CHAPTER 6

Taki Gakuen and Asking the Simple Questions

In 1928 my grandfather, Nobushiro Taki, established Taki Gakuen, a school near his hometown. His mission was to educate the countryside. He yearned to develop sophisticated and well-versed farmers as well as businessmen. The school had two primary curricula—agricultural and business courses—to accommodate the needs of local students. The school’s funding derived from my grandfather’s investments in Korean chestnut and apple farms, as well as a substantial interest in the Northern Manchurian Railroad. The fruits of these business interests allowed Taki Gakuen to offer local students almost tuition-free matriculation to our private institution.

My father assumed responsibility for the school when my grandfather passed away. After this shift, the end of the Second World War ushered in a wave of new problems. The school’s financial stability was challenged for the first time in its history as the Korean government claimed that the school’s farmlands were in Korea and the Northern Manchurian Railroad was usurped. The Korean property went under the control of the UN and Inner Manchuria was returned to the Republic of China. This return of property caused a great deal of fiscal strain on the school that my father had to address. For the time my father was in charge, he did his best to maintain my grandfather’s vision while beginning to adapt the school to a more modern pedagogical approach. However, everything was turned upside down again when my father passed away unexpectedly. With the torch then passed to me, I was forced to confront these problems with even fewer available resources.

In a short time, I had to make a number of quick business decisions to keep the school afloat. After careful investigation, I found that the two curricula weren’t working. From the 1930s until the 1950s and 1960s, we witnessed many social and environmental changes, particularly in the suburbs of Nagoya. Developers rezoned and built on top of what was once farmland to create housing to accommodate burgeoning demand. Students didn’t want to learn how to farm now, so this curriculum no longer fit the region’s demographics. As a result, the agricultural program was very costly to maintain. The faculty/staff-to-student ratio was approximately 12 to 5. The teachers we had consisted of breeding specialists and all different kinds of veterinarians—doctors whose educations demanded a higher pay scale than liberal arts teachers with master’s degrees. There was no upside to supporting the agricultural division, so I decided to shut it down.

When my grandfather established Taki Gakuen, Nagoya had yet to industrialize in the way it did just before and during the Second World War. This city was a region of local farmers then. The soil had been rich and fertile because the land had once rested at the bottom of a river bed. In fact, the land had once been used to meet most of the agricultural needs of the surrounding areas. However, the presence of industry mushroomed. Increasing numbers of light industries began to populate the area and agriculture began a steady decline. By the Second World War, Nagoya was renowned for heavy industry—particularly in the manufacturing of airplanes and cars. The paradigm shift that occurred in the city made teaching agriculture nonsensical.

Although my father had added a college-prep curriculum during his administration, this program was not attracting the deserved attention. We had very few applicants when I took over the school, so each senior faculty and staff member was forced to recruit family and friends to enroll for the first couple of years. Even though word of mouth is often the best form of advertising, it wasn’t working in this particular instance. There just wasn’t enough demand, and the school needed a new philosophy. So I sought other ways to transform the institution.

I knew that increasing the number of applications and improving the quality of education would go hand-in-hand. Being able to gain Taki Gakuen’s students admission into the best colleges and universities would build the reputation we were seeking. With that as our goal, I saw avenues of necessary improvement for the school: a superior faculty and a robust, comprehensive curriculum. I started a new hiring initiative that centered on searching for the most capable teachers, rather than those with a fancy résumé. From my experience as a beneficiary of Japan’s best schooling, I had learned that no matter how brilliant a scholar, there are other elements that make someone a brilliant teacher.

I ordered the deans and assistant deans to hire seasoned, experienced teachers and offer them 50 percent more than the salaries they were making at their current institutions. I dropped the business curriculum and focused more on a liberal arts education—the courses found in modern preparatory schools. This pedagogy seemed more appropriate and advantageous to our students’ future. I reasoned that the entire school should become a model prep school for the region.

My next approach was subjective. I asked myself as a parent and a consumer what I and others would want from a school. The answer was fairly simple: to make Taki Gakuen the best option for the most applicants. If good universities and colleges accepted Taki Gakuen’s students, the alumni body would become that much stronger, and the number of future opportunities would grow each year for every graduate. Some distinguished graduates would return to Taki Gakuen to discuss their successes, which would uplift the morale of both students and parents. In addition, students would learn about different career options from these talks and gain inspiration from those who had realized their own dreams. My mission was to instill hope backed by motivation, ambition, and diligence.

After I’d planned and executed the school’s rescue plan, the situation at Taki Gakuen dramatically improved. Today, the school sends some of the brightest and best of Japan to top colleges and universities. The foundations of this story echo my theory of management; this is the reason I bring this anecdote to light. Because I was more interested in interacting with the school as a business that had customers who were demanding satisfaction, I could accomplish my aims. I wanted to run the school as a better company—one that offered the best products and services.

Creating new means to sell the school to parents, however, was easier for me than reorganizing the school. In the traditional Japanese corporate world, the company is your family. In many cases, the company’s needs can take precedence over the employee’s family’s emotional needs. The company hires an employee and learns his or her strengths and weaknesses; then the managers train and place the employee in the position best suited to his or her skill set. Although Japanese corporate culture is changing, one thing remains the same: in a traditional company, you are never fired once you’re hired. In other words, the shift in pedagogical implementation addressed only one of the problems the school was facing. After closing the agricultural division at Taki Gakuen, I had a large number of faculty and staff for whom I needed to provide work. It was my obligation as headmaster of this corporate yet also familial institution to find new assignments for those no longer employed.

