who didn’t care about Recruit’s inside problems.
When Minegishi suggested a huge amount of money for buying companies abroad – nearly $7 billion – these outsiders didn’t just approve the money. They looked very closely at the plan. They made the company stop being too proud. Recruit’s old way of making foreign companies follow Japanese management was sure to fail. The board pushed for a plan where companies could manage themselves instead. They let the companies they bought manage their own business. That very important decision helped Recruit become a strong worldwide technology company.
The real test of this “resolute” management came with the most difficult decision a board ever makes: choosing the next CEO. In the usual way, the CEO leaving chooses the next leader. This is usually a loyal helper who has been patient for their chance. But in 2021, Recruit’s board looked beyond the older managers and chose Hisayuki Idekoba.
Idekoba was a very big surprise. At 45, he was very young for a leader in Japan. The average CEO becomes leader at 60. But Idekoba had something years of service couldn’t get: good outcomes. He had led the buying of Indeed and made it a worldwide driver of growth. The board decided that in a digital world, waiting for a leader to get old enough for the job was something they couldn’t do.
The lesson from Recruit is clear: management is the best safety net for plans. A board that truly makes decisions, not just oversees, can make sure skill is more important than how long someone has worked. By putting a system where ability wins at the very top, Recruit showed that the old ways were finished. And if the CEO is chosen for skill, not for how many years they worked, that idea must go beyond the board meeting room. It must include every employee.
Blink 5 – From just being a member to being skilled
The Recruit board showed that skill could be more important than age at the very top. So, the last big change needed is in the large, open offices below. This brings us to the most deeply held part of the culture in the old Japanese workplace: lifetime jobs. For generations, joining a big Japanese company was like joining a family. You were hired for what you might do, not what you could do now. And once you got in, you had a job for life.
This system created very strong loyalty. But it also created a strange situation known as the window-sitter: workers who no longer did useful work. But because of the system, they were safe. They were just given a desk by the window to pass their time until they stopped working.
For a company competing around the world, keeping unproductive workers is something it cannot do anymore. This truth became very clear for Hitachi, one of Japan’s famous big industrial companies. With over 300,000 employees worldwide, Hitachi was the perfect example of a huge, old-style company. But as it grew its business around the world, it faced a big problem.
In its businesses in other countries, hiring was based on a job for pay and specific skills. You hired an engineer for one exact job. Back home in Japan, hiring was still about joining the company as a whole. A “manager” in Tokyo had a totally different meaning from a “manager” in London.
Needing to bring this large company together, Hitachi made a clear change from old ways. It started stopping the old “member for life” system and starting a “job-based” system. To a Western person, this sounds like normal company practice. But for Japan’s work history, this was a huge change. For the first time, the company was explaining each job clearly – what it was, what to achieve, and how much it paid. Then it looked for the best person for it, no matter how old or how long they had worked.
This change deeply changes the unspoken agreement between the employee and the company. In the old system, your pay mostly depended on how many years you had worked. It was a prize for staying with the company. In Hitachi’s new model, pay is linked to how important the job is and how well you do it.
Hitachi had to make a worldwide system for ranking jobs. They listed thousands of jobs to make sure a job in Japan was the same level as a job in the United States. It removed the unclear parts that let unproductive workers stay hidden. Now, every job had a clear reason, and everyone in a job had to show why they were needed.
The change from just being a member to being skilled is perhaps the hardest part of this story. This is because it takes away the safety of a job for life that was normal for many years in Japan. But companies like Hitachi have realized that to stay important, this change is needed. By making it clear what each person should do, the company helps employees take charge of their careers, instead of just moving up based on age.
Final summary
In this summary of Resolute Japan by Jusuke Jj Ikegami, Harbir Singh, and Michael Useem, you’ve learned that Japan’s companies are coming back strong because of a mixed way of working. This combines old social duties with the quickness needed for the future.
This change starts when leaders stop using strict rule books. They start trusting the quick ideas of the workers, like what happened during a crisis. It gets stronger when leaders break down separate departments. They ask people from outside to question the current way of doing things and push for a plan that allows doing two things well. By using current strengths well, while also trying new risky ideas, companies can pay for their own growth without losing who they are.
This story ends by putting skill before age. It makes sure management truly leads the plan and every worker is valued for what they do, not how long they’ve worked.
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Source: https://www.blinkist.com/https://www.blinkist.com/en/books/resolute-japan-en