Publishing in a tough market

An alumnus’ perseverance helps fill a gap in Japanese family business research

Teruo Shinato MBA’83J was determined to get Professor Randel Carlock’s latest family business book published in Japan.

“Japan has 30,000 firms that have been owned and managed by the same family for 100 years or more, which is more than any other country,” says Professor Shinato, Dean and Professor of the Graduate School of Social and Cultural Studies at Nihon University in Tokyo. “But there are less than 10 family business books translated into Japanese, probably just five or six, and Randel’s is one of the best.”

Co-authored with Professor John L. Ward of the Kellogg School of Management, When Family Businesses are Best: The Parallel Planning Process for Family Harmony and Business Success (Macmillan), was first published in English in 2010 and in Chinese and Spanish in 2014.

After publisher Macmillan gave up trying to get it published in Japan, Teruo successfully took up the challenge and the book finally came out in Japan this February.

“Japan is a very tough market for publishers, particularly English publishers, to deal with,” says Randel. “It was Teruo’s motivation and leadership that got this book published. He is a great example of what INSEAD is all about and the power of our global alumni network.”

Randy Carlock and Teruo ShinatoTeruo’s interest in the book began when he attended an alumni event in Fontainebleau in 2007. He contacted Randel to say he was on campus and would like to meet to find out more about Randel’s family business class, which was not taught when he attended INSEAD in the mid-1980s. The two had coffee and soon became friends and colleagues with Teruo visiting Randel’s classes and giving lectures at INSEAD Singapore.

Randel recalls: “Eventually I told him about the new book, he read it and said it makes a lot of sense particularly for Japan because it is based on values rather than Western best practices. Most other family business books are written with a Western perspective because that is where most of the research is done. But that isn’t going to work in Asia. Our book says there are no universal best practices, the best practice belongs to each family and it is based on their values and vision. So a Japanese family can pick up this book and write their own values and plan based on the ideas in it.”

Pre-academic interest
Teruo’s interest in family business goes back long before he met Randel and even before he became a professor. “As a bank officer I was already interested in it because many of my clients were family companies,” he notes.

For 25 years before becoming a professor, Teruo worked in Japan, London and Paris as a Joint General Manager for Fuji Bank (now Mizuho Financial Group). He speaks English, French, Spanish and basic German in addition to Japanese.

“I had always dreamed of being a professor one day because the people who work in the real world can make a real contribution to academia, especially in the management area,” he says. “I think there should always be one person who can be the bridge from business to academia.”

In 2003 Teruo entered academia as a Professor of Management at Asahi University. In 2006 he gained a tenured professorship at Nihon University, the same university where he was awarded a PhD in International Relations. Teruo also has a CEP (Certificat d’Etudes Politiques) degree from the Institut d’Etudes Politiques de Paris and a BA from Osaka University.

Nihon is Japan’s largest university and has produced the most CEOs for Japanese companies, most of which are family-owned. It was there that Teruo discovered the potential of Japanese family business as a field of research.

“The government at the time finally realised Japan was the No. 1 family business country and that family business plays a big role in employment,” notes Teruo. “So they reduced the inheritance tax for the family company’s succession which used to be very high and made it difficult for family businesses. Also there were studies from abroad that showed family companies are doing better than non-family companies. Professors like me realised that family business was an interesting research subject that was basically untouched except by accountants trying to reduce the inheritance tax.”

Besides lecturing and authoring papers on family business at Nihon, Teruo is also on the board of one family company and is an independent auditor of another. He is also President of La Societe Franco-Japonaise de Gestion (the Franco-Japanese Management Association) and Managing Director and Secretary General of the Japan Academy of Family Business, which he co-founded in 2008.

In a recent paper called Japanese Corporate Governance Structure Review and the Logic of Ié (Ié means family or home in Japanese) which he will present in July at the International Family Enterprise Research Academy (ifera) 2015 Annual Conference in Hamburg, Germany, Teruo argues that one of the main reasons for the lasting success of Japanese family firms is cultural.

“Compared to Western countries, in Japan the continuation of the family is more important than oneself, and the main purpose of the family is to ensure the continuation of the company,” he says. “Moreover family companies in general can endure economic turbulence better than non-family companies because they don’t need to report to shareholders every three months so they can take a longer view.”

Japanese family businesses can indeed last centuries. For example, the world’s oldest family business is said to be Hoshi Ryokan, a hot spring hotel founded in the year 718 that has been run by the same family for 46 generations. Kikkoman, the soy sauce maker, is still run by descendants of the same families that founded the firm around 1600.

Final success
Convinced of the need for the book in Japan, Teruo took it under his wings.

“I did the translation myself,” he says, “but it took a lot of time, something like three or four years. I should have finished the translation earlier but I had been nominated as Dean of the graduate school at that time and it took a lot out of me.”

The translation came to 374 pages compared to the 288-page English version. Still Teruo had trouble finding a Japanese publisher. Finally with the help a friend who is the CEO of a publishing company that specialises in translated business books, he succeeded.

Since then, the Japanese version of When Family Businesses are Best has gone on to receive favourable reviews. “It has been very well received in Japan,” Teruo says, citing a recent review in the Japanese Economist magazine by Emeritus Professor Tadano Kagono of Kobe University.
Teruo’s contribution did not stop after publication. He has spoken about the book to family business groups in Japan, lectured about it with graduate business students, and discussed its points with Japanese corporations. Randel also went to Japan in April where he held seminars on it at Nihon and at the Family Business Advisors Association Japan.

“In the broad sense Randel is my mentor in the family business area,” Teruo says.

One could also say Teruo is Randel’s Japanese champion.

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