The most difficult faculty members to place were the small-animal veterinarians, since the large animal vets found new positions at nearby zoos. I approached this problem by asking the small-animal veterinarians to open a new pet hospital; however, they refused because of certain territorial agreements they had with the regional veterinary association. A new small-animal hospital in the area would take business away from existing ones—and there is an unwritten code among the veterinarians against doing this.

The next step was to ask the veterinarians about their fields of specialization. Two said they had a special technique to hatch chicken eggs. So the vets began planning our new chicken business. They were bright and ambitious; they knew a lot about genetics and how to breed the best chickens for eggs and others for meat. They suggested we buy a few American chickens to breed, because they were better suited genetically for egg production than native chickens of Japan. Although buying American birds and shipping them to Japan might sound like an expensive way of doing things, the overall costs in maintaining the chickens were much lower because of their genetic differences. Our goal had been to find or create a breed with the best feed-to-chicken ratio for the egg layers—and we were able to meet that goal by using the newly acquired American chickens.

Meanwhile, I asked my brother Yasuo, who had recently graduated from Keio at that time, about his future plans. He was unhappy at the ball-bearing manufacturing company where he had been working; after two or three years, he learned that the business wasn’t his cup of tea. It was during this time that I became involved with an organization called the Young Presidents’ Organization (YPO). This group gave me an opportunity to meet people from all corners of the business world. It was through YPO that I’d met the president of the discount supermarket Akafudadou (meaning “Red Tag House,” or “Discount Warehouse”). I asked him to take Yasuo in for a couple of years so he could learn about the food and grocery business. After his short tenure at Akafudadou, I had Yasuo fly to the United States to study chicken farming for a couple of years so that he could eventually take my place as head of the newly formed chicken business. Yasuo agreed.

The veterinarians began planning the new chicken business. They were bright and ambitious doctors who knew a lot about genetics and how to breed the layer bird; however, they didn’t know what to do afterward. And we had to find the best feed supplier for our chickens. We started selling chicks to the farmers but almost immediately found that the sales to the farmers were very inconsistent. Their requests might range from 10,000 to 50,000 birds, but at other times they might not want any chicks at all. The farmers’ needs were highly unpredictable. To keep up with demand when it was there, we would continue to incubate eggs; yet more often than not we would have a number of extra birds that did not sell. We were forced to build chicken coops to raise these leftover chickens, a measure that only acted as a band-aid to the problem. The inconsistency of demand led us eventually to stop selling to farmers; we also decided to raise the chickens ourselves. Fortunately, I was able to engineer a merger with a supermarket chain to whom we could sell all our eggs. During the course of making a merger and building Jusco, I started talking with two other chains—Hotei-ya and Nishikawa-ya—about selling clothing to build a nationwide chain store. After a year and a half of intensive discussion with both companies, Takihyo agreed to create a new chain store that I christened Uny. The original thinking was that Hotei-ya and Nishikawa-ya and part of Takihyo would join together, thus creating a national chain store. However, some conflicts of interest arose and the merger could not be entirely completed. Regardless, Takihyo sent a mass of employees to help the restructuring of the companies and formation of the new management structure.

Although one egg—or dress or necktie—may not differ too much from another, you gain an unprecedented advantage in selling your product, whatever it may be, when you have a stronger relationship with a buyer. From the start, I knew the people that would become Uny customers and employees; they trusted me. Consequently, asking them to buy my products—whether it was food or clothing—was much easier. If competition arose between my company and another—and we both offered the same product—the people I knew would of course pick me and my relationship with them over the other unknown company. This was the basis upon which I started Taki Foods. After Yasuo’s time of study in the United States, I relinquished my post to him. Unlike his experience in the ball-bearing business, Yasuo found a passion in the food services industry. He has grown the company to become one of the biggest chicken meat and egg sellers in the Nagoya area. Uny also has grown proportionately since the merger.

Although they may seem to have come out of left field, the solutions I found for Taki Gakuen came from the veterinarians and the resources to which I had access as president of Takihyo. Perhaps one of the most important lessons I learned in my first 10 years as Takihyo’s president is that you must utilize all of your resources for the best results in order to solve a problem. You have to ask simple questions, regardless of how complex the answers to those questions might be.

The solutions I found for the Taki School did not arrive from an aha! moment or a monumental epiphany. I simply conducted basic research on how Taki Gakuen could fill the gaps among other neighboring schools. I understood my competition and retaliated with a hiring initiative promoting increased salaries for teachers. Others doubted my methods, but my plan yielded the desired results. My process could be described by combining two well-known sayings: there may be a hundred ways to skin the cat, but with a little preparation mountains become molehills. Taki Gakuen became a success in a matter of years rather than decades. Asking the simple questions—“What do I want to accomplish?” and “How can I help the consumer choose us?”—brought us the desired results. Although it might seem overly simplified, this theoretical framework grounds the way I break down complex problems into manageable-sized chunks. Today, Taki Gakuen remains one of the best K-12 private schools in Japan, and I am proud to have reified my grandfather’s dream. After one of my other brothers, Katsuo, graduated from Keio University, I asked him to take care of the school, and he has done a wonderful job in its management.