by Mizuko Ito
Chairman, JC Foodsnet Co., Ltd.
Is it unusual? she wonders, as we marvel at her ability to penetrate the trust network of Japanese business. And then she reflects, I think probably, in my generation, I am the only one. I've never thought of it. Maybe it is unusual. I've always thought that in order to be effective, I certainly had to be in the center of things. Despite the immaculate business suit and the polished demeanor of a world-class business executive, Merle radiates with an unpretentious confidence that would suit a family dinner in Hawaii as much as the corporate board room.
Q: Can you tell us one story about when your chanpon background helped you?
A: I think that I have been able to leverage my American and European based education to my advantage in dealing with Japanese in business. As you know, a rather rigid and uniform education has led most Japanese people to think in the same manner. I think that my ability to think out of the box has given me a competitive edge in business dealings and also in coming up with solutions that my colleagues would not have thought about.
Q: Can you tell us one story about when your chanpon background hurt you?
A: I am very pleased with my chanpon background in this ever increasing borderless world. I think that we are the front-runners and are truly international citizens of the world. We are able to understand the arguments on both sides of the table and be objective, thereby coming up with the most efficient solutions. I don't consider it to be a hindrance.
Q: What do you miss most about Japan when you are away?
A: Japanese love to form clubs and are fairly clannish. Is this based on a sense of insecurity? I don't really know, but it gives one a feeling of belonging, and the mutual camaraderie and pleasures derived from belonging to certain groups is something I enjoy in Japan. On the other hand one could say that Americans are more independent and are free from the trappings of small clubs and groups which in a way influence one's ideas and attitudes. I don't mean the tennis clubs and golf clubs and school clubs that abound in every country. What I find particularly Japanese is the fact that four or five people get together and decide to call themselves by some name and have dinner several times a year, making them feel intimately related and enjoying a special relationship apart from others. I belong to about ten of these types of clubs, each one ranging from four people to maybe twenty.
On the more materialistic side, I miss the security of the country, being able to walk down the street without looking over my shoulder at midnight, and the great food, be it Japanese, Chinese, Italian or French. I miss the general courtesy of the Japanese people. We don't have to worry about being yelled at or frowned upon by waiters or cab drivers. In other words, our already turbulent lives don't have to be further complicated by unnecessary outside hassles.
Q: What do miss most about the US when you are in Japan?
A: I think that I miss the frank discussions that I am able to have with my American friends without worrying about tatemae. I miss the freedom of a society where people really aren't concerned about what you look like, how you dress, where you go and with whom etc.
Q: What makes you feel Japanese?
A: I feel very Japanese when I visit a temple or a garden and can enjoy the calm and feel proud that we are products of an ancient civilization. I feel Japanese when I hear Americans criticizing Japanese people, their customs, their manners.
Q: What makes you feel you aren't Japanese?
A: I feel very American when I am walking down the streets of New York and can feel the excitement of the city, the excitement of a new business deal to be made, the opportunities. I feel very American when I hear Japanese criticizing Americans for being crass, for their lack of manners and tradition.
MO: Merle Okawara
JI: Joi Ito
Could you start by telling us about your background and your relationship
I was born and raised in Hawaii. When
I was fifteen, I came to Japan to attend the American School in Japan for a year
before going back to the States and Europe for university.
When I came back, being fortunate to have both backgrounds, it was easier
for me than for someone purely of American heritage to slip into society and try
to do something. Although of course
we looked Japanese but we were not. In
those days, it was often quite strange for people and they could not accept it.
I returned to Japan as an adult in the mid-sixties, I
was a complete outsider as a woman, an entrepreneur and a foreigner, and also
being young. The environment is changing, but we are still outsiders of
society. So it was very difficult.
On the other hand, it�s interesting.
I think one of the things about being a chanponite is that we can take
good sides of both societies. One of the good things about American society is that people
are taught to think independently and creatively.
I always tried to have out of the box thinking whereas my Japanese
competitors were always thinking in the same way. So this is one advantage that I had in the business. Of
course the disadvantages are great. Being an outsider means not having access to
enough financing. This is still a
big problem in Japan where banks insist on collateral in the form of land or
securities. Anyone starting out
never has enough collateral.
in the beginning my father was my main bank, until we got to a certain point
where I had to go out and deal with the banks in the real world.
It was very difficult because I had to try to convince them I had to go
about my business on the little collateral that I had.
And being in manufacturing�I was manufacturing frozen pizzas at the
time�we were constantly in need of investment for the plant and for equipment. And since everyone was working on the tegata system, we were in turn financing our customers. So it was
always very difficult. Even though
business was slowly becoming profitable, we were always cash poor.
I had to convince the banks that we really did have a viable business
plan. If you are able to do that,
they actually try to think of ways to loan money because that is in their
interest. So although they did
require collateral, they made it easier. The only collateral I was able to offer was my mom�s land
in Karuizawa. In those days, resort
land had no value. A money-centered
bank wasn�t going to lend money on land in Karuizawa, but they needed
something. So they said, �We�ll
take a look at it.�Elt;span style="mso-spacerun: yes"> They went all
the way and looked at it, and they gave it a higher value than necessary.
But in order to convince them to do this, it was really like pulling
teeth. I sat with a loan officer
for about one hour. He wanted to
get rid of me after five minutes. I
refused to go. And he would say �Elt;i style="mso-bidi-font-style:normal">jaa�Elt;/i>,
and I just sat there. [laugh]
And you know one of the advantages of not being Japanese is I can just
ignore these Japanese gestures, right? He would give cues such as �Elt;i style="mso-bidi-font-style:normal">sore
de wa,�Eor �Elt;i style="mso-bidi-font-style:
normal">aaa�Elt;/i>, but I would just sit and continue and continue. He
couldn�t get rid of me. I kept
saying, �I must pay my bills. I have payroll coming up.�EI just sat there
and thought of various things to get him to look at my point of view and to
think a little bit more creatively about how we could get around some of the
the 60s and 70s were really economic growth years for Japan, not only was money
in short supply, but also people, any kind of people.
Nobody wanted to go to a small venture business when they had the choice
of going to Mitsubishi shoji or
Sumitomo bank. Why should they take
the risk with a company that they weren�t sure would exist a few years from
now or not? So we were always trying to find people, especially to work in the
had rented an 18-tsubo broken-down room in Meguro as a factory.
You can imagine it was like omamagoto
. We put in a small line to bake all the pizzas and freeze them.
The freezing equipment was just freezers that we tossed the pizzas into.
This was your first business?
My first business. We still had ten
people, but if they got better offers elsewhere, they went elsewhere. There
was always a constant struggle. I
spent most of my efforts on sales because without sales there was no business. But the more the sales increased, the more production lagged
behind. Sometimes I had to jump
into the factory and work at night baking pizzas.
I thought �If the business is going to depend on whether I can make
enough pizzas or not, we are never going to get very far.�E So
my people were trying to think of how we could get more people in the factory.
We put out chirashi and so on.
I thought how silly this was, because no matter what we do, we are not
going to be competitive with the larger companies in getting people.
My ideas was, instead of trying to get more people to come to this
location, I�m going to just move this plant, my 18-tsubo run-down factory. So
I moved it to the middle of the rice paddies in Kyushu. I converted an
agricultural warehouse. While
everyone was thinking of how we could get more people here, I tried instead to
think differently. Is it possible to get more people?
If we pay them more we�re never going to make it financially. Of
course there were other problems, but when we moved to the middle of the rice
paddies in a little village north of Fukuoka, one of the advantages was that
they didn�t have anything around there. So all of the wives and daughters of
farmers were very happy to have a place like this to earn some extra money.
Now they have Yamazaki Bakery and many large factories.
But when we moved there was nothing.
So we really had a choice labor pool, the best labor force.
We still have a plant near the original one in Kyushu.
It�s one of our better plants.
an entrepreneur and a start-up, not having enough of anything, one had to be
creative. That is one of the
advantages of being brought up in the United States, and not being educated like
everyone to have tatemae . This was
really my only advantage. The big
disadvantage was, being a woman, I was always left out of talks and industry
meetings. I started the business when I was 24.
I was always left out. Nobody
would talk to me. In those days, we
had no Internet. So information was
very very important for this type of manufacturing business. We
needed to find out if our customers were going bankrupt or not.
By the time we found out it was too late to do anything. I
remember once my sales people found out that one of our customers was going to
go bankrupt. In those days, laws
were not as they are today. Everybody
rushed in and took whatever they could from the company going bankrupt because
they couldn�t get their money back. Everyone
was working off tegata, off 60 days,
90 days credit which can add up. So
I said, �Go and see what you can get.�EThey rush off and came back with the
Xerox machine. We were so late. Xerox calls us up and says �That�s our machine,�Ebecause
they�re leased. right? Of course
that was the only thing that was left there. [laugh] I learned very early that
information and networking was so important.
This is really where I had a disadvantage in that I couldn�t get into
any of those networks.
I couldn't get access to that type of information, I thought I would use our US
and European network for a different type of information that would give us an
advantage, so our customers would not feel that they were always being left out
of the loop. That was very important because even the shousha
did not have access to that type of information. For
example, cheese is a very important ingredient for us. My contacts in Europe
would let me know whether there was a disaster or a forecast for a tightening of
the cheese supply, or whatever information I could pass on to my consumers.
So there was some sort of advantage to working with us as far as
information is concerned. Being a
chanponite has its disadvantages as well as its advantages, depending on how a
person wants to make use of whatever they have.
I think the not being 100% Japanese was more of an advantage for me.
And I think it is even more and more so now.
What was that decision like for you to start up a business in Japan?
My family was living in Japan. I graduated from the University of Geneva when I was 22. I
did not really feel that I should go to the States.
I had studied law and wanted to become a lawyer, and there was no
possibility of my becoming a lawyer here because of the language difficulties
and because I was an American citizen. There
are still many restrictions on foreigner lawyers�Eability to work even today. In
those days it was even worse. But I wasn�t fond enough of law as to go to the
US and take the bar exam, etc. So I
just stayed here. I had no choice. Who is going to hire a young foreigner who had very little
skills, and especially little Japanese language skills?
I had legal training, but what could I do? So
the only skills I did have was my ability to translate and interpret from
English to French, since I did my studies in French.
I also did a bit of writing for the Japan Times. But I thought that I
would like to do something more creative. This
was not me. When you�re translating, it�s very interesting, but it�s
not your thoughts. You just
translate some else�s thoughts. And
the type of writing I did was a social column.
So it was not really writing. It
was just writing about what other people did. I wanted to do something creative. All of my friends thought I was nuts. Women get married when
they were 23 or 24. Nobody aspired
to a career. If they did work, it
was while waiting to get married. I
did do what they all did. I took
flower arrangement lessons and all those things you are supposed to do. But I think that my mom, who never really worked a day of her
life and could not possibly be a role model in that sense, was a role model for
life. She was very encouraging.
She always thought I should have the same opportunities as my brothers.
She was very unusual coming from where she was where women didn�t work.
She thought I should go to college.
She thought I should have the same education and the same opportunities
as men did. And she told me
to never depend on anyone else. Even
if you get married, you just never know. You
just have to depend yourself. It
was great advice because I�ve always been very independent because of her
support. So in that way, I never felt I was inferior to my brothers.
[laugh]. Which is again an
advantage of a Western upbringing.
have become quite Japanese, though, since you have come here.
When I watch you networking with the old economy folks like keizai
douyukai, you seem very popular and comfortable.
I think one has to adapt to the situation.
If I feel that it is going to be more advantageous for me to be Japanese,
then it is an option for us, isn�t it? Any
of us can be very Japanese or very Western depending on the situation.
of the interesting things is that you came to Japan rather late, but you were
you were able to penetrate the trust network in Japan quite a bit, although
there were hardships in the beginning,. I think people always tell us the reverse, that you can�t
come in part way through and get in. You
may not be all in the inner circles, but you are in quite a few of the inner
That was another question I had for you. Do
you keep in touch with other chanpon people?
Do you see other people with similar backgrounds where you are
I think probably, in my generation, I am the only one.
I�ve never thought of it. Maybe it is unusual.
I�ve always thought that in order to be effective, I certainly had to
be in the center of things. One has
to make an effort. It�s not easy,
but it becomes easier as the time goes on, once you�re there.
But Joi is in the center of everything!
not nearly as much.
I think it has become easier now, for people in our
I think that I�ve always been very optimistic.
The second thing is that I�m always trying to take a negative situation
and make it into a positive. This
is basically getting back to what I said about being able to think out of the
box. It�s even an advantage today because Japanese are trained to
think in the same way. You know
what they are going to say. So you
just have to think a little bit differently.
I know what my competitors are going to do in a certain situation, so I
think then what my next step should be. It�s
very simple. In the beginning, we
had a lot of competitors in the frozen pizza industry.
And some of them are larger than we were. But I tried to take things step by step and take each problem
and really think about it. I think
most people in business then did not do as much strategic planning, and they
were just worried about today or tomorrow.
I try to think a little bit about the long-term effects of action taken
now. This is all simple stuff that
people do now, but in those days, perhaps they didn�t.
I think we were very fortunate. Eventually
most competitors fell by the wayside, and those that exist now are still very
much involved in day to day details where we sort of evolved along the way.
of the main reasons why I took the company public nine or ten years ago was the
fact that we thought that this was one thing that would make us an insider.
There were many reasons why I was an outsider.
But I thought the way to get accepted by the old establishment was to
become a member of the establishment. Very
early on, that had been one of our goals. In
order to become a public corporation now, it�s very easy with MOTHERS and
NASDAC Japan, etc. In those days,
the average time between startup and IPO was thirty years. It was incredible. There
were so many barriers that you became very old and tired by the time you did the
IPO. Just having a certain goal
really drove me and made me think of the many things between here and where I
wanted to go. While I was able to gain their respect, many of the old economy
managers were just thinking all that time, �When she is going to drop out?
When is she going to fail?�Elt;span style="mso-spacerun: yes"> So
that was the one important thing that I had to do. That opened the doors. We
were finally welcomed into the old boys�Enetwork. They realized it was not omatsuri
and an omatsuri game.
look at Joi who is so young and who has done so much.
It took me much longer to get there. I didn�t even have time to do the
outside stuff. I was concentrating
on one thing. I never joined any
government panels. Well, they
didn�t ask me to join any government panels until I passed certain stages.
I was never interested in joining other organizations or going to
seminars. That was good in some ways, but in other ways I was really in
too narrow an environment. Now
things are so different, and there are so many things going on, and everyone is
getting into the loop more and more.
Is your professional community primarily Japanese or international?
Both. My business is completely domestic. I�m
in manufacturing so I have to deal with all the retailers.
We sell to supermarkets, department stores, convenience stores, and food
service. So that means I have all
these connections. We also have to
purchase ingredients from the shousha
or from other manufacturers. The
food industry is extremely old and extremely large.
the way, we have this joint venture with Mitsubishi. I have this joint venture
with because we were buying cheese from them, and cheese is our most important
ingredient. Being in manufacturing,
we�re always doing senkou toushi and
we are always extending credit for 60 days or so to our customers.
So we always had cash flow problems.
Consequently, we used to give tegata
to our suppliers too and we kept increasing it and lengthening it out.
We were buying cheese from Mitsubishi Corporation on 60 day credit.
As the company started growing, I extended it to 90 days and finally 120
days. It�s incredible.
And finally the kansa
and people at Mitsubishi Corporation called me in and said �Your company is
not stable, and we are loaning okus
and okus to you in cheese.
So either you put up tanpo or we have to cut back.�Elt;span style="mso-spacerun: yes">
I was really worried and scared because that would cut our growth, and I
had no more tanpo to give to
Mitsubishi Shoji. Of course there
were other suppliers, but if they knew that Mitsubishi was squeezing us, they
would request the same thing. So I
thought about it for a few days and again, thinking out of the box, I came up
with the idea of forming a joint venture with Mitsubishi. This company would buy the cheese from Mitsubishi and process
and shred it and we would buy it from this company and sell it to our customers.
Because Mitsubishi Shoji would own 45%, it was their kogaisha,
and they couldn�t take tanpo from
Because we owned 55% we were oyagaisha
of this joint venture so they couldn�t request tanpo
from us. So that got us out of the
problem. Also, the sales people in
Mitsubishi wanted to sell more. It
was the auditing department that didn�t want them to take the risk. So the sales people were happy to have a constant purchaser
for their cheese. We formed the
joint venture around fifteen years ago. It�s
been profitable and contributing dividends to both oyagaisha and we never had to give any tanpo to Mitsubishi. I like to look at a problem and turn it around
to see how it could be solved. That�s
getting back to your question, my business network is in Japan, but I do a lot
of speaking at women�s conferences in the US so I have a wonderful women�s
network there. It is nice to keep
up with both. Most of the conferences I attend abroad are concerned with
Your father was entrepreneur?
My father was an entrepreneur.
think there are a lot more entrepreneurs than there used to be in Japan, though
not nearly enough. After postwar
Japan, some people were building companies and a lot of them became successful.
I read about Nick Zapetti. You hear about these people who really weren�t trained in
being entrepreneurs, but there was so much opportunity around. I was wondering
how much your education and also how much your family contributed to your of
drive to become an entrepreneur.
Because my father was a businessman, we always heard about business, the
interesting parts. He never brought
his problems home. In the old days,
everyone sat around the dinner table at six o�clock.
Now the lifestyles have changed and families aren�t sitting together at
dinner. Every night at the dinner
table my dad would talk about interesting people he�d met and the things he
did. He traveled a lot, and he
would tell us about all the fabulous countries he�d been to, and he would
always bring us presents from those countries.
We were brought up with international business and it was very
interesting. Although my mom wanted
my brothers to become professionals, a doctor, an architect, a lawyer, or
whatever, we all turned out to be business people, much to her distress, much to
my father�s pleasure. [laugh]
You mentioned how your company had creative solutions that
distinguished it from Japanese competitors.
Is there something about the corporate culture, or your company�s
management that distinguishes it from a Japanese company?
Unfortunately, it�s