Japan’s Economy To Gain Traction In 2022

One of Japan’s most senior business leaders talks about what makes a good corporate executive amid an environment of constant change.

Since becoming President of Kikkoman Corporation back in 1995, Yuzaburo Mogi has been the public face of the company. He took on the dual role of Chairman and CEO in 2004. Having helmed the company’s day-to-day operations for more than 15 years, Mogi was appointed Honorary CEO in 2011 and retained his post as Chairman of the Board. Regardless of his title, Mogi will always be known as the leader who trans­formed Kikkoman into a global household name.

“Data don’t make decisions; people do.”

Mogi is not only one of the most senior business leaders in Japan, he is also one of the most respected. A key proponent of internationalization, he persuaded his com­pany in the early 1970s to do something radical: build a factory in the U.S. Mogi then spearheaded the development of a network of production plants and sales subsidiaries around the world. Today, Kikkoman’s main product—soy sauce or shoyu in Japanese— is enjoyed in over 100 countries. “Roughly 75% of our business profit comes from our overseas business,” Mogi proudly says.

After expanding rapidly in North America and Europe, Kikkoman plans to enter new markets. “We see new horizons beckoning,” Mogi says. “We are looking to expand our sales in Asia, and then develop the South American and African markets in the years to come.”

With the world facing unprecedented challenges due to the Covid-19 pandemic, Mogi—who is seen as one of the boldest and most internationally savvy executives in Japan—believes corporate leaders need to be steadfast and be prepared for the unexpected. “The most important quality for a chief executive is to be forward-look­ing,” Mogi says. “Not just thinking about the future but being able to see what lies ahead and navigate accordingly. There are always so many possibilities. You must decide which path is best for your company.”

Mogi says CEOs also need to be decisive leaders. “An executive needs the ability to decide. That means, examining information, evaluating it, and making clear judgments—in other words, decision-making ability. A CEO needs to be able to both guide and persuade employees and to create a con­sensus in the company in order to get things done. Not by issuing orders, but by leading people in a certain direction.”

Given the rapidly changing business envi­ronment, Mogi says the job of CEOs will be extremely difficult in the next two decades. “The next 20 years will be much more challenging than the past 20 or 30 ever were. Think of what the pandemic taught us. There are all sorts of risks we didn’t think of before and can’t even see now.”

While technological advancements will help CEOs navigate the future, Mogi says corporate leaders need to harness these technologies to make the best decisions. “There are things we couldn’t adequately measure before and data we didn’t have before that are now available. Because we have much more data to work with, we have a slightly better view of the future than we did in the past. And yet it is still difficult to make good decisions.”

Mogi believes that one important thing has not changed and won’t change anytime soon: “In the end, it’s still the CEO’s job to decide what the future will look like for their organization. Digital tools, AI systems, and big data can help, but at the end of the day someone has to make a decision. Data don’t make decisions; people do.”

Yuzaburo Mogi is a descendant of one of the founding families of Kikkoman, which is among the oldest continually running businesses in Japan. Mogi holds an MBA from Columbia University.

www.kikkoman.com

THK stays ahead of competitors as global demand recovers post the pandemic.

“Our focus on market share is one of our strengths, and we will continue with this approach.”

Digital Transformation

To boost productivity and efficiency, Teramachi aims to tap digital technologies such as artificial intelligence, Internet of Things and robotics in THK’s manufacturing processes over the next three years.

“Robots work 24 hours per day, 365 days per year, and you don’t need to take the impact of Covid-19 into your calculations,” Teramachi says.

Following the release of Omni THK, a communication platform designed to sup­port customer purchasing processes, the company launched OMNIedge—an IoT predictive service—in January 2020 as the Covid-19 pandemic started to wreak havoc in the global economy. The platform allows sensors installed on THK components embedded in the clients’ performance monitoring equipment to collect and ana­lyze data, enabling it to predict faults and minimize malfunctions automatically, with­out human intervention.

Big Data

Many THK products are already in operation across a variety of industries. By attaching sensors to such products, the data gener­ated is becoming increasingly dense, facili­tating more accurate analysis.

“This is big data,” Teramachi says. “We have established a diagnostic threshold on the safety side enabling us to send out early warnings. The more data we collect, the more analysis we can execute, leading to shorter lead times.”

The recovery in the economy is boosting THK’s sales for the new platform, with the automotive industry emerging as an impor­tant client for OMNIedge.

“We have picked up business from a large number of automotive-related makers,” Teramachi says. “In addition, operations at many of these companies are becoming increasingly global, and we are now being asked to install our products in factories in each country where they operate.”

Golden Anniversary

Having celebrated its 50th anniversary in 2021, Teramachi believes the company has survived the last five decades because its ability to innovate and produce industry-leading products helped it maintain its top market share.

Maintaining a dominant market share is important for Teramachi because it helps THK stay abreast of the clients’ wants and needs. The information the company gath­ers from clients enables it to develop and propose follow-on products.

“Of course, sales and profits are important for us, but our primary objective is market share,” he says. “Our focus on market share is one of our strengths, and we will continue with this approach. Over the next 50 years, we will transform our corporate structure to become a manufacturing and innovative services company, based on OMNIedge and Omni THK, and will pursue further growth.”

Akihiro Teramachi graduated from Keio University in 1971 and joined THK Co., Ltd. in 1975. He became a Director in 1982 and Vice President in 1994, before becoming CEO in 1997.

www.thk.com