From federated laissez-faire to group synergy: Tsuruha Jun’s pivot (2020)

How to make the scale you spread out earn as one

The core of this decision was to swap out the contents of outward growth without denying that growth itself. Tsuruha pointedly called the federated formula his company had spent twenty years perfecting a policy of “letting go.” The tolerance of leaving an acquired company to run itself, its name and operations intact, works well for spreading fast but does little for the power to earn as a single group. That a founding-family president who had reached the office through a passive, health-driven succession chose first to rework the very template of success his family business had accumulated says much about the character of this decision.

Yet a 100% private-brand target and consulting-style stores are easy to proclaim and hard to root. Dyeing the cultures and assortments of companies gathered by acquisition a single colour takes time, and it took years for the quality of earnings to catch up with the expansion of scale. Even so, this concern with turning quantity into quality was later carried over to the wholly different scale of the Welcia merger, to be re-asked in the figure of a $330M (¥50bn) synergy. How to make the scale you have spread out earn as one group — the 2020 pivot was the choice that set that question at the centre of management.