IMPACT Interview: Heizo Takenaka (Part 3/3) There are some things even the prime minister can’t do – that’s why we need entrepreneurs

2016/07/19 | By IMPACT Japan


Third interview: Mr. Heizo Takenaka (final portion)
There are some things even the prime minister can’t do – that’s why we need entrepreneurs

Third interview with Mr. Heizo Takenaka, the economic policy expert, as guest. What characteristics should an entrepreneur have? And why is the world so eager for more entrepreneurs? Here, we explore in depth what kind of a leader will lead the world.

Heizo Takenaka
Born in 1951 in Wakayama Prefecture. Took up posts as a professor at Toyo University and emeritus professor at Keio University from April 2016. Held successive positions in the Koizumi administration over a period of 1,980 days, including serving as Minister of State for Economic and Fiscal Policy and Minister of State for Privatization of the Postal Services, thus recording the longest consecutive period of tenure of any state minister following World War II. Since announcing his retirement from politics, he has energetically engaged in government-related work, including serving as one of the expert members of both the Industrial Competitive Council and the National Strategic Special Zone Advisory Council, as well as holding positions in the private sector such as Chairman/Director of Pasona Group Inc., Director of Roppongi Academyhills, and Outside Director of Orix Corp., and he is working committedly to develop industry and train human resources.

William Hiroyuki Saito
A second-generation Japanese-American born in California in 1971. Special Advisor to the Cabinet Office for the Government of Japan. An entrepreneur himself, he sold one of his businesses to U.S. company Microsoft Corp. in his 20s. William is currently active in nurturing next-generation leaders, and serves as Chair of IMPACT Foundation Japan, an independent legal entity that he set up. IMPACT Japan Foundation plans and manages the INTILAQ Tohoku Innovation Center as a base for activities by the Qatar Friendship Fund.

Japan as a whole is becoming middle-aged.
We need leaders who can overcome the pain and lead reform.

William Hiroyuki Saito (below, William)
Nurturing entrepreneurs is a crucial issue that organizations are dealing with worldwide, not just in Japan.

But Japan is having a hard time developing a system that makes it easy to produce entrepreneurs. On the contrary, it is mass-producing people who do nothing but fear failure. What can we do about this?

Heizo Takenaka (below, Takenaka)
They tried to conduct an evacuation drill at a nuclear power plant in Niigata but there were people who opposed it because they thought it would worry the local population. The drill ended up being cancelled. Sure, this ensures a sense of safety for now, but is this really safe over the long run? Mr. Nobuyuki Idei from Sony told this story at the annual World Economic Forum in Davos and said that Japan as a whole is becoming middle-aged. I’m now in the process of transitioning from middle age to old age, but as you gain a certain amount of experience, it becomes a bother to do new things, you know. Change becomes bothersome. I know I haven’t changed, which makes it even more bothersome.

You cannot change because you are worried but you are worried because you have not changed – this is the negative spiral that Japan has fallen into, isn’t it?

In order to overcome this sense of stagnation, we need a leader to emerge that tells everyone that reform is necessary and that we must overcome the pain that comes with it, and convince them that this must be the case, right? But here, it may be the case that a psychological trait unique to us Japanese is getting in the way, namely the way we prize the “ma,” or the relationship “between” people.

A culture that prizes the “between,” is a source of the resistance we see to major changes.

You and I have discussed in the past the issue of the Japanese people being too considerate of others. I think foreigners have felt impatient on more than one occasion because everyone in an organization says the same thing and things do not move forward easily.

The English term for a person is “human being.” But in, and only in, Japan and Korea, the term for humans also includes the character “ma,” or “between.” The sociologist Eshun Hamaguchi termed this “kanjinshugi,” or “human betweenism.”

In the United States and other normal countries, people maximize their own satisfaction when they do something. But in Japan, maintaining the relationship between people and maximizing the relationship between people is the priority when taking any kind of action.

That is why the Japanese language has so many words with “ma” or “between” in them. When you get the “ma” or “between” wrong, you “machigau” or “make a mistake.” When you drop the “ma” or “between” you “maganukeru,” or look silly. There’s also “magawarui” meaning “awkward” and “magamotanai” meaning “have nothing to fill the time.” They’re all about “ma.”

In a sense, this is one of Japan’s virtues, but it is also undeniably a source of Japan’s resistance to change. I am not saying that this means that we Japanese cannot become entrepreneurs, but we do have to change the way society is, the way businesses are with the understanding that this peculiar problem exists.

Then what is it that a leader needs to pilot an organization among the Japanese, who place too much value on the “between”?

The words that I often use to encourage young people are “passion” and “strategy is in the details.”
Passion means an overwhelmingly powerful desire. For example, as shown by the examples of the Three Musketeers of the venture world that I mentioned previously, the important question is whether or not the source of the CEO’s dreams is clear, and whether or not the CEO’s passion for this dream is shared across the organization. If the CEO’s passion permeates the organization, and everyone can tell for themselves whether a proposal will receive the CEO’s support or whether something is a piecemeal idea that will only make the CEO angry, then they will all outperform themselves through their all-out efforts to keep pace. That’s why passion is so important.

However, it is also necessary to have the levelheadedness to know that strategy is in the details. In every business there are certain things that must be done properly or everything will go wrong, and certain things that ensure everything will be fine, as long as those things are done properly. These are crucial points in the decision-making process.

Applying passion and levelheadedness at the right times is key when thinking about innovation in large organizations such as the government.

Go to the balcony.
And praise the successful.

The broader point to be made is that entrepreneurs must manage their own risk.

Whenever you try to do something new, there will always be enemies and resistance. You can be targeted at the very moment that your project is about to succeed. If you are going to introduce something different to an organization or society, or do something new and different, you need to leverage all of your abilities as a human being.

It’s a society where there is an enormous amount of criticism whenever someone tries to do something new, isn’t it?

Criticism going both ways, in fact!

There’s an expert on leadership at the Kennedy School at Harvard named Ronald Heifetz, who often uses the phrase “getting on the balcony.” Of course you must perform the task before you diligently. But it’s also important to go up to the balcony and get a bird’s-eye view, an overview of yourself. Then, you can see the risks clearly. You may realize that something that you had thought was important is actually not so important. You may also realize that a problem that you hadn’t taken seriously is actually important. Having a view from the balcony means having a perspective that is different from those of everyone else.

I’m certain that from your talk today many readers have been made aware of new perspectives – ways of thinking that they did not previously have. Finally, could you send a message of encouragement to our readers who are aiming to become entrepreneurs or to help people become entrepreneurs?

I’ve done a lot of talking here, but when you consider what I did, I haven’t done much, you know!

After serving for five years and five months alongside the prime minister, the most powerful person in the nation, I realized that there are things that you can do and things that you can’t do even if you are the prime minister. I like to think that I did everything within my power as a cabinet minister, but there were still things that I could do and couldn’t do.

At the end of the day, what a single person can do is limited – all the more reason for each and every person to do what he or she can do within their own worlds, within their 10 meter sphere of influence, and to bring entrepreneurship to the challenge. The more people there are who harbor such aspirations, the better off the world will surely be. That is what I believe.

That’s why we have to create world in which successful people are lauded, not a world where successful people are punished and those who fail are denounced. Successful people should also encourage others to follow a similar path to them but in Japan, at least in the Japan of today, anyone who would do that would certainly be subject to a great deal of criticism. But wouldn’t it be nice if Japan could become a place where successful people could do so with pride?

We have to change this and change ourselves, don’t we? You’ve inspired me to do even more personally to help.

Thank you very much for your time today.

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