The abrupt exit of Onishi Hiroshi (2017)

What the charismatic leader’s departure asked

At the centre of this succession was the question of where the legitimacy of a leader binding a merged company comes from. President Onishi Hiroshi tried to hold the centre by making reconciliation between the old Mitsukoshi and the old Isetan his banner, and the price of that was deferring painful restructuring. When results turned down, however, reform messages issued without waiting for formal board decisions turned into distrust on the shop floor, and the very organisation he had preserved for the sake of reconciliation raised its flag against him. One can see how a footing for governance that had rested on personal charisma collapsed, with poor results as the catalyst.

Replacing the president, however, did not solve the problem. The successor administration under Sugie raised the banner of “structural reform first,” yet could not go as far as closing loss-making stores as a rule, and the following year’s results sank into loss. The exit of a leader can serve as a device for calming organisational discontent, but it carries no guarantee of solving a long-standing high-cost structure. Who gives the orders is a question about people; what to fold and what to keep is a question about the business. They are different things, and Isetan Mitsukoshi’s rebuilding went on asking the latter for a long time afterwards.