>> MIM Speaks
WELL AHEAD OF HIS TIME
FEB 16, 1997
THE STAR
By S. Hadi Abdullah
KONUSUKE Matsushita was 22 when he became the youngest
inspector in his company. His jubilation, however, was
short-lived. He became disillusioned with his job because it
was not challenging enough. He had far too much free time.
Though newly married, he decided to go on his own. With two
friends and his brother-in-law, he started a small company
making sockets with a capital of only 100 yen.
Housed in a tiny two-room setup in Osaka, he and his wife
slept in the corner of the smaller 4-sqmeter room. After four
months of struggle, they managed to sell only 100 units,
bringing in a sum of 10 yen. His friends left him.
By now, his wife was making frequent visits to the pawn shop
exchanging what they had, including her kimonos, for cash.
Fortunately, an electric company gave them an order to make
insulator plates for fans, which saved the situation.
It was from here that Konusuke Matsushita set about building
his mighty Matsushita Electric Company. This self-taught man,
with barely four years of elementary education, professed and
practised enlightened management and philosophy which is as
relevant today as it was during his time.
Malaysia's business ventures are moving at a fast pace. This
pace has given rise in some places to short-cuts, gross
self-interest, environmental degradation and materialism.
Perhaps Konusuke Matsushita can awaken some of our inner
feelings.
The youngest of eight children Konusuke was born on Nov 27,
1894, in the village of Wasamura, near Wakayama. His father, a
landlord, had lost the ancestral home and land through
gambling in the commodities market.
Further misfortune befell him when he lost his two brothers
and sister, making him the heir. At the age of nine he went to
Osaka to work as an apprentice in a charcoal heater shop. He
had to do odd jobs, clean the floor, look after his master's
children and run errands.
The work itself did not bother him, but "it was the loneliness
I found hardest to bear; I could not help thinking of my
mother" and he "sobbed silently under covers" at night.
A year later, he joined the Godai Bicycle Shop as an
apprentice. Soon after the apprenticeship in the bicycle shop,
he joined the Osaka Electric Company as an assistant to a
technician. Through his hard work, he was promoted to
technician.
Within the next three years, he rose from supervisor to
inspector. But while others envied him, Matsushita was not
happy, he felt that the job was not challenging enough.
He was falling ill frequently. He attributed this to a kind of
"malaise of mind and body that comes from lack of stimulation
and sense of accomplishment."
This feeling of wanting to work hard and have a challenging
job made him quit his "good" job. This craving for challenge
and hard work lasted throughout his lifetime.
Matsushita was by nature a sickly person. He succumbed to
bouts of cold and was bedridden often. It was during these
times that he reflected upon his life, job and ambition.
Unlike most people, he did not bemoan his ill-luck but turned
a problem into an opportunity. This habit of reflecting while
convalescing became part and parcel of his life. It was during
one of these bouts of cold that he decided to have a go on his
own.
His acute sense of business and foresight was marvellous. Even
as an 11-year-old apprentice, he saw an opportunity when
customers who came to repair their bicycles often asked him to
buy cigarettes for them.
He did not like the idea of being drawn away from his work.
Therefore, he used his own money to stock cigarettes, ready
for his customers, and made some profit doing so.
At the age of 13, he sold his first bicycle. Around this time,
he observed that rail lines were laid everywhere in Osaka. He
realised that the "luxury" bicycle would not last long and
therefore decided to move into an industry that was going to
be important in the future.
Thus he embarked on a career in electricity at the age of 17.
Matsushita was humble, simple and frugal. From the outset, we
see him use his workshop to the optimum. He turned his first
singlestorey shop into a two-storey setup.
Extravagance was not in his vocabulary; he preferred to go to
work by train, even when he was doing well. He bought his
first car during the depression because it pained him to see
so many car salesmen suffering; of course he made sure he got
a good deal for it.
The government was embarking on a policy of austerity but he
believed that "a policy of austerity will never bring
prosperity. I began to feel a growing conviction that the
fundamental principle of national economic growth was to
increase, not decrease, production and consumption."
Matsushita was a risk-taker; he likened business to
traditional sword fighting. One cannot back out. If one is to
be successful, one must always win.
If an enterprise does not grow, it may be mainly due to flaws
in the methods of management. He opines: "It is during bad
times that the good manager lays the foundation for future
growth." This is a thought that many of today's managers can
consider.
His innovative and novel ideas coupled with his risk-taking
nature made him a sure winner. When his business was just
beginning to pick up, he put the whole works on the block, as
it were, when he embarked on his bicycle lamps.
His sockets were selling well when he struck on the idea of
making his own bicycle lamp. "The light I had on my bicycle
was an old-fashioned candle lamp and its flame was easily
extinguished."
On windy nights, he, like others had to get down and relight
the candle. "I began to wonder if it might be possible to
invent a lamp that would not go out."
After numerous trials, he finally produced a bullet-like lamp
that was battery operated and which lasted between 40 and 50
hours.
However, when he tried to market it, dealers and retailers
were not keen to buy it. He approached the bicycle shops and
received the same reply.
By now, he had already ordered a large number of casings from
a subcontractor and his own factories were mounting thousands
of lamps. Stock was overflowing. His whole business was in
jeopardy.
This was when he decided to send salesmen to retailers, where
they left the battery-mounted bicycle lamps on as a
demonstration of their utility and durability. He was prepared
to put 10,000 of these lamps at a cost of 15,000 yen.
Customers started enquiring, which led the retailers and
dealers to stock the lamps. Soon, the lamp became a
best-seller, with production reaching 10,000 units a month.
It was the same story with the square battery-powered lamp,
called the National Lamp. He gave away 10,000 of these lamps
as a demonstration and managed to convince his battery
supplier to do likewise by assuring him of 200,000 battery
sales within eight months. Sales topped 470,000 instead.
Recollecting this, he said that it gave him great satisfaction
and pride when the owner of the battery shop, a Mr Okada,
visited him during the new year and praised him for his bold
move.
Matsushita had a knack to see what could work. The ability to
take bold decisions is another characteristic that one can
learn from him, besides, the encouragement of innovative ideas
is all the more relevant today.
Matsushita challenged the obvious, he did not accept forgone
conclusions. The making of the "National" radio illustrates
this point well.
He recollected that in 1925 radios broke down often. Radio
manufacturers accepted this as normal and kept on insisting
that all radios had this fault.
Matsushita approached a well known radio manufacturer to make
a good radio which would carry the brand name National. An
arrangement was made, radios were sold in the open market. To
his utter disappointment, they were breaking down by the
hundreds. The company name was at stake.
He approached the manufacturer, who told him that radios could
not be made better and that was how they were. Matsushita
could not accept this.
Although he was not an engineer and engineers were telling him
a better product could not be made he demanded that his
researcher Tetsujiro Nakao and his R&D people produce the
'ideal" radio.
Within three months, this team produced a radio that won the
Japan Broadcasting Corporation's Best Radio award and went on
to become a best-seller.
Businessmen during his time did not teach their people all the
important technical know-how. Matsushita thought this was
wrong as it "stood in the way of rational management." He
taught his workers all he knew. This gave him a distinctive
advantage over his competitors. He felt that trust begets
trust.
He noted: "Probably because of my attitude towards managing a
business - then and now - my relationship with employees went
smoothly, and our firm expanded at a more rapid pace than that
of other manufacturers of similar products."
This ability to challenge the obvious and trail-blaze new
frontiers is all-important in today's management practice.
Throughout his active life, Matsushita could spot people and
ventures with potential. In his numerous writings, he
attributes much of his success to good employees.
At the inception of his business he had taken in his 15 year
old brother-in-law, Toshio Iue, to help in the business. His
guidance and coaching was so good that lue later founded Sanyo
Electric Company.
He identified his engineer scientist, Nakao, who was involved
in many of Matsushita's inventions from the bicycle lamp and
the super iron to the "ideal radio" and others.
His appointment of Yamamoto Trading Company as the sole
distributor in Osaka eventually led to sales from 20,000 yen
to 50,000 yen a month.
Masaharu Matsushita, his son-inlaw, was another staff member
whom he guided to take over the presidency in 1961.
On his visit to Europe in 1951, he initiated a joint-venture
with Philips by establishing a new firm called Matsushita
Electronics Corporation with 30 per cent Philips equity.
Among the things Philips asked was a six per cent technical
guidance fee. Matsushita managed to reduce it to 4.5 per cent
while convincing the astonished Philips negotiators to pay a
three per cent management fee in return.
The company started producing bulbs, fluorescent lights,
transistors, television picture tubes and other components
that could be used by Matsushita Electric.
In 1953, he took over Victor Company of Japan (JVC) even
though it had huge debts. This was because he felt that it had
a good image and outstanding technology that he could use.
The ability to spot good working partners and strategic
alliances is making many companies forge ahead today.
When asked how he felt when he ventured into business,
Matsushita had this to say: "My hope of success was stronger
than my fear of failure. I was excited heading into a new
world and new experience."
That was positive thinking at its best.
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