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.
Risk and risk perception are rarely equivalent, but if you lead an organization, yours must be one and the same.
I write this as worldwide cases of coronavirus surpass 10,000, most of which are in China, and are certain to rise. While a frightening pathogen to be sure, the fears that coronavirus has provoked in people in other countries are beyond rational, as are the changes in their behavior.
Businesses can be their own worst enemies when business process supplants business thinking.
The CEO of a large industrial American company in Japan told me of difficulties he faces in buying from a division of a large Japanese industrial company, not because of a lack of will to sell on their part, but rather unnecessary and burdensome bureaucratic processes that were designed to meet Japanese government procurement requirements, the division’s primary customer. Quality control processes at the Japanese seller company were impractical and far beyond what the American company required, while lead-times and costs were excessive. Adherence to process, no matter how inappropriate, dominated thinking.
Artificial intelligence and expert systems in business can increase organizational capability, but at the same time, despite hype and promise, they are no silver bullet and can also dumb your organization down.