Masahiro Okafuji
When Masahiro Okafuji became President and CEO of one of Japan’s best-known general trading companies (sogoshosha) in 2010, he had his work cut out for him. Once-proud ITOCHU Corporation had fallen to fourth place in the shosha rankings. President Okafuji
Yet even that promise looked difficult to keep. Shosha are ranked by global sales, and the top two firms have held those positions seemingly forever. Moving up just one notch would require both brilliant strategy and a Herculean effort.
Then came a tectonic shift that sent shock waves through the business. When the big shosha closed their books last year, ITOCHU had rocketed to number one. The common explanation was that, at Okafuji’s direction, the company had decreased its massive energy and resource investments just before those markets tanked. However, inside ITOCHU, people spoke of the “Okafuji Reforms,” a series of major internal policy changes that turned the company into a tiger almost overnight and stunned the competition.
“I didn’t set out to be a reformer,” Okafuji explains. “I just wanted our staff to rediscover what it means to be a shonin.” He uses the traditional Japanese term for the hardworking merchants of old times, who met with their customers face-toface every day and placed their needs above everything else. “ITOCHU was born from shonin culture,” he continues, “and if we lose that, we have lost our soul. I wanted to remind everyone of why we are proud to be called shonin.”
In short order, Okafuji instituted policy changes to refocus staff. For example, he ended ITOCHU’S f lextime system. “We had people coming in at 10:00 a.m., talking about working ‘core hours.’ Maybe that’s OK for other firms, but not for a sho
sha. We exist to serve our customers. The second we forget that, we start to go out of business. Our customers begin to work early in the morning; if they want information or need help with something, they won’t wait until 10 to call us. If our rep isn’t there to take their calls, the customers will find someone who is.”
Get Out of the Office!
To boost efficiency, Okafuji slashed the number of meetings and the volume of paperwork being generated. “No one ever sold anything by sitting in a meeting,” Okafuji says, his voice rising slightly with characteristic passion. “You can’t serve your clients by designing a Powerpoint. You have to get out of the office and go do real work. You have to meet with your customers every day. That’s what shonin do.”
A sign on his office wall sums up Okafuji’s management philosophy: “Earn, Cut, Prevent.”
“Everyone is focused on earning; that’s natural because it feels good. Other sho
sha all focused on making money … strategically or not, that’s another story,” he says with a smile. “But everyone dislikes cutting off the fat—eliminating waste— because it can be very painful.” The sho
nin of old understood that, he explains, but too many of today’s executives lack the will to do what is necessary.
As for “prevent,” Okafuji explains, “It’s essential to examine all our businesses and anticipate problems before they arise. We must look at our strategy and constantly adjust it to respond to changes in the global economy. Preventing losses is much cheaper than dealing with the consequences.”
He concludes: “People ask if there will be a role for shosha in the future. I say, as long as we provide useful functions and serve our clients faithfully, there will always be a need for hardworking shonin.”