Without mobility of human resources and telework, there will be no revival of Japanese companies.

2020.02.14 06:00

Shimomaruko Station on the Tokyu Tamagawa Line. This is the closest station to Canon's headquarters. In the morning, I see many people who look like Canon employees heading to Canon's headquarters from this station. It may be my imagination, but many of them look pale. Their faces look pale and lifeless.

Nikon headquarters is located at the Konan Exit of Shinagawa Station. Last year, I stood at the Konan Exit of Shinagawa Station for several days and observed people who seemed to be Nikon employees on their way to the Nikon headquarters. Many of them were as lifeless as those who appeared to be Canon employees.

Reading the "Directors and Executive Officers" section on page 54 of Canon's annual securities report for the fiscal year ended December 31, 2018, one feels a sense of gloom, for all four representative directors cannot be confirmed to have ever changed jobs.

When I read the "Directors and Executive Officers" section on page 44 of Nikon's annual securities report for the fiscal year ending March 2019, there are some who have come from banks and life insurance companies, but they are all elderly Japanese men who do not seem to know the wider world and are not up-to-date on the latest information.

If a company is run solely by people who live in the suburbs of Tokyo, commute by crowded trains for many years before becoming executives, and know nothing of the rest of the world, it is no surprise that the company's management will deteriorate.

A company that lacks mobility of human resources and a dispassionate outside perspective will fail to recognize problems in the way it conducts its business.

In addition, the average age of employees at both Canon and Nikon is high (in the 43-44 age range), and they are unable to respond to drastic changes in the external environment because they are still reeling from past successes, thinking that "if you make good products, they should sell.

I think it is a good trend that an increasing number of institutional investors have announced their acceptance of the Japanese version of the Stewardship Code. I strongly recommend that all shareholders vote "no" on the proposal to reappoint the current directors of Canon and Nikon.

On a different note, Azumi Mizusawa and her husband, who were classmates of mine at junior high school in Takasaki City, Gunma Prefecture, have started a crowdfunding campaign. They achieved 89% of their goal within a week of the start. I also signed up for the 15,000 yen hunting experience course.

Azumi said that she worked for a number of IT companies in Tokyo. After their marriage, in 2016, Azumi and her husband moved to Takasaki City, Gunma Prefecture (population of about 370,000), where Azumi is from. A year later, they moved again to the nature-rich city of Tomioka in Gunma Prefecture (population just under 50,000). Azumi still works for an IT company in Tokyo while teleworking.

I believe that the era of Tokyo's monopolistic concentration will end in the near future with a very high probability. Unlike the U.S., Japan has fiber-optic lines everywhere there are people living. This means that even if you live in a rural area, you can still do cutting-edge work. The rationale for living in densely populated, expensive, and stressful urban centers is rapidly disappearing.

It is no wonder that the management of companies with many employees living in the suburbs of Tokyo, where rent and other living expenses are high, commuting on crowded trains that deprive them of free thinking, and facing power-harassing bosses five days a week, are suffering from deteriorating business conditions.

Not only Canon and Nikon, but any company where human resource mobility is low and substantial decisions are made solely by highly homogeneous elderly Japanese males is likely to disappear in the near future. Human resource mobility should be increased and telework should be widely implemented. Other than that, it is difficult to find a way to survive.

first appearance : AGORA