Posted : 18 October 2011 Leadership in times of crisis By Favian Ng
Yamato Holdings' President Makoto Kigawa
SINGAPORE: On March 11, a massive earthquake and tsunami hit the northeastern part of Japanese island of Honshu.
Over in Tokyo, Yamato Holdings' President Makoto Kigawa and his board members were watching the catastrophic events unfolding.
Right after the tsunami attacks, they made the first key decision - stop accepting parcels for/from all Tohoku region, Hokkaido, and Ibaraki prefecture and began on a mission to restore their embattled supply chains.
"Our first mission was to restore Yamato's last one mile network to revitalize logistics and delivery channels in devastated areas," said Mr Kigawa, who was in Singapore on October 13 to deliver a speech at the NUS Business School.
With over 170,000 employees, Yamato is Japan's largest logistics company, owning over 40 per cent of market share.
During the March 11 disasters, out of 269 sales offices in the Tohoku region, 17 were destroyed and roughly six per cent of the network was disrupted, causing major problems to both manufacturing industries and home consumers.
"Although disruptions in the supply chain of manufacturing industries such as the auto industry garnered much attention, the supply chains for food and daily essentials, those closest to consumers, was also significantly affected," said Mr Kigawa.
Ten days after the earthquake, Yamato was able to restore their operations and currently only four offices, which are located near to the Fukushima plant, remain closed.
Mr Kigawa revealed that the turnaround could have been shortened but he felt that it was important for the local staffs in the affected areas to make the call.
"As a CEO, it is very risky to make decisions with limited information. It is important to give some authority to the local people who are facing the situation. The outcome is another issue. If the outcome is not so good, the CEO will have to take the responsibility. But it is very crucial for the local people to take the initiative.
"During the Japanese earthquake, it took 10 days for them to start operating. But if I have given the instructions from Tokyo, the commencement date to start the operation will be faster but I felt it was very important for the people there to take initiative on what to do for the locals."
Yamato has cultivated a culture where workers are accustomed to making decisions on their own, even the truck drivers at the front, when the situation required independent action.
This helps to limit damage to operations to the minimum and in addition, immediate and effective help could be provided to many victims of the disaster.
Mr Kigawa attributed this to the company's corporate philosophy - 'We all represent the company; we are employees of the customer; we have a positive influence on society.'
Yamato Holdings has provided 200 vehicles and 500 logistic specialists on a volunteer basis to provide urgent aid to victims
The next mission was to provide urgent aid to victims affected by the disaster and rebuild the community.
This is carried out through Yamato's Takkyubin infrastructure which acts as an "Urgent Relief Aid, Logistic Support Team", providing 200 vehicles and 500 logistic specialists on a volunteer basis.
As part of its medium-term and long-term management plan starting in 2011, the Yamato Group has set a goal to venture into locally-oriented and consumer-oriented business domains and to revitalize local communities and help resolve the challenges of the disadvantaged.
"It has been great inconvenience to people living in disaster-affected regions, especially those who are unable to drive, shopping for daily essentials. If local shopping streets were located in these areas, then the flow of goods may have been restoring more quickly. For this reason alone, we are strongly aware of the need to revitalize Japan's shorting streets," said the 62-year-old.
After witnessing the extent of devastation, Mr Kigawa made a decision to contribute a donation to the relief effort. Yamato will contribute 10 yen for every Takkyubin parcel they deliver in Japan.
The figure could amount to 13 billion yen based on Yamato delivery results for fiscal 2010.
"It will be fully transparent, Mr Kigawa promised. "The funds will be used for the reconstruction of the local infrastructure used by everyone affected by this disaster such as hospital, schools and preschools and also revitalized fisheries and agriculture, two major industries of the areas."
This, he said, is to show Yamato's gratitude to these industries which have helped to drive the company's growth over the years.
During the talk, Mr Kigawa was asked the differences in leadership styles between Asia and the West.
"Leaders shouldn't force the workers to listen to whatever they want to do. In the Japanese culture, this kind of method doesn't work. It may work in other Western or Asian countries where they can force their way and implement their way but the ultimate aim is still to gain respect from the staff as a human being."
Mr Kigawa also stressed that a leader needs to have the courage to reflect on his actions and if necessary, to apologize, when things go awry.
"A leader should reflect upon himself. What he thinks may not be 100 per cent correct. When he makes mistakes, he must have the courage to make a U-turn or do some modification in his thinking.
"A leader also shouldn't be changing policy every day. He has to keep saying what he wants to do but when he realized his mistakes, he has to say sorry and change directions."
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In Yamato, Mr Kigawa bears the responsibility even if a staff is responsible for the wrongdoing.
"Yamato has 170,000 staff. Whether it is good or bad, something will happen every day and the leader has to take responsibility. Of course the person who did something to threaten the reputation of Yamato will be responsible. But on top of it, the top person has to take the responsibility, this is the Yamato culture."
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Leadership in times of crisis
Yamato Holdings' President Makoto Kigawa demonstrates the importance of strong leadership as the company emerges from the March 11 disasters.
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