Every Discovery Expedition of this IMD MBA journey combines stays within both a developing country and a developed one. China was therefore bundled with Japan, providing a very contrasting experience.
After landing in Osaka, the group headed to Kyoto, where Tomo Noda, founder of the Institute for Strategic Leadership and active member of Keiza Doyukai (Japan’s Association of Corporate Executives, tasked with revitalizing the economy of various regions in the country), introduced my classmates and I to local company executives as well as Keiro Kitagami, Japanese politician within the current opposition party and member of the House of Representatives in the Diet.
In addition, visits to historical businesses and cultural sites in the area were arranged.
We were in for a full treat of Japan.
The tight schedule for a stay in Kyoto of only 2.5 days was expertly managed by Miko Ozawa, who displayed a level of perfection in her organization that was second to none. From the maps with handwritten notes and highlighted locations handed out to each one of us at the start of a day, down to the Pasmo smart cards for public transports charged with the required amount for all trips during the stay, the dietary requirements verified weeks prior to our arrival in Japan and communicated in advance to all the restaurants we went to – in short: whatever you could possibly think of, Miko had thought about it long ago and down to a level of details that surpassed everyone’s expectations. Less than an hour after meeting her, one of us claimed: “this is going to be the best-organized trip I have ever been on.”
Miko – in many ways – embodies the Japanese values we witnessed again and again during our various interactions with locals. Even in seemingly mundane regularities of daily life, the attention to details, the rigor and absolute dedication to one’s tasks is so prevalent that small gestures such as the refined way shopkeepers hand out the change are opportunities to smile with admiration.
From a business perspective, it was greatly enriching to see how century old companies, such as the tea company Fukujuen, founded in 1790, and the textile company Hosoo founded in 1688, managed to continuously adapt to changing times while staying true to their origins.
In the case of Hosoo, this constant balance between innovation and tradition allowed the company to shift from its original focus on producing superior quality garments for kimonos worn by the nobles of Kyoto’s Imperial Courts and the samurai class, to becoming a producer of fabrics for high-end interior and fashion designers such as Chanel, Dior, Louis Vuitton, Bulgari and many others. Hosoo reacted to a declining demand for traditional clothing – driven by multiple factors such as Japan’s changing demographics – by exploring new opportunities in which its famous textiles could be applied.
In our discussions with Masao Hosoo, President of Hosoo and 9th generation of the family running the business, great emphasis was also put on the importance of continuity (according to him, a 300-year-old company is “not that old in the eyes of a Japanese”) and the will to perpetuate the craft, so that people around the world keep benefiting from the results of traditional production methods such as the three dimensional weaving technique or the special yarn dyeing art of Nishijin.
All business owners and managers we encountered in Kyoto genuinely believed that their mission was – first and foremost – the preservation of ancient traditional arts and values, with financial rationales dictated by NPVs and other metrics only coming in second; business owners acting as guardians of traditional culture and collective identity.
Interestingly, the balance between tradition and innovation permeates all layers of Kyoto’s society and can also be witnessed outside of the family owned businesses. All it takes is a quick stroll through Arashiyama’s Bamboo Forest in the Western part of the city, where encounters with women in traditional kimonos playing on their smartphones are numerous.
Despite its constant attention on innovation with one of the world’s highest R&D expenditures (both in absolute numbers and as a percentage of GDP), Japan is a country facing multiple challenges: extreme demographic shifts are affecting the entire societal framework, deflation remains an uncured chronic illness, government debt is equivalent to over 250 percent of the country’s GDP in 2016, and Japan’s defense budget has been underfunded for decades, forcing the country to largely rely on the US to counterbalance the growing military strength of China.
Where can Japan find a lasting economic growth that Shinzo Abe is so desperate to bring back?
Or could this entire obsession for growth, largely promoted by economists, industry, and government, in spite of the expected population decrease, be entirely wrong?
What if Japan, with its developed society and aging population, needs a different model?
And while those questions remain unanswered, fuelling a certain kind of anxiety as to what the future may hold for members of Japan’s lost generations, I have come to realise that there are only very few things in life more soothing to the restless mind than an early morning walk through the countless gates – donated by Japanese businesses – of Kyoto’s Fushimi Inari Shrine.