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Tadashi Yanai:

Plan for the Future to Survive in the Future


Plan for the Future to Survive in the Future

Source:Ming-Tang Huang

Will Japan's No. 1 specialty clothing chain Uniqlo continue to grow? How does Uniqlo founder Tadashi Yanai figure out what consumers want?



Plan for the Future to Survive in the Future

By Sheree Chuang, Ming-Ling Hsieh
From CommonWealth Magazine (vol. 457 )

What are his greatest concerns right now? What else is he up to? In an exclusive interview with Yanai in Japan, CommonWealth Magazine tried to uncover the dynamic entrepreneur's secret thoughts. Following are highlights from the interview:

Q: The Japanese economy has been in a recession for the past twenty years. Why is Uniqlo still able to grow?

A: No matter how bad the economy is, people still need to wear clothes. So which products in the apparel sector are sellable? Is a product selling well because of the Uniqlo brand, because of Uniqlo stores, or because of the company as such?

In other places certain products can only be sold if they are in fashion. Here in Japan, they sell probably because we pay attention to customer needs. We thoroughly consider what people expect from Uniqlo and then propose a plan for marketing the product.

Q: Customers generally consider material, function, price, and wearability. Are there any other factors that play a role?

A: There is a host of customer needs, not just one thing. You need to take into consideration the overall balance.

If it's only functionality, that's not good enough. If it's only good material, that's not good enough either. You need to strike a balance.

Q: Uniqlo's revenue target for this year is 1 trillion yen. This compares to present revenue of 800 billion yen. By 2020, your revenue is supposed to soar to 5 trillion yen. Is that possible?

A: I believe it's possible. The reason is that so far this revenue represents only business done in Japan, but now we have gone to Taiwan and China, and in November we will go to Malaysia, Indonesia and Vietnam. And it's not just the countries around Japan that offer a lot of opportunities – we also want to open stores in the United States and Europe. These countries should generate six times or seven times more revenue than Japan. If we expand across the globe, sixfold or sevenfold growth should be possible.

Q: Why are you so eager to grow your business?

A: People who don't want to grow, who don't have any vigor, are no good. They're not up to doing business.

Q: Uniqlo has also already expanded into Russia. But do you have enough talent?

A: I hope that Taiwanese talent can help us out. We hope that the employees that we recruit in Taiwan will be able to work worldwide. That's truly what we hope. Taiwanese talent speaks Chinese. Some also understand Japanese and can speak English too. Such talent is very suitable for globalization.

Taiwan is a small island with a population of 23 million people. If you want to expand your business, you cannot consider only Taiwan – you need to consider the global market outside Taiwan.

Q: How should Taiwanese job applicants who hope to join Uniqlo get prepared?

A: If you want to work at Uniqlo you must give some good thought to what the future of the company really is. You also need to ponder where you want to go in the future.

Q: Amid the current recession no one dares to draw up any business plans or set targets, because no one is certain whether they can achieve those targets.

A: You plan for the future to survive in the future. If you don't give it your best shot, it's impossible to always maintain the status quo and still be able to survive. If you don't think about what you want to become in the future, if you don't have this will, you won't be able to survive in the future.

Q: Why have you seen such dramatic changes in your life? In your twenties as a student at Tokyo's Waseda University you were living a rather aimless life. What made you so successful in later life? What happened in between?

A: Nothing happened at all. But I guess once you start doing business, your company gradually gets bigger. I guess it's fate. Good luck.

Q: What are your favorite books on management?

A: The books by Peter F. Drucker. My favorite book is Drucker's Innovation and Entrepreneurship. The entrepreneurial spirit is different from an entrepreneur's charisma.

Q: Why?

A: I guess it's that I am eager to do new things, but I also became an entrepreneur, so innovation is a must. This book is a very profound work on innovation and entrepreneurship. This book is a valuable reference for me in particular.

Q: Do you leave the office every day at 6 p.m. sharp?

A: Usually I want to go home around 4 p.m. or 5 p.m.

Q: Why do you think it's better not to work overtime?

A: You want to know why? Because after our headquarters moved from Yamaguchi Prefecture to Tokyo, our staff needs to spend about one hour on commuting. If you work eight hours a day, sometimes nine, plus two hours spent on commuting, that makes 11 hours. If you work overtime, then all you can do after returning home is sleep. If you go on like that, you'll damage your health, and family harmony will suffer.

But sometimes working overtime is unavoidable, because there are truly too many things that need to be done. Actually, as long as most people concentrate on their jobs during the day, they should also have sufficient time for family.

Q: Are there any points to which you're giving particular attention when opening the Uniqlo store in Taipei? Is there anything special you're doing in terms of product type, or display arrangement?

A: People in Taipei most likely know all about Japan. And since they have a very strong understanding of Japan, they also have a strong affinity for Japan. Therefore, we'll definitely take only the best Uniqlo products to Taipei.

Q: In the future the salaries of Chinese factory workers will probably increase. The value of the renminbi will also likely rise rapidly. There is also quite a severe risk of worker strikes. What will be your strategy regarding your contract manufacturers in China? Will you switch production to other countries?

A: No, we won't. I think China's the best place. Without a doubt, in China's coastal regions such problems exist. But there are also factories in the country's interior. No matter how you put it, there are 1.3 billion people living in China. Chinese workers are high-quality workers. Such a competitive advantage can't be randomly transferred to another region.

The Top Concern: Talent Cultivation

Q: What is Uniqlo's biggest concern at the moment?

A: It's talent cultivation. The training of managers in particular is most important.

Q: Is that an easy task?

A: I'm still pondering how to do it, because it's very difficult.

Q: Several of your Super Star store managers told us that they have been attending training courses at headquarters recently. Are you teaching these courses? (Note: Super Star is the top rank of Uniqlo store managers.)

A: I participated in the FR MIC courses a few times. (FR stands for “Fast Retailing” – the parent company of Uniqlo – and MIC stands for “Management Innovation Center,” which was established at the beginning of this year inside the company headquarters by Yanai and professors from Hitotsubashi University in Tokyo.) Everyone needs to come out and take some classes. What kind of courses do we offer? We offer many different classes, particularly on management. Learning is essential.

Q: How many people participate in these courses?

A: At least ten, sometimes as many as 100 people. You need to spend about three to five years to train 200 managers.

Q: Will you be able to do that before you turn 65?

A: Yes. When I turn 65 I want to resign from my position as company president. In order to make this possible, I definitely need to start cultivating managers now.

Q: What are your criteria for picking managers? What qualifications must a person have to take over your position as company president?

A: I'll select a person who has the capability to make the company grow, to make it make money, and to let employees, suppliers and shareholders reap profits. There should be somebody who meets these criteria. If you regard yourself as an entrepreneur, you should be able to live up to these requirements, shouldn't you?

Q: Why does your store expansion focus on countries in Southeast Asia?

A: These countries are all developing countries. After these emerging countries become the center of growth, then they'll become advanced nations. So it's only natural that we go to countries that will grow in the future.

Don't Force Yourself

Q: What is the happiest part of your life?

A: Being able to always live in very good health, isn't it? Isn't it a great joy in life if you are able to work happily?

Q: What do you do to always do your job with full energy and still stay healthy?

A: I think you shouldn't force yourself to do something. Not forcing yourself is one of the great joys in life. I've never forced myself to do things.

Q: Is it because of good luck? Or because of hard work?

A: I think it's both. Luck comes to those who make efforts to spur themselves, who get prepared beforehand. Luck won't come to you all by itself. If a person only waits and doesn't make an effort, luck won't come their way.

Q: You are leading a very busy life. Can you please tell us how you spend a typical day?

A: I get up at 5:30 o'clock in the morning, leave my home at 6:30 and arrive at the company before 7 a.m. I return home around 4 or 5 o'clock in the afternoon. After returning home I read books and watch TV. Then I'll do some more work at home. On Saturdays and Sundays I play golf. That's what my everyday life looks like.

Make an Effort on Your Own

Q: Which TV programs do you watch?

A: I watch the movies and news programs they show on TV. American movies, and so on. I often watch American films. They make American movies in a way that they're liked around the world. That's really amazing.

Q: A new business that you founded – organic farming – has failed and has been closed down, right?

A: Yes, it was a complete failure.

Q: Will you develop new fields of business in the future?

A: Rather than exploring new business fields, I would say that our new business right now is establishing Uniqlo outlets around the world.

Q: Could you foresee yourself looking for a successor outside the company?

A: There's no way that we'd look for a successor from outside. We'll look for the next CEO from among our own ranks.

Q: Could a Super Star store manager become your successor?

A: Of course.

Q: What did you think about as a university student?

A: When I was in college, I didn't think about anything. I wasn't different from the students today. My situation was still okay, because my family had a business. The young people today are still working as freelancers even after turning 30. There's no future in that.

Where do I want to go? What do I want to do? Life only lasts a few decades, doesn't it? If you can't state clearly what you want to do at the end of your life, if you only do temporary jobs throughout your life, then your life is not very meaningful.

Q: What kind of talent are you looking for?

A: Since we are in the service industry, we need people with a service attitude. No matter what other industry people come from, as long as they have a service attitude they can be trained in all the other areas. The most important thing is whether you honestly want to become such a person yourself. If you do, then you have to aim in that direction, and make an effort on your own.

Q: Why do you have such a strong willpower?

A: In this world, no one can teach you. You must make an effort on your own. It won't work if you don't make any effort by yourself.

Translated from the Chinese by Susanne Ganz