When times are good, getting too cozy in a situation can put a company on the road to failure.

Here’s a story a professor at my college told me once about an old farmer who owned a very old, very tired horse. One day a neighbor went by and saw the old animal, a bird was sitting on its back pecking it. With each peck the horse jolted and winced. “How long have you had this horse?” he asked. The farmer replied 28 years. “28 years! If your horse has worked for that long, you should think about taking better care of it and stopping that bird from pestering it.” The farmer smiled, “That horse is an old friend, but that bird is the only thing that keeps it moving. If the bird didn’t peck, he’d stop moving completely and just lie down and die.”

Over the years our sales strategy and methods have been through many changes, sometimes these have been innovative, sometimes these have been because of setbacks and failures. When I first started ISFnet, I decided not to let our salespeople contact and make appointments with new customers directly. Instead, we used partners and advisors to introduce customers to us, an approach which seemed at the time the most efficient way to build up the business. The system was very successful, projects flooded in. This, on the one hand, was great, business was thriving. On the other hand, the situation was too cozy and this started causing problems.

One day, one of our partners contacted us. They wanted to know why we hadn’t been following up on all the customers they had been introducing. I investigated and found that because of the volume of work coming in the salespeople had started to pick and choose customers and projects, following up on some referrals but neglecting others. Our partner was, naturally, very unhappy about the situation and said they were stopping all referrals.

The hardest part of sales is making that initial contact and developing a desire in the customer for your services, but we didn’t have to do this. We were getting work handed to us on a plate and no one will do their job properly if most of the work is already done for them. It’s too cozy, there isn’t enough of a challenge to motivate and inspire employees. Like the old horse, why move if you don’t have to.

Since then, our all sales people put in the work calling new customers every day and we have quotas for the number of appointments made. The job has become tougher but the sales division is now much tighter as a team and they are always on their toes. It has also increased our sales people’s commitment to their customers, since they are the ones who have made the effort, gone out and won the projects.

Management Principle No.6

Earlier this year JAL, Japan’s national carrier, emerged from bankruptcy protection following extensive restructuring, lay-offs and cost cutting. JAL had filed for protection under the Japanese Corporate Rehabilitation Law following disastrous financial losses in 2009. Under court protection, JAL has made plans to shed 19,000 staff over a third if its workforce

In December 2010, when the cuts were announced there was a lot of intense media coverage. People from all walks of life were interviewed, from employees to politicians to people on the street, for their feelings about the situation.

For me the most interesting and informative interviews were with JAL’s staff. In one case a JAL pilot who had escaped redundancy told journalists that he had never imagined that JAL could ever have failed. “I never saw the company from a management perspective,” he said. “I never thought about profit, loss or shareholder dividends. We wasted a lot of money on expenses - taking taxis and so on - charging it to the company... Even after the financial problems at JAL started to surface, it never entered our heads that what we were doing might be wrong.”

In another interview, a member of JAL's customer support team became quite upset as she spoke about the number of complaints they had been getting. According to her complaints from customers had exploded in recent years, but no real action had been taken to address the problems and no changes had been made to improve customer service practices at the company.

In charge of rehabilitating JAL is Kazuo Inamori, founder of Kyocera and DDI (which became KDDI, the second largest telecom company in Japan). Inamori is a real role model of mine and his business philosophy is a large influence.  Since taking leadership, Inamori has spent a lot of time talking to the management at JAL about business administration and philosophy. He has persuaded managers to become more conscious of costs and efficiency, and the need to change their staff’s and their own attitudes towards JAL’s customers - to look at the company and its services from the customer's perspective. Under his stewardship, JAL has started to turn itself around and to mark a new beginning, the company changed its logo in April this year.

Inamori’s focus on customer services and cost efficiency are, in my opinion, the two of the most important aspects of building a successful of a company. I strongly believe that if a company does not work hard in both areas, it will be doomed to failure. When new staff join ISFnet, they are given ‘5 Promises’ one of which is that they will made redundant. This promise is only achievable if ISFnet’s managers and I look at our business from the customer's view point and costs.

Managment Priniciple No.4

In business, if you sit around waiting for something to happen, it probably won’t.

Each day we face many problems, some can be solved easily others cannot, but ultimately it doesn’t matter the nature of problem, what counts is your attitude towards it. After the Lehman Crisis many companies found that the amount of new contracts and work they had coming in was greatly reduced. The IT sector was particularly badly hit, as companies choose to reduce the scope of the services they used and delayed upgrading their systems and hardware. ISFnet was not immune to this and our business was hit the same as the others but we survived because we had the right attitude, we stayed motivated, we fought hard for the few projects that were being tendered and added value to our customer wherever possible.

An old colleague of mine has a small but successful company that specializes in system design here in Tokyo. When the world economy crisis hit in 2008, work dried up almost overnight. He didn’t want to lay anyone off so he worked hard canvassing old, new and potential customers for work. He said that the situation got to a lot of the staff at the company. Morale and motivation hit rock bottom and many employees would sit at their desks staring into space, looking at the racing forms, surfing the internet and shopping online.

 One young manager kicked back though. He told his team that they should use their time productively instead of just sitting around idly. They started to do little tasks like tidying up the office, organizing their desks, putting customer files in order, stock taking and looking at process improvement. The effect was startling. My friend said that he’d come back from his daily round of sales visits and each day the atmosphere in the office had improved. He said it was like a slow thaw. The other members of the company watching the young manager and his staff and their motivation began to return so instead of sitting around, they started to reorganize, rebuilding the company and finding new business opportunities. In time, the company’s revenue increased and the business returned to profitability. 

Management principle No.2

Part 1

We live in a global society with a rich and diverse mix of people and cultures.

Technology has broken down a lot of barriers, at both a local and global level, and has brought us closer together as individuals.

Respecting each other as human beings and as equals is crucial. For business, companies have to acknowledge this diversity in its products and services offerings, in its staff and its stakeholders, in order to be globally successful.

Diversity in the workplace is something I've always felt strongly about and I have worked hard to create an inclusive workforce at ISFnet that brings together people regardless of their gender, sexual orientation, age, race, disability, religion and nationality.

At ISFnet, our corporate philosophy naturally promotes and drives forward diversity in the workplace because diversity makes good ethical and moral sense - having non-discriminatory policies for recruitment and employment is, of course, the right thing to do.

When somebody ask me why diversity has given so much importance in my company? I always say look at your fingers, why are they all a different length and size.

If our fingers were all the same size, we wouldn't be able to use our hands in the supple and varied way we do now.

We have a firm grip due to different size of fingers which allows us to grasp different objects.

When we hold a ball in our hand, for example,the different sized fingers curve around its edges evenly giving us a firm grip.

Diversity strengthens companies. It enables us to build firm and long lasting relationships with the surrounding community, society, and the world.

It also increases the flexibility and creativity of a business by broadening the range of perspectives and ideas available as well as expanding the range of solutions and approaches available for tackling problems and adapting to change.