In the past three editions, l dwelt on the topic of entrepreneurship because readers kept asking for more. In this edition however, l consider it pertinent to showcase real-life successful entrepreneurial CASE STUDY-away from all the grammar! A case of practical example-indeed.
Konosuke Matsushita: The $73 Billion Story!
In 1917 in Japan, a 23-year-old apprentice (Konosuke Matsushita) worked at the Osoka Electric Light Company without any form of formal education.
He came up with an improved light socket system but his boss dismissed the device as amateurish. Undaunted, young Matsushita stuck to his guns, and began making samples at the basement of his home. Later, he expanded his invention streak to battery-powered bicycle lamps and other similar electronic devices.
What eventually came out of his curiosity and untiring effort was Matsushita Electric Company, which later changed its corporate identity to Panasonic in 2008. Today, Panasonic generated revenue of over $73.46 billion as at March 31, 2015.
Konosuke Matsushita was born into a well-off landowning family in 1894. A decline in the family’s fortunes during his childhood meant that Matsushita’s education was cut short. At age 9 he became a brazier’s apprentice, then a year later a bicycle shop apprentice.
He stayed five years at the bicycle shop, picking up basic metalworking skills. At age 16, he went to work in the Osaka Electric Light Company. Inventor and Entrepreneur Konosuke Matsushita began the Panasonic’s journey by inventing a two-socket light fixture. This very important, yet elegantly simple, breakthrough led to what is now one of the world’s largest electronics companies.
Since its founding in 1918, Panasonic Corporation grew to become the largest Japanese electronics producer. One of the traits that followed Matsushita throughout his career was a willingness to take risks.
When Konosuke Matsushita began working for himself, in 1918, at the age of 23, he had almost nothing: no money, no real formal education, no connections. Yet, his small firm Matsushita Electric Appliance Factory flourished under the guiding hand of a clever, wise, and inspired entrepreneur.
In the late 1980s, Matsushita’s revenues hit a whopping $42 billion. With nearly 20,000 employees, Matsushita grew such household brand names as National, Panasonic and Technics.
Matsushita’s success has made him Japan’s biggest yen billionaire. He has also made himself the most widely admired businessman in Japan. Matsushita Basic Business Philosophy The Matsushita Basic Business Philosophy consists of three elements.
1. Basic Management Objective – expresses the corporate goals of the company: “ Recognising our responsibilities as industrialist, we will devote ourselves to the progress and development of society and the well being of people through our business activities, thereby enhancing the quality of life throughout the world.”
2. Company Creed– expresses the basic attitude of employees to their daily work: “ Progress and development can only be realized
through the combined efforts and cooperation of each employee of our company. United in spirit, we pledge to perform our corporate
duties with dedication, diligence and integrity.”
3. The Seven Principles – set the standard for the employees’ proper mental attitude for their daily work: Contribution to society; Fairness and Honesty; Cooperation and Team Spirit; Untiring Effort for Improvement; Courtesy and Humility; Adaptability; Gratitude.
Paternal Management Philosophy
Matsushita believed that a company should create wealth for society as well as for shareholders, and should always work to alleviate poverty. His business philosophy led to the Japanese “paternal management” tradition, whereby employees are viewed as being part of a “family” within the company, and are assured of lifetime employment, without fear of layoffs.
Devising a New Management System In 1933, Matsushita devised a new management system, dividing the company into three autonomous business units: radios, lighting & batteries, and synthetic resins/electro-thermal products.
Enriching the Society
To Matsushita, his mission of manufacture was to overcome poverty, to relieve society as a whole from misery, and bring in wealth.
Business and production, to Matsushita, were not meant to enrich only the business owners, investors, employees or shops, but all the rest of the society as well. Matsushita never talked narrowly about maximizing shareholder value as the proper goal of an enterprise.
Although he did speak often about generating wealth, he emphasized the psychological and spiritual aspects of being – for the good of all people. “Big idealistic / humanistic goals and beliefs are not incompatible with success in business.
They may even foster achievement, at least in a rapidly changing context, by supporting those habits, which encourage growth,” Matsushita said.
7 Core Principles of Panasonic Management Philosophy
Panasonic’s standards are still firmly grounded in the philosophy of the company founder. The Seven Core Principles of Panasonic were established by Konosuke Matsushita back in the 1930s.
These principles, which are also called the seven objectives, comprise the foundation of Panasonic’s management management philosophy. Matsushita’s powerful ideas are about the roots of life-long learning.
One can, he often told people, learn from any experience, and at any age. With ideals that are big and humanistic, Matsushita emphasized, one could conquer success and failure, learn from both, and continue to grow.
“In a changing environment, lifelong learning maybe more related to great success or unusual achievements than IQ, parental socio-economic status, charisma, and formal education… Life-long learning is closely associated with humility, an open mind, a willingness to take risks, a capacity to listen, and honest self-reflection,” Matsushita said.
One piece of advice Konosuke Matsushita gave to his employees in the early days of the company was: You may be a well-educated, clever and virtuous person, but those qualities will not necessarily make you a successful businessman. In addition, you must acquire the knack for business.
This is to be done “by giving your best to each and every task you take on, and by reflecting on your performance with an honest and unprejudiced eye. If you do this constantly, day after day, eventually you will be able to do your job unerringly.”
In other words, you acquire the secret to business success gradually by applying yourself with conscious effort from day to day.