Japanese companies have been active recently global M&A. When entering new markets, they bring their own corporate cultures and leadership styles. Clearly different from the West, these new relationships come with their own sets of opportunities and challenges.
Japanese beer maker Kirin faced this situation when it acquired Myanmar Brewery Ltd. in 2015. GLOBIS faculty member Toru Takahashi spoke to Takeshi Minakata, president of MBL, about entering this new market, and how his “Feel the Wind” style of leadership helps him succeed.
Takahashi: How did Kirin come to acquire MBL, and why has it been able to succeed so far?
Minakata: The key was meticulous preparation and commitment from the top. The Japanese domestic beer market is expected to shrink while other parts of Asia should grow. We looked into Southeast Asia and gathered information about MBL. Myanmar has a much bigger capacity for growth than its neighbors. Per capita annual beer consumption is six liters here; while it is 30-40 liters elsewhere. Moreover, the political system is expected to open up and MBL has a very strong brand as well. So, all the necessary conditions were in place to do business.
After the acquisition, the Kirin Group was able to utilize its assets in the right way at the right time. In just seven months, we launched Ichiban Shibori and Myanmar Premium. We increased development and production capabilities. Timely technical support and provision of marketing know-how also contributed to a visible improvement in results. But gathering information well in advance was part of it, too.
With quick and visible wins, we were able to earn the trust of local employees. We shared knowhow not only from HQ but provided a place to learn from other overseas investment destinations such as Australia, the Philippines and Brazil, amplifying trust as a global company. Employees who had not even known there was a beer company in Japan were able to relax and get along working with us.
Takahashi: Large companies often struggle to get operations started overseas. How did you make things happen so quickly?
Minakata: The make-or-break of M&A is ensuring management and front-line staff are working together as one. When there is a chance to realize the vision and management philosophy, there is always a strong urge to put in the resources to build an operation. We were keenly aware of making this important market a success. And based on experience, we knew it was essential to have a common understanding of the pitfalls when investing in an overseas market.
With M&A, you must pay attention to the following three questions:
(1) Can we utilize our strengths?
(2) Can we manage the company hands-on? (We must know exactly what is happening on the factory floor and in the market, and what the customer values)
(3) Can we convert enough new customers?
We knew it was important not to just push Kirin thinking onto MBL, but to help our people realize that they have something to offer, too. People in Myanmar tend to be willing to put effort into learning, and MBL has many highly talented people who boosted our success.
Management working as one with the front-line workers is key to identifying how best to do business in any country. The only place to understand customers and competition properly is on the front line.
Takahashi: How do you nurture talent?
Minakata: The leader must show his or her subordinates what can be done. The most important thing is to lead by example and embody what is ideal. If a leader does not move, neither will the staff. Seeing customers and workers in action and getting ideas from this are extremely important. Leaders need to “feel the wind” by using all five senses to understand changes in the market. Those who think they understand the business from behind a desk are the scariest. This is especially true when doing business in a foreign country.
Cooperation, the ability to understand the competition, and communication are skills essential for leaders. When working in a newly emerging economy like Myanmar, it is important not to be aloof or look down on the market. In a culture that values hierarchy, unless you talk to people as equals, you will never draw out their opinions and ideas. Opinions from the front line will only reach the top if people are not worried about upsetting the leader. I want young managers in Japan to come to Myanmar and experience this feeling for themselves, so they can cultivate new leaders and grow themselves.
Myanmar has a complete supply chain, so luckily it represents a great learning opportunity for future leaders. A growing market presents numerous possibilities for personal growth.
Takahashi: What is the best way towards self-growth as a leader?
Minakata: It’s about sharpening your senses by raising interest and curiosity. I am clumsy and not a fast thinker, so I always try to get back to basics: see and feel things for myself. In Japanese, we call this going to the gemba, or literally “where the action is taking place.” In other words, this means I like to smell the yeast, check its color with my own eyes, and touch it with my hands. I am no stranger to using all five senses. This way, when it comes to making a decision, I can think back to the scene with ease. It makes it real and reduces bad judgment.
That’s what I learned on the front lines of production, but I’ve noticed the same is true in sales. Until we can picture our customers and partners in our mind’s eye, we are merely imposing our view on the world.
Takahashi: How do you train yourself to feel with the five senses?
Minakata: It’s all about interest and curiosity. I used to love insects and creatures as a child. I studied microorganisms and biotech in college. There’s no way to feel for something if you have no interest or curiosity. Put another way, if you are not interested or curious about management, you should not be a manager.
Takahashi: What is your message to people doing business around the world?
Minakata: Aim to establish your style no matter where you are. My style is the same whether in Japan or Myanmar: I go and understand the front line. From my experience, people who can do it in their home country can do it abroad. Your beliefs and your compass for making decisions should not change.
I value getting outside and using my senses to understand changes in the market wherever I am. It can take a while to get used to it. Today’s world is a place where work happens quickly and effectively through a computer, yet manufacturers also have a real contact point with customers, delivering real things to them. So, going where your product is delivered and having real and meaningful contact, sharpening the senses, feeling the wind on your face will always be important, no matter the era.
A similar version of this article in Japanese is here.