Steve Jobs once said, “You can’t connect the dots looking forward; you can only connect them looking backward.” Even the Great Confucius explained that if we want to define the future, we have to study the past.
In an insightful research made by authors Schwartz and Bergfeld, they pointed to Japan as the only country that seemed to challenge the third generation curse much better than others. But it is not only the extreme cases of very old companies that are baffling business experts. In fact, the overall life expectancy of a Japanese family business is higher than the standard corporate life of an enterprise.
According to professor Toshio Goto from the Japan University of Economics in Tokyo, the average lifetime of a Japanese family business in 2005 was 52 years, more than double that of its American counterparts. It is also noteworthy to acknowledge that a surprising number of businesses in Japan have been in existence for 100 years or longer. Such longevity may hold useful lessons for new businesses to use as reference.
What are some of the ways in which these longstanding enterprises have managed to endure? What then can the unique Japanese approach teach us about longevity?
A nationwide Japanese survey counted more than 21,000 companies older than 100 years. Of these, about 1,200 firms have been in existence for at least 200 years, and some 400 businesses for at least 300 years. On the other hand, around 30 Japanese firms have endured for 500 years or more, and seven have been in existence for more than a thousand years.
One Japanese family-owned business that symbolizes longevity with a rich history spanning 500 years is worth sharing. This company has grown big and evolved into a well-respected corporate venture that has become known in Japan and the rest of the world.
If family businesses from around the globe strive for future prosperity and family survival in an increasingly volatile, complex and ambiguous world (Vuca), how does a tradition-rich company manage to keep pace with an ever-changing world?
Toraya Confectionery Co. Ltd. is a Japanese confectionery company founded by Enchu Kurokawa in the early 16th century, Kyoto. Toraya, a maker of wagashi (traditional Japanese confections), was a supplier to the imperial court during the reign of Emperor Goyozei, which was from 1586 to 1611. Toraya established a foothold in Tokyo in 1869, after the national capital was transferred there on the heels of the Meiji Restoration.
At present, Toraya has three factories and approximately 80 shops throughout Japan, in addition to a boutique in Paris.
In its English webpage, the first clearly documented reference to Toraya is in existing temple records from 1600. There were also records dated Sept. 15, 1635 that provided a glimpse into the company’s business at the time of proprietor Enchu Kurokawa’s death. I will walk the reader and articulate each of Toraya’s longevity principles as manifested in its 500 years of existence.
Value No. 1: It is important to focus on the present
Toraya’s current president, Kurokawa Mitsuhiro, the seventeenth to take the helm, does not spend too much time dwelling on his company’s illustrious past. Kurokawa believes focus on what needs to be done now, rather than simply following the ways of the past, is what has kept Toraya in business all these years and also allowed it to preserve many of its traditions.
To be continued...