From Family Business to Drucker School: A Talk With Koji Ogura (EMBA, ’11)
For nearly 10 years, Koji Ogura has been a part of the Drucker School family as a student (he graduated from the Executive MBA program in 2011) and as a staff member (he joined the School as Director for Japan and Drucker-Ito Relationships in 2015).
Long before that, Ogura was an executive with Yamato Holdings, a Japanese company founded by his grandfather in 1919. Approaching its 100th anniversary, Yamato Holdings has 200,000 employees and reported annual earnings of about $12 billion. Ogura served as president of its subsidiaries Yamato Transport in Japan and Yamato Transport USA, and he says that family businesses are vitally important not only in Japan but globally, too. Now, as the Drucker School of Management launches the Global Family Business Institute, Ogura says this is the ideal time to position the school for leadership in this enormous segment of the world economy.
Why is management training for family businesses so important for the Drucker School?
Take a look at the numbers. There is huge potential for us there. When you look at the U.S., you see that 50% of businesses are family businesses. That percentage is even higher in China, where they make up 85% of businesses. In Japan it is even higher at 97%. It is important to find new markets like this one to leverage, and this is a very good one for Drucker.
What is your role with the Drucker School?
My job is to enhance and build the awareness and reputation of the Drucker School in Japanese society. The name of Peter Drucker is already very strong in Japan, and we want the school named after him to be just as strong. I use the professional networks I built during my career with my family’s business to help us to achieve this goal. I worked for my family’s company for about 26 years, so I have good professional relationships.
Most people don’t realize that there are important differences between family-run and publicly-held businesses. For you, what are some of the most important differences?
I would say that it depends on what category of family business you are talking about: Type 1 or Type 2.
What is the difference?
Well, the Type 1 family business tends to be smaller and is owned and run mostly by the family members. Because of that situation one unique challenge they have is that the power of the founder is very strong. Everything depends on that founder or the founding family. The function and culture of the company have been shaped by the founder. This may not create challenges for a long time, but when the company’s management is ready to move from the founder to a younger generation of the family, problems may start. When succession happens, sometimes the older employees do not like what the younger generations want to do because they sometimes want to handle the company in a different way.
How are the successors different from the founder?
They usually use more management theory than the founder does. What you find with the founder of a company is that they use more intuition than theory in making their decisions. They know what will work and what won’t because they have built everything in that company with their own hands. But the younger generations of the family may come along and want to try something new. They may introduce theories and ideas that the company culture doesn’t expect. This can cause challenges if it isn’t managed correctly.
You mentioned that there is a Type 2 category of family businesses. What are they like?
These are family businesses that have grown much larger (like my family’s). Family members are still involved in running the company, but the company is also publicly listed, has shareholders, and there are many non-family members who are involved, too. Look at Toyota. The current CEO is Akio Toyoda, who is a descendant of Toyota’s founder, Sakichi Toyoda. But of course there are many other people involved in the management as well.
Why do you think the Drucker School’s new institute and training programs will appeal to the members of family businesses?
In Japan what often happens is that students graduate from college, but they don’t go directly into their family’s business. Instead, they go to work for another large-sized company in the same or similar industry so that they can learn about the industry and practices. On-the-job training is not always very good because they don’t learn any theory and sometimes they experience company cultures that are not beneficial either. I think our new Global Family Business Institute will address this situation for the students I want to recruit. It will offer them a better alternative.
In what way?
Our institute will give them a substitute for just leaving college and going to work for a single company. Instead, they can come here to the Drucker School and spend time in executive and management training and learn the important theories that they are going to need as leaders. In the process, we will also give them more of a global sense of how family businesses work in the world economy. That is something you cannot get with on-the-job training in one company. But you can get that at the Drucker School.