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monster under bed

Monsters Under the Bed

Tentativeness is rarely out of fear of consequences, but rather fear of unknown consequences, and there is a distinction.

Tentativeness is rarely out of fear of consequences, but rather fear of unknown consequences. Click To Tweet

A Japanese government ministry official in charge of supporting small to medium size businesses said a recent event in Tokyo said that a shocking number of profitable privately-owned small to medium sized companies with perfectly viable businesses are simply closing as their aging CEOs are unable to find a reasonable successor. The children of the owners who might take over the family business frequently lack either appetite or the aptitude to do so, and few if any possible buyers for the business ever materialize. Rates of entrepreneurship in Japan in general are about half of other OECD countries.

Yet it was not always like that. Most of these businesses were founded by entrepreneurs during the period following the end of World War Two and up to about the time of the 1964 Tokyo Olympics, during which there was clearly a lot of entrepreneurial fervor. I asked the official what had changed.

“After the war, there was nothing. People had nothing. They had to create businesses to survive. That’s no longer the case today.”

That makes sense. When I lived in Australia, I met a wealthy Chinese man, who had been naturalized as an Australian citizen, who owned and ran a highly successful real estate development company in Sydney. When he first arrived in Australia, he lived in a two bedroom apartment with twelve other Chinese migrants, six to a bedroom.

When you are at rock bottom, there is nowhere to go but up, so why not be bold and audacious in developing a business?

Risk of failure did not daunt him then, and does not daunt him even now that he has something to lose. For him failure is a known quantity not to be feared. He had made and lost money many times by the time I met him, but never doubted his capacity to succeed, even if he should fail temporarily. Failures are rarely fatal or permanent.

Yet for others who have never either succeeded or failed at much, even modest entrepreneurial risk can loom in the imagination as gambling with one’s life.

The CEO of one of my client companies in Japan made a strategic decision to divest from a profitable wholesale trading business in order to focus on the company’s most valuable products based on proprietary technology. Sales directors and managers alike, who had always been salaried employees, railed against the decision, saying it was crazy to let go of a profitable business and not fair to customers!

The CEO agreed, and offered to sell the wholesale business for one-hundred yen (about one dollar) to any individual or group of directors and managers who wanted to take it on.

No one did.

The CEO wound up the profitable wholesale business and ended it.

If you think over-sensitivity to entrepreneurial risk is somehow a Japanese disease, think again.

A successful non-Japanese CEO of the Japan office of an American company once asked me if I thought he has what it takes to do what I do—that is to say go into business for himself. I thought he did and told him he ought to do so if wanted to.

That was three years ago. He is still working for wages today.

An American CEO of the Japanese office of a European firm once told me he had pondered going into business for himself. He is perfectly capable of succeeding and I told him as such. So I asked what is holding him back.

He couldn’t bear the thought of having business card without a famous corporate brand on the face of it.

It never occurred to him that his clients work with him because of who he is, not because of the logo on his stationary.

The young son of a friend of mine used to be afraid to sleep at night with light off in his bedroom. When my friend asked his son why he is afraid the dark, his son acted indignant and corrected his father.

“I’m not afraid of the dark! I’m afraid of what might be in the dark!

To his son there was a distinction.

And what about you? What about your staff? We don’t necessarily need to be talking about entrepreneurship here.

Do you or they still worry there might be monsters under the bed?

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