■ Longevity in Japanese Companies: The "S" in SDGs
Research on long-lived companies has shown that over the past 40 years, family-run businesses generally perform better than non-family ones. Notably, the uniquely Japanese practice of adopting sons-in-law has proven to be an effective strategy, often resulting in better outcomes than in other family or non-family managed firms. In Kyoto's venerable merchant families, it's commonly said that having a daughter means gaining a good son-in-law.
Another hallmark is the emphasis on "the path."
More than just prospering in business, these companies prioritize a merchant's ethical path that values simplicity and frugality, often explicitly outlined in family teachings. Eighty percent of these long-standing companies have formal family mottos. Operating in a society with minimal religious influence, they have maintained a management style distinct from Western Christian-based philanthropy.
In contrast to Western business focus on profit, sales, shareholders, speed, and market share, these businesses prioritize customer first, core business focus, quality standards, and adherence to foundational principles. They also foster a strong sense of unity and familial ties with employees, symbiosis with the community, and support for cultural and artistic endeavors.
However, the research consistently points out that a spirit of enterprise and innovation are also crucial for longevity.
Organizations that have lasted more than a century have endured wars, occupations, regime changes, and disasters. They have developed resilience to survive major upheavals, such as pandemics and the digital revolution, epitomizing sustainability—the "S" in SDGs. Arguably, they provide a compelling counterpoint to the American model of a 30-year corporate lifespan.
Japan has a unique position to promote itself as a leader in producing companies that sustainably coexist with employees and their communities, showcasing this approach as an SDGs model. The strategy of nurturing long-lived, traditional companies could well be a valuable export of "Cool Japan" to the global stage, offering lessons in corporate longevity and sustainability.
