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Where does the Toyota CEO get his Inspiration

Toyota executives and other Japanese economic and business leaders, such as Bank of Japan Gov. Haruhiko Kuroda, have been trekking to Ina Food’s headquarters to glean insights from Hiroshi Tsukakoshi, 77 years old, who has had a record of consistency that even mighty Toyota can’t match: At one point, the company recorded 48 consecutive years of profit growth.

Insight 1

He says companies should exist to make their workers happy, and says employees should clean the office toilets to foster a sense of responsibility.

On a sunny afternoon in July, tourists were relaxing in the Kanten Papa Garden—named after the company’s best-known brand of kanten, as agar is known in Japanese. Hydrangeas, cared for by Ina Food employees every morning, were blooming, and a monument with a metal plate displayed the corporate motto: “Let’s make a good company.”

“You spend a large part of your life working,” Mr. Tsukakoshi said in an interview. “Isn’t there something wrong if companies are producing unhappy people?”

Insight 2

long-term success and social cohesion are often favored over short-term profitability. Steady as she goes , one ring at a time .

in his book, “Tree-Ring Management”—so-called because a tree steadily adds one ring a year, rather than expanding and contracting erratically. “Trees keep growing even when the weather is bad,” Mr. Tsukakoshi writes. “Companies should be like that, too. You have to keep growing little by little, even if the pace is slow.”

Toyota boss Akio Toyoda met Mr Taukakoshi about five years ago, when Toyota was struggling to turn around the car maker from huge losses that followed a period of rapid expansion.

Toyoda says “I’ve learned so much from Mr. Tsukakoshi and his philosophy that steady growth is essential for any company.”

 Mr. Toyoda says Toyota wants to attract long-term investors rather than those who are focused on short-term gains. In July, the company issued a new kind of shares that lock holders into ownership for at least five years. The plan drew opposition from some foreign investors, who collectively hold around a 30% stake in Toyota.

In times of rapid growth, save the spoils to take into account potential droughts! 

“What’s most important is not to pursue short-term greed and efficiency,” Mr. Tsukakoshi said.

Mr. Toyoda borrowed a phrase from Mr. Tsukakoshi’s book in his last earnings announcement 

“We were like a tree whose rings grew too rapidly at one point, and whose trunk became weak and prone to breaking,” Mr. Toyoda said at an earnings announcement last year. “To grow sustainably means to build a ring around the tree trunk each year.”

About Ina Foods

With $140 million in annual sales, Ina Foods makes roughly 80% of the approximately 2,300 tons of agar and related products that circulate annually in Japan, according to Mr. Tsukakoshi, who says he owes his own longevity to a daily intake of the stuff.

Its 24-acre headquarters here is a monument to Mr. Tsukakoshi’s steady-as-it-goes philosophy. The complex houses an agar research and development center, an agar exhibition, an agar factory, two agar shops and two agar restaurants.

Inspired by Yoko Kubota at yoko.kubota@wsj.com

Posted on September 1, 2015

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