Founding Daiwabo Information System as the way out of the textile slump (1982)

It looked like an unrelated field; it was a transplant of the core trade’s habits

A spinning company going into personal-computer distribution looks, from outside, like diversification with no thread running through it. Trace the contents, though, and what the textile floor already had was carried across intact. The commercial habit of holding stock ahead of demand and shipping immediately came from textile sales; the engineers who could handle systems came from the monitoring the company had built itself to run new machinery around the clock; and the locations of the first branches — Saga, Izumo, Kanazawa — came from the towns where the mills had been. It can be seen as a business that took the by-products of equipment scheduled for scrapping and sold them into a different market.

What separated a good decision from a poor one was also where the scale was set. To a company that had used up its capital in a first year of ¥400m in sales and a ¥20m loss, President Yamamura set a target that tied revenue, branch count and headcount into a single equation: grow by ¥1bn a year to ¥10bn, and open three branches a year to do it. The plan that staff reportedly gossiped about — “is the president an idiot?” — was met in FY1987 at ¥12.2bn. In place of the equipment Daiwa Boseki expected to scrap, three-tenths of it within a decade, what was left was fifteen engineers who understood computers and the habit of carrying inventory in order to sell.