Handing full authority to an outsider chairman (1998)

The author’s view

“I came to this company as if I were its bankruptcy receiver.” That one line produced resignation letters from every director, which tells you how little capacity remained inside to settle anything. When the president stayed on in 1995 as a demoted vice-president rather than resigning, there was criticism about how responsibility had been taken. Three years passed in which the internal hierarchy could not decide its own people’s fate, and it ended with the company entrusted to a 68-year-old outsider. Precisely because Mizuno Shiro had spent so little of his career in the parent, he could line up board cuts and the demotion of a president without personal obligation.

What the regime fixed, though, was the accounts and the headcount, not the ability to sell. Mizuno himself invoked Onoe Kiyoshi’s teaching — that the aim was not to expand sales blindly but to become a company that reliably takes a profit — and concluded that forgetting it and running to financial engineering was what brought on the crisis. A recovery framed as remembering a teaching does not extend to recovering what was lost. That the ordinary profit of the year to January 2000 rested on gains from securities sales is the measure of that limit.