Yoshino’s sudden death and the first outside president, Masashi Sugimoto (2019)

A family design, and its modernisation

The heart of this succession can be read less in coping with the accident of a president’s sudden death than in a family firm of a hundred and twenty years opening execution to the outside while keeping its own independence intact. The capital design laid down at the 1949 incorporation, holding outside capital in check, had made possible contrarian diversification — the lifting of the side-job ban, the move into regenerative medicine — without watching for other companies’ reactions. That independence had been guaranteed in large part by the founding family sitting at the top. Toshiaki Yoshino’s sudden death shook that premise and at the same time, it seems, became the occasion to test the next form: entrusting execution alone to a professional without letting go of ownership.

A structure in which Kunio Yamada stayed on as a chairman holding representative authority while Masashi Sugimoto, from Takeda, took charge of operations as president can be called an attempt to bind the family’s centripetal pull and outside discipline into one. The more a company widens the base of its businesses against selection-and-concentration, the more discipline it needs to make each diversified business pay. Whether it can raise every one of the operations it has spread into total healthcare into a profitable form without thinning the spirit of challenge that the founding family’s independence breeds is what will test the ability of the manager brought in from outside. The question of where a family firm acquires the management discipline to match its scale and diversification remains, even after the 2019 succession, an open one.