Tree-Ring Management

by Hiroshi Tsukakoshi

Hiroshi Tsukakoshi is the chairman of a kantenmanufacturer that is far from the bustle of Tokyoamid the natural beauty of Nagano prefecture. Hisdesire has been to build the kind of company thatmakes its employees happy and makes a contributionto society by doing so. His philosophy is to take thelong view, growing his business slowly and steadilythrough “tree-ring management.”“Over the last 20 years, no one has left the companybecause they were unhappy,” Tsukakoshi declares.His unique management principles include such ideasas “rapid growth is the enemy” and “the essence ofmanagement is creating fans.” His approach hasresulted in rising sales and profits for half a centurysince the company’s founding, and his companywelcomes a steady stream of visiting executives andanalysts from major corporations, including MurataManufacturing and the Toyota Group. ChairmanTsukakoshi’s philosophy of seeking steady growthover the long term will enlighten businesspeoplearound the world about a better way to managecorporations.

166 pages, Kindle Edition

Reviews

[Ana · Rating 5 out of 5]

This is not just a book about how to manage a company. It is also an education about life, social behaviour, and achieving work and personal fulfillment. For me, it gave me a powerful new insight on how to understand simple things that are part of my everyday life.

[Shaun Davidson · Rating 5 out of 5]

Tsukakoshi believes a company exists to make its employees happy. Fast growth is at odds with this; "once profits are primary, employee happiness is secondary." He believe a company should be good, or, in his vernacular, "upstanding" - not causing employees, customers, or suppliers any trouble. He says he would take no joy in operating a successful company at the expense of any person.

Grow slow. During booms, profits are a loan - you pay them back during the bust. There is a temptation to believe the boom is managerial skill, but it's also partly the boom. Manage profit, but don't fixate. Profit is like excrement - nobody makes pooping their goal, but it's what a healthy body does every day.

So, what is real growth, then? It's employees feeling happier than before. It's being worthy of the trust customers place in Ina Foods, the company he runs that produces kanten.

Promotions should be based on seniority, not a raw meritocracy. Skill is often confused with results, and results are often based on who was in the chair when many things finally combined to pay off - it can be random. Employees use company resources to grow, and he thinks it's hard to attribute merit to individuals, and doesn't promote teams. Are pure meritocracies at odds with deeply cooperative teams?

This entire book is about the importance of strong personal relationships, putting people first, value-for-value, and careful, slow growth. Walk from deals with customer who are "doing you a favor", and never squeeze suppliers. Read it carefully for many specific examples of this; my review doesn't include the best of them.

In the end, I come back to what Tsukakoshi starts with. "When a family runs short of food, it does not expel one of its member so those who remain can eat what is left."

Do you believe companies are families? Or do you think they are collections of loosely affiliated people, bound for a time toward a common goal, but basically ephemeral? Whether or not you agree with what Tsukakoshi says likely hinges on your answer.