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On a certain Friday of each month, in the heart of Japan’s business district and within sight of the Imperial Palace, an elite group comes together for Japan’s most famous corporate meeting.
Around the table, as they have for decades, seated some of the most powerful business leaders in the country: the executives of the biggest bank, the biggest commodity trader and one of the biggest manufacturers. weapons, as well as manufacturers of everything from cars and air conditioners to nuclear reactors and space rockets. Its members are diverse, but are united by one name: Mitsubishi – once the most formidable of Japanese conglomerates, until it was dismantled after World War II to reduce that power.
Its Friday Club meetings, an open secret but a strictly closed-door affair, seemed to be one of the great enduring certainties of the Japanese company. But even them, admits Takehiko Kakiuchi, the chief executive of Mitsubishi Corporation and central member of the club, 65, have been suspended in recent months by a continuous rise in Covid-19 infections.
But what remains unchanged in these strange times, he says, is the supreme value his group places on information. Mr. Kakiuchi’s company, with $ 5 billion in annual profits, is the largest and most prestigious of sogo shosha, or general trading houses, which played a central role in postwar Japan’s economic growth by helping the resource-poor nation secure everything from Australian iron ore and Chilean copper to American soybeans.
In their role of importing raw materials and helping Japanese companies do business abroad, Mitsubishi and its rivals have built an extensive intelligence network and global presence similar to a country’s foreign ministry. .
“We know the situation in each country as there is not a single country that Mitsubishi does not know,” Kakiuchi said in a face-to-face interview at Tokyo headquarters, pointing to the group’s 1,700 subsidiaries and subsidiaries located around the world.
Mitsubishi’s keen antenna for international politics is no longer needed, Kakiuchi says, as Japanese companies attempt to navigate the post-Covid geopolitical landscape that has been disrupted by the US-China dispute and unrest in Hong Kong .
“You have to be a very international company to capture all of the global developments that are changing by the second,” he says. “We are working with various companies on where we want to take risk together, which country we should bring manufacturing operations to, and what kind of demand we should focus on capturing.”
Like most Japanese companies, Mitsubishi is relocating staff across the country and abroad at the start of the fiscal year in April, but global lockdowns and travel bans have made those transfers difficult this year.
Yet to ensure that Covid-19 does not reduce the group’s ability to gather intelligence, Mr Kakiuchi says he has made sure – even with delays caused by a two-week quarantine – that changes in high-level staff have been carried out in the two markets he sees at the heart of post-Covid risk management: the United States and China.
The divide between the world’s two largest economies has widened in recent months as Western countries clash with China over everything from handling the pandemic to technological dominance and Hong Kong’s status.
“Countries influenced by China will find themselves caught in the wake of the power struggle between the United States and China,” Kakiuchi said. “We have a long history of working with partners around the world, so our best way forward will be to stay as flexible as possible and adapt as needed. “
The coronavirus crisis is not the first time the group’s agility has been put to the test.
When Mr. Kakiuchi took over as chairman in 2016, the company had just declared its first-ever annual loss as its bet on Chilean copper collapsed during the global commodities rout. The biggest humiliation was ceding Mitsubishi’s number one position to little rival Itochu, which had managed to remain profitable during the 2016 crisis.
Mitsubishi returned to first place a year later, with Mr. Kakiuchi vowing never to give up first place again.
But over the next four years, the CEO took steps to reduce the group’s heavy reliance on its resource activities, setting a 30% cap on assets in his portfolio that are vulnerable to commodity prices. .
Three questions for Takehiko Kakiuchi
What is the first leadership lesson you learned?
When I was a new employee working in the sales division four decades ago, we would buy raw materials from overseas and sell them to wholesalers and dealers to get quick returns. But my team leader at the time pushed us to sell directly where there was real demand, which was quite difficult at the time. I’ve learned how it’s the way to learn the needs of real users, and it connects to what we’re currently trying to do with our digital efforts to connect with consumers. This is where my starting point is.
Who is your leadership hero?
I hesitate to give a real name. But one of my favorite words in Japanese is shisei, which is best translated as “sincerity” or “devotion”. It comes from one of the famous teachings of Yoshida Shoin, who was an influential scholar and philosopher during the later years of the Tokugawa hogunate (late 1850s). Basically it means that if you are dedicated and sincere in everything you do, no one will turn away when you need them most.
If you weren’t CEO, what would you be?
When I was in college I was very passionate about Japanese archery and ended up working at Mitsubishi. But once I joined, Mitsubishi became my passion. I don’t think I have any particular talent, but even if I had joined a company other than Mitsubishi I probably would have worked really hard and put my whole heart into the company anywhere.
Similar to a broader shift within the industry that has gradually transformed trading houses into private equity-type investment groups, the company has stepped up its efforts to absorb digital technologies and move into services more like private equity. consumer markets.
At the end of last year, Mitsubishi and telecommunications group NTT agreed to take a 30% stake in Here Technologies, a provider of digital cards for self-driving cars. In March, a Mitsubishi-led consortium finalized its € 4.1 billion acquisition of Dutch utility Eneco, known for its focus on low-carbon energy projects and its range of home energy services ranging from thermostats to electric car charging devices.
Despite the transition, the company is expected to be hit hard by the pandemic, especially with its negative impact on crude oil and metallurgical coal prices, as well as sales of cars and steel products. While Mitsubishi has yet to release its forecast for the year ending March 2021, brokerage firm Nomura already expects Itochu to overtake its rival in terms of net profit.
Yet Mr Kakiuchi says the coronavirus has also created opportunities, especially as Japanese companies realize their analog way of doing business is no longer working in the new era of foreclosure, remote working and virtual meetings with clients.
“Covid-19 has forced us to think about our traditional business practices and start looking for ways to better leverage digitization,” he says.
The transition also means that Kakiuchi’s expectations will be higher for the group’s 86,000 employees.
When asked what qualities he looks for in new hires, the CEO, known for being serious and straightforward, makes a long and ambitious list. They must be good judges of character; able to collect and analyze information; and willing to come up with their own ideas while having the leadership skills and charisma to attract people.
“They will have to think and act for themselves,” Kakiuchi said.