For many business people in their prime, the president may not be very familiar. The president who stands at the top of the company and gets an extraordinary amount of compensation. What exactly are they? The author, Uichiro Niwa, answers this question head-on.
The author is a person who, as the president of ITOCHU Corporation, has the experience of collectively processing a huge amount of bad assets and at the same time making the largest investment ever. The author's decision to perform this "offensive and defensive" at the same time was criticized both internally and externally at that time. Nonetheless, the author's judgment, which was done in both cases, eventually led to the protection and survival of the company.
He has earned the trust of others, nurtured his subordinates, protected the company, and succeeded in new projects. Such an author looks back on his work as president from the perspective of "what is the president". Keep an eye on places where it is difficult for others to cut. And, in order not to forget the feeling of ordinary employees, I use a crowded train when commuting. In this way, the author's view of work and leader theory, which continued to be prepared to take responsibility for the company and employees, are condensed in this book.
Knowing how the president works is also about understanding what his work is for business people. The leader theory is full of useful viewpoints not only for departments and section chiefs but also for those who lead the team. Through this book, why not re-question the significance and role of leaders and think about your own way of working.
Main points of this book
What is important in management is the timing of "offensive" and "defensive". It is necessary for the president to "decide where to attack and then protect" and complete the project with absolute conviction.
The president must show deep understanding to employees so that all people can exert their strengths, but sometimes it is necessary to make ruthless decisions for the company.
The president is only temporarily in charge of managing the company. One of the president's important tasks is to find a successor. Then, select a person who feels "I am an inexperienced person" as a successor.
Leader's resolution to ask in an era of leader distrust
Offensive and defensive at the same time
The author became president in 1998. When I was asked by the president at that time to take office, I temporarily suspended my reply. Because becoming president means "abandoning yourself completely." Can I do it? On the other hand, I knew that if I refused, the president at that time would be in trouble. The person who is appointed as the president may feel the "destiny" to take on it, big or small. The author decided to become president.
The biggest decision the author made during his time as president was the issue of dealing with huge bad assets. Immediately before that, when he was the vice president, he was involved in a huge investment business since the company started. Challenge spirit, leadership, ethics. We will look back on a series of experiences in which all qualities were asked from the perspective of "what is the president?"
After the burst of the bubble and the trading companies became unprofitable, the author felt the need to develop new businesses. Therefore, we focused on convenience stores, which had a large margin of growth. As a strategy for the food sector, it has begun to acquire shares in FamilyMart. At that time, it was also a time to dispose of bad assets accumulated in the pool and proceed with restructuring. In FY03 / 98, it posted an extraordinary loss of 142.8 billion yen, the largest deficit in 20 years. Under such circumstances, it was reckless and inconsistent to acquire shares with an unprecedented huge investment, and it was severely criticized from inside and outside the country. However, the author emphasized creating the basis of profits and protecting employment, and did not give up a step that this was a contribution to the company in the future.
A few months before the author becomes president, Seiyu and its affiliates will acquire FamilyMart shares after negotiations. The acquisition was successful, and the company's distribution business was expanded at once.
Decide where to attack and then protect
In management, the timing of "offensive" and "defensive" is the most important. If you are "defensive" by cutting costs or selling a subsidiary, you tend to feel relieved because you can maintain the profit margin even if sales are down. But if you don't get the source of profits, the gains on the sale go to debt payments instead of investment funds, forcing the company to shrink. That way, one day we will let go of our talent.
When asked for big investment advice, the author replies, "First decide where to attack and then protect." When you try to sell something, if you do not decide on a new investment destination, you will sell it even if it is a little cheaper. Then you can't get enough money when you want to invest.
After selling an asset and making an investment, the president must complete the project with firm confidence. Significant decisions require absolute conviction.
Keep an eye on what you don't want to see
The big picture of "a lot of bad assets" that the author dealt with was something no one had ever grasped. At that time, every company had bad assets, but they were trying to make up for the loss little by little. However, with such symptomatic treatment, no matter how much you wear and earn, you cannot increase your human resources unless you increase your salary. With strong opinions about reducing bad assets over 10 to 20 years, the author chose to get rid of them all at once while few people were selling bad assets.
The amount of bad assets in the company that was identified had reached nearly 400 billion yen. As expected, the author was also fascinated by blood. Still, you must not lie, you must have clean management. Based on this idea, in October 1999, an extraordinary loss of 395 billion yen was recorded, and batch processing was selected.
In addition, we have made no dividends to shareholders, which had been paid out no matter how difficult the business situation was. In the future, they are trying to increase profits and achieve high dividends. The author went out to explain to overseas shareholders and investors, and sometimes had a serious fight with investors. The stock price, including its subsidiaries, went up, partly because some people bought the stock because of its strength of belief and trust in the company's future. This is the turning point.
From there, the author reviewed the financial plan and achieved a record high net income of 70.5 billion yen in the following year following the fiscal year ended March 2000, when the company posted a deficit of 163 billion yen on its own and no dividends were paid. After that, the amortization of non-performing loans progressed further, and non-performing loans no longer swallowed profits. Employee morale also increased, saying that it would be profitable to earn money. Employee support was behind the success of these reforms.[Must read points!] Qualities and abilities
The president should be a split personality
What are the qualities that the president needs? One is that he is a "dual personality." Everyone has more or less contradictory qualities. In particular, the president must have that dual personality because of the underlying perception that "human beings are the company's greatest asset."
To make the most of this greatest asset, we must understand, benevolent, and move the various people in our organization. Without the ability to listen to and respect different opinions, we cannot make the most of our greatest assets.
When I was a student, the author was able to deal with everyone from honor students to inferior students equally. He learned that human character can be changed by education, books and encounters with friends. The author had a gentle personality when he was in elementary school. I was praised by a junior high school Japanese language teacher for writing, and after making a presentation in front of everyone, I became an active and active student.
There is not much difference in the talent that human beings originally have. Everyone has the potential to change if they make an effort to "want to be like this."
Sometimes the president is ruthless
While showing the understanding to the employees, when it is considered that "this is not good for the company", it is mercilessly cut off. The president is also such a person. It can be said that warmth and ruthlessness coexist.
In the extraordinary loss treatment when he was president, the author has proceeded with a sympathetic treatment from a microscopic point of view. On the other hand, macroscopically, they are taking ruthless measures. Of the subsidiaries that were in the red at the time, they decided to sort out 450 companies, which is about half. Since all the presidents of the company will be asked to quit, I considered the circumstances of the person's life and family. In addition, the retirement allowance was added significantly to the extent that it reached double the usual amount as a special allowance for some people. From a microscopic point of view, such as returning to the head office if you do not quit, it seems to be a very warm measure. However, there was a calm calculation in the macro.
Suppose a subsidiary posted a deficit of 40 billion in one year. Even if a total of 20 billion yen is paid for double the usual retirement allowance, the deficit of 40 billion yen will disappear with the company from the following year and it will turn into a surplus. From the side of quitting, even if a large amount of money is temporarily obtained as retirement allowance, the place of employment after that is not guaranteed. Annual income will drop at the place of reemployment. Therefore, restructuring is a harsh measure in the long run.
There was no other way for the company to survive. Being able to make such difficult decisions is also a necessary quality for the president.
Be loved and feared
In the words of political philosopher Machiavelli, the author interprets that "the ideal leader is loved and feared." People don't follow just by ruthlessness, but they don't follow by just warmth.
Looking at politicians at home and abroad, it is hard to find a leader who has both. There are many leaders who are only loved or feared. Recently, the number of well-understood bosses has increased because they are liked by their subordinates, but that does not allow them to grow.
When scolding a subordinate, he / she must respond flexibly based on human understanding. Instead of scolding me for making mistakes, I usually think from my subordinate's point of view as to whether there are any problems with my physical condition or personal life. The important thing is not to damage your self-esteem. Recognize the good points of the other party and then scold. And after scolding, put in some follow-up. In this way, it is a condition of an ideal leader to break the heart even in the rebuke of subordinates.
Succession and responsibility
I don't want to make money with the president
The author lives in a house he bought in the suburbs when he was a section chief and rides a Corolla. The president does not do it to make money. Since the president has a heavy responsibility of management, he should receive a reasonable compensation. However, you should think carefully about "Is it really working enough to get this much?" By converting your salary into an hourly wage. If you become the president, you will have more opportunities to receive entertainment, but you should think about where the money you are entertaining comes from and whether you are a person who is worth it.
The president is to give back to the company that has been indebted until now, or to contribute to society through corporate activities. Sometimes it makes money and sometimes it loses. However, the continued existence of the company is a social contribution. It is the president's mission to take the best possible response in the times and to take over the management of the company.
Leave the successor to the inexperienced
One of the president's important tasks is to find a successor. If the president is not prepared to develop a successor, no successor will appear.
"My executives are immature, so I can't leave it to them yet." There is such a president, but both the president and the officers are inexperienced at the beginning. It is better to leave it to you while you are immature. If the president is a person who feels that he is an inexperienced person, the person who is keenly aware of his lack of power will make an effort humbly. And a sense of responsibility nurtures people.
When actually choosing a successor, the top should not consult with anyone. This is because information will spread to the surroundings if you consult. The important thing is to observe. Through the liquor table, the author communicated with millions of candidates to see their true face and true intentions. He also said that promising human resources were given experience such as overseas assignments. By doing so, excellent human resources will naturally be pushed out from the surroundings.
If you quit the president, you're just an uncle
If it is not your own company, the president is just a person who is entrusted and manages the company in a short period of time. Even the president becomes just an uncle if he quits. Life after resigning as president is much longer. Therefore, if there is a difference in living standards between the two, it will be difficult to live the rest of their lives. Therefore, the author always kept in mind to live in line with the eyes of the world even when he was president. In my daily commute, I used the train like an employee to keep my standard of living.
Of course, even after resigning as president, the title of "former president" will continue to follow, and he will still carry the name of the company. But don't get caught up in the vanity that accompanies your title. It can be said that it is the duty of the person at the top of the organization to live close to the poor and the weak while contributing to the community and society while having the awareness of being "just an uncle".
Recommendation of reading
Read this book to learn more about the work of the author, who, as president of a well-known company, made unprecedented decisions and succeeded in the project. Getting closer to the president's thinking and decision-making process is very helpful in updating your thinking, no matter what career you take in the future. Whether you are a president, a department manager aiming to be an executive, or a person who is worried about your future as a leader, you will be able to get many suggestions about the "qualities and abilities" that a leader needs.