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Leaders / Use 15% of work time for new business / Time out from routine helps ideas develop

The Yomiuri Shimbun

Fumiya Kokubu speaks to The Yomiuri Shimbun.

By Tatsuya Sasaki / Yomiuri Shimbun Senior Writer Marubeni Corp., a leading general trading company in Japan, has undertaken a thoroughgoing reexamination of approaches and mind-sets in its businesses, and work-life balance. For this installment of Leaders, a column featuring corporate management and senior executives, President and CEO Fumiya Kokubu tells The Yomiuri Shimbun about his motivation and objectives.

A strong sense of urgency — a perception that our business might become extinct if we continue to do business as usual — has motivated us to act.

Up until now, Marubeni has realized a certain level of accomplishments as a general trading company by presenting solutions to challenges for customers and society, and also identifying what is needed for business growth. These efforts, however, have been directed mainly toward such commodities as resources, chemicals and automobiles. People used to ask us, “What will you bet on next?”

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  • The Yomiuri Shimbun

That approach was OK during the period when the prices of resources kept on rising, as many people thought that “resources will become scarce along with the economic growth in emerging economies.” This is no longer the case. While existing business is of course important, such practices alone cannot fill the gap that is emerging between industries.

In my view, the automobile industry is most likely to experience changes. While everyone used to think the same way about buying a good car, the preferences and value of today’s youth, represented by millennials, are completely different from those of previous generations.

A car is now a device capable of both collecting and transmitting information. It is also able to generate and store electricity. Cars will become part of “smart cities,” which offer a higher quality of life and realize more efficient society by utilizing advanced technology. What is required from the automobile industry is not merely manufacturing good cars, but also presenting new ideas.

[Marubeni established its “15 percent rule” in April. It allows all employees working in Japan to spend 15 percent of working hours on research activities to create new business, stepping aside from routine work.]

Employees are encouraged to use 15 percent of their working hours to conduct research activities in a free and unfettered way, instead of doing routine tasks. They create the time for it — equivalent to 15 percent of their working hours — by streamlining routine work. All employees are expected to consider how to create new business during that time.

Improvements to established business models at Marubeni are also encouraged. For that purpose, we created a mechanism named “Business Model Canvas” — a website that enables all employees to access information on earnings of departments and sections, customers and transactions, among other subjects.

Most employees used to pay little attention to unrelated businesses within the company and devoted themselves to how to enhance their own achievements. However, there must be many sources of profit in the company. By taking an approach that transcends divisions, we may be able to come up with new business ideas.

We introduced last year a “Business Plan Contest,” as a way to collect their ideas. About 160 proposals, exceeding the number we expected, were submitted before the first deadline in October.

Interesting ideas on various topics have been presented one after another regarding telemedicine, setting up a website to introduce specialized technologies for customers and an internal transaction system using blockchain. Final consideration of the proposals will take place this month. Once employees can see a promising business idea develop into a successful outcome, they will put more effort into research activities.

Learning from mistakes

When I was a university student, I aspired to launch a start-up and proceeded to create a business plan with friends.

We considered three options: an auction business for European used cars; running a specialized men’s shop exclusively handling items in black, gray and dark blue; and cultivating eels. We paid particular attention to the eel cultivation business.

We actually visited potential sites for eel farms and considered from where to import eel fry. A business plan was drawn up and fundraising was under way. The plan required us to collect about ¥50 million, but we were short by around ¥10 million. When I was a senior at university, I finally gave up on the plan.

I reluctantly started to look for a job. By then, many companies had already finished with job interviews. I somehow managed to enter Marubeni.

I was hoping to work in the seafood department — as I still aimed to engage in eel cultivation. However, I was assigned to the petroleum department. I worked for quite some time in the oil trading section.

From there, the company allowed me to do whatever I wanted to do throughout my career. Around 1987, when I was working in New York, I persuaded the company to set up a firm in Philadelphia to deal with oil futures trading among other businesses. I was very confident that the business would be profitable. I was even thinking about leaving Marubeni and creating my own business.

[After major market fluctuations due to the 1991 Gulf War, crude oil prices slumped sharply and remained low for some time.]

For the first few years after establishing the firm, we could earn a huge profit. However, the business environment turned out to be harsher once the price of oil began to stay fixed in a low range. As our deficit was increasing, Marubeni’s head office in Tokyo decided to throw in the towel in the spring of 1992 and shut down the company.

All the employees, around 35 people, were fired. I ran around between local Japanese companies, such as in the banking sector and the pharmaceutical industry, begging them to hire our clerical staff. It was a shattering experience to bankrupt a company that I was deeply involved with from the beginning. Lots of small mistakes of judgment must have piled up on top of each other to invite such a result. I learned an important lesson: Companies can go extinct easily.

Discover new jobs for growth

In first few years of the 2000s, I served as chairman and managing director of an overseas subsidiary in Hong Kong. When assuming the post, I was told, “Do whatever you want.” I was so excited because I had exclusively worked in the oil business in my career. The human network I built at that time is a precious asset.

In Hong Kong, not a few people have earned massive wealth in one generation. They all have unique ideas and it is so inspiring.

For example, I had a friend who made a profit by rating factories in China. He rated the credibility of factories by examining issues such as employees’ working conditions and the reliability of raw materials procurement, and sold the rating information to companies including a toymaker in the United States. He acted on reading about the growing trend of consignment production to China, and apparently sold off his company after increasing its capital by tens of times in about five years.

If we are able to read the trends of the times, we can find the seeds of new businesses anywhere. I realized that it was important to have as many interactions as possible with people from totally different fields in order to have new ideas.

[Marubeni has increased the number of midcareer hires and intensified personnel exchanges with other private-sector companies.]

As society experiences a dramatic shift, it is possible that young employees will see nothing valuable left in their careers, even after they follow the same path as their seniors and overtake them.

Conversely, we are in a world where we are allowed to do whatever we want. That is exactly why we want employees to discover a job they really want to try — using 15 percent of their working hours, instead of simply working on assignments given by the company.

If they discuss very frankly about “what I want to do,” there will be a chemical reaction that transforms these ideas into an explosively growing business in five or 10 years.

I believe my most important task is to get rid of a sense of stagnation for the future and create an atmosphere where employees actually feel, “We are in a place where we can make a dream come true.”

■ Fumiya Kokubu, 66 / President and CEO of Marubeni Corp.

Born in Tokyo in 1952. Kokubu graduated from the Faculty of Economics at Keio University in 1975 before joining Marubeni Corp. Kokubu served in posts including deputy general manager for China and president and chief executive officer of Marubeni America Corp. He became a corporate vice president in 2005 and senior executive vice president in 2012 before assuming his current position in April 2013. He has extensive experience dealing with fluctuating markets as an oil trader earlier in his career.

■ Key Numbers

¥230 bil.

According to the consolidated earnings forecast for the fiscal year ending in March 2019, Marubeni’s profit is projected to be ¥230 billion, marking a record for the second consecutive year. In the previous fiscal year, profit was ¥211.3 billion. Businesses in energy, metals and transportation and industrial machinery have gained momentum, and those in the power business and agri-input business have been strong. Incorporated in 1949, the Marubeni group has 130 branches and offices in 66 countries and regions. The consolidated number of employees was 41,353 at the end of March 2018.Speech

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