An octopus has eight legs, but sometimes they come into conflict with each other. No matter which tentacle sticks to a rock, no matter which leg catches a prey, it should not matter. However, when things do not work out right, the legs get entangled, and the octopus gets immobilized. It can move elegantly and smoothly if they can coordinate all eight of their legs, but they cannot if it is entangled. Similar circumstances are everywhere.

There are two problems.

First, there is this concept of “management by objectives” that Drucker talked of in his business theory. I think it states that mission management lets companies have a backbone that lets them grow. In Drucker’s perspective, relying on one charismatic leader is not a good idea.

I talked about “virtuous leadership” in the past, but it is difficult to maintain and hire a consistent amount of virtuous people. It almost depends on whether or not a leader has a divine mission and is not easy to maintain. Drucker himself did not want to rely on talent such as charisma, so he came up with different ways to grow a company.

Thus, it might be unfavorable to have a too ordinal leader, but if an above average capable person, who went through school became a leader, it makes sense to divide people into departments, give each a goal and have them compete in order to accomplishing them. They can try to raise wages, give away bonuses or help progress them through their career path; this is an acceptable style to grow a company if the leader is a talented person who was slightly better than an average person.

Not all companies have prominent people such as Konosuke Matsushita (founder of Panasonic) or Sony’s Masaru Ibuka and Akio Morita as their leaders. There are many giant corporations like Hitachi whose founders are not even famous. If there are many talented people like graduates from the engineering department of the University of Tokyo, then large work can be done without a prominent leader. I think Drucker’s thoughts lean towards this.

Thus, rather than using phenomenal personnel, he found a method to enlarge a company by using slightly, above-average people. This is one way of thinking, but if the department is run by an average person, it can cause numerous conflicts. There are things that need to be improved.

In addition, the only way for a person to become a leader is often to stay at the same job for around 20 years, so these people are often unaware of the bigger picture. As they climb up the ladder, they need to learn about all the aspects of the company.

 

Difficulties of a Vertical Company

I think there is one more factor: the “large corporation disorder” or “high-ranking disorder.” It is very unfortunate, but the basic mindset of someone with high-ranking disorder is to create benefits for one’s own departments, but none for the whole nation.

Even now, when we try to build preschools or kindergartens to take care of younger children, there is no specific department in charge of this task. It spans across multiple ministries like the Ministry of Education, Culture, Sports, Science and Technology, Ministry of Health, Labour and Welfare of Japan as well as other ministries, the local government and bureaucracies, so the progress is very slow.

There are similar situations in larger companies as well. Because of the vertical structure, each department is unaware of what the other does, leading to selfish complaints: the salespeople will demand more advertising that will lead to more sales and also ask for more budget for business trips and customer entertainment. “I won’t be able to do my job without them,” they may say, but the accounting department in the management sector often cuts these funds.

In addition, the manufacturing and sales departments can also collide because the manufacturers will complain, “The salespeople aren’t selling,” while the salespeople would say, “We wouldn’t need to work as hard if the manufacturer made better products.” These things actually happen, so even if there is an organization made up of decent employees, conflicts will arise from lack of understanding.

In the case of small and medium-sized companies, people need to be more well-rounded. Different departments help each other in their spare times. When finance is busy at the end of the month, people come from other departments to help out, and when people are needed to ship products, everyone joins in to fill the boxes and help out. They manage their spare time so the whole company helps each other. Everyone knows what is going on in all other departments because of the small size of the company, with the CEO sometimes coming out to give orders.

The problem is caused from human’s “limit in recognition.” As I have always said, companies with over 1000 employees can use University of Tokyo graduates, but it is commonly said that small-sized and medium-sized companies often find them useless. Sometimes, they focus too much on the technical details while other times, they are too focused on the bigger picture, making them unable to maneuver through their jobs.

 

No Work Without Orders

Officials from the Self-Defense Force (Japanese military) often serve as corporate consultants after they retire.

When Happy Science was located in the Kioicho Building, a retired army official of considerable position came to meet us several times. As expected, people from the Self-Defense Force always make clear responsibility and authority of the task—they clearly indicate who has the responsibility and who had the authority to make orders—things are never approved in the military unless these are properly planned. They are taught to stay away from tasks that are neither under their authority nor part of their responsibility. In short, busy departments stay busy while free departments remain free forever, which can be observed in large corporations as well.

Banks have this tendency too. If people held multiple positions, they could easily cheat, so they are only assigned one job. They make sure it is obvious who did what. They know who the receptionist was at any given time. They make clear who oversaw the money withdrawal. They know who recorded transactions. Everything is coordinated so the responsibility is clearly set. Pardon me if someone in the audience fits this description, I don’t recall, but people who have long worked in banks or were trained this way often have this strong thought tendency. That is why they need so many employees. They tend to grow and grow. It roots from their inclination to clearly distinguish responsibilities.

This is their only choice because it concerns money and they will be in great trouble if it disappears, like in the “Black Leather Notebook” (*1). If one person can take on multiple roles like counter work, making checkbooks and recording transactions, then it would allow them to cheat freely. Things from the “Black Leather Notebook” and “Pale Moon” (*2) can easily happen, which is why responsibility is narrowed in the real world and authority made clear.

At the trading firm I worked at, too, there were clear assignments of authority that indicated that transactions up to a specific hundreds of millions of yen, etc., were a certain person’s. Although they were not upheld and broken countless times. There was just a culture in the trading firm that people would not be punished as long as the results were well.

There were just the right times for victory, and when they came up, they could not just hold back. They had to take the chance. They think, “What if I don’t sell here?” “What if I didn’t close the deal now?” There are these times when they broke the rules, but when things ended well, they weren’t especially demoted nor promoted, and most of the time they would just get a slightly higher bonus. However, if these actions repeated and ended in multiple failures, people did tend to be demoted and pushed to the sidelines.

 

Employees Become Pawns of Large Corporations

Although I may seem overconfident, when I was working with a large bank in my twenties, the people there would tell me that they got the impression that they were speaking with the CEO (laughter).

Since I come forth with the mindset, “my thoughts reflect the company’s”, the banks are forced to consult through multiple layers of hierarchy, and unless I make a request to the main office, it was common to not hear back from them. There were times when they responded after a year. The many internal layers of approval systems create multiple reasons to decline. Time persuades the other to give in. While they debate for a year, they start to give up. There were many such waits. These were common occurrences because accepting the requests often resulted in disadvantageous outcomes to the banks.

I think there are differences in workplaces, but I was in an environment with relatively large discretion, so I had a similar mindset when I started my religion. Surprisingly, however, there were many people who made a mid-career transition from large companies (to Happy Science), so everyone had this kind of approval-waiting mindset that made them a pawn of a company.

There were many times when I assumed that “a manager of a famous company will understand this much,” “a section chief will know this” or “a branch manager can do this much,” and find out that they are completely incompetent. I would wonder, “Huh? You don’t understand this?” This happens because people cannot imagine doing work besides theirs. I was a little shocked by this. I think this happens everywhere and it is expected to a certain extent.

I think the Drucker style of using “moderately talented people for management” allowed multiple large corporations to form, but at a certain point a control center is needed. They need to be moderated by virtue or foresight or some other trait, but companies suffer if no one sees flaws from a larger perspective. You need someone who has the holistic view.

 

Personnel Change Reveals a Lot

When I was in my first year after joining my company, we were signing and passing around an announcement that had a list of all the internal personnel changes on a monthly or so basis. I read the company’s thoughts based on the personnel changes. “They’re probably thinking about this,” “The fact that this person disappeared while he was promoted might suggest something,” “Maybe the fact that they called them back indicates this.” I was able to perceive these ideas from personnel changes.

When I said this out loud, however, my seniors would chide me, “You’re overconfident,” “Shut up” or “A new employee shouldn’t think about this!” I would respond, “I’m sorry, I’m sorry for being too prideful,” but there is just this atmosphere. Things are just the way it is.

There was a keen person two years my junior, and that person also closely observed the personnel changes and said to me, “Sir, when he goes on a business trip abroad, the company always holds a board meeting, don’t you think?” “This person’s never there. When he receives orders to go on a business trip abroad, a board meeting is always held. It’s obvious that they are trying to keep him out.” There are some people who read this far into the announcements.

The person that seemed to be removed was an official dispatched from the Ministry of Defense. At that time, a trading company, Nissho Iwai, was seeking to deal with aircrafts, and was about to go into business with firms like Lockheed Martin and Northrop Grumman, then made a huge mistake that led to the arrest of the vice president and caused many suicides.
Naturally, during that time, each trading company made connections with the Defense Agency and the Self-Defense Force of the time, trying to become a purchasing agency to figure out which fighter aircrafts to purchase, so there was a lot of networking going on.

The trading firm used to save seats for people such as the directors of the Ministry of Defense after they quit government job, but they would not understand anything about work in trading firms. Since their purpose was to maintain a route and connection with them, it would be trouble if these people were in meetings, and meetings were intentionally held while they were on business trips.

I remember saying something along the lines of, “You have keen observation,” to my junior when he pointed that out.

A company works like that. Not just trading firms, but places such as the “Tokushima Prefectural Government” too, according to my father.

“You know, business trips are dangerous,” he would say while troubled by all the meetings that happened while he was away. There is not much that can be done if it even happens at a prefecture level. This is a small case, but things like this happen. My father would go to the central area near Tokyo every month, and he always worried that things would happen while he was gone. “Move while the demon’s away” (a Japanese proverb), or so they say, so I think it is part of human nature.

 

Create Teams That Support Each Other

Knowing that, I think it is a good idea to create a company in which ordinary people can rise through the ranks with proper experience and effort, but there are still some shortcomings. I think they still require some kind of coordinator, a virtuous person or someone with foresight that can predict the outcomes that might result from any inadequacy within the organization.

For instance, for a trading firm, there are around 20 branches that each deal with different products—steel, food, lumber, chemicals, etc.—and a person who worked for 20 years in the chemical branch will not understand anything about the steel end, etc.. They just would not. People who studied lumber would not understand other areas. People who always dealt with oil would not know about mechanics. There is no way they can.

For a general manager, however, their ability is evaluated for around two years, and when they are recognized, they can become an executive. They become an executive. However, at this point they are responsible for one branch, but as they climb through the ranks, they begin to lead three or so different sections. Obviously, they oversee various departments that they are not familiar with. Thus, they need to train and learn the key aspects through the job, reports from subordinates and self-study.

This is the basic structure. If one becomes a managing director, they need to have a larger view, and the Vice President who are usually split into two roles, one in charge of management department and one in charge of sales, each oversee half of the company, and there is the CEO on top. This is how it works.

In the end, since technical knowledge is so different, Westerners such as Americans and Europeans typically believe that a general trading company is not possible. There may be a few, but it can only generate up to 100 billion or 200 billion-yen worth companies (around one to two billion dollars). Thus, it is hard to believe that Japan is able to have these kinds of companies.

Our organization has a similar tendency because I try to reach out to various, different jobs simultaneously, but still, some people on the inside are so focused on their own works. Depending on how much they promote, they will need to have a little wider perspective. That’s something they need to brush up on.

 

An Eye That Can Observe the Whole Company

To do this, companies should select certain people who might have the potential to hold broad perspectives and have them jump around different departments, each for around a year, so that they can experience different departments and see the holistic company early on, instead of having expertise in one field.

I think I had a similar circumstance (when I was working for a trading company), because I travelled around the whole world in a year, but my other peer who started working at the same time said that “I didn’t move an inch.” I could clearly see that they were trying to teach me about the whole company. The recognition nourished allows people to analyze problems better, so they tried to do this.

Our organization operates in a similar manner as well. However, the system is not completely functional yet; people join at different timings, so it does not always work out. As people perform multiple jobs, I think they need to think about nurturing this macro perspective.

In any case, I started various projects for my mission, but if the project members only cared about their own work, then it would create a situation similar to the entangled octopus legs. I cannot chide everyone that worked for the project, but at least the higher-ups need to have a slightly higher recognition. They need to represent the conscience of the whole company.

If the people in the managements were fighting with each other, then it might be a sign that we do not have enough personnel. I think we need to continue improving in those aspects.

(*1) A novel by Japanese author Seicho Matsumoto. Made into a TV drama and aired in 2017 starring Emi Takei.

(*2) A novel by Japanese author Mitsuyo Kakuta. Made into a movie in 2014 starring Rie Miyazawa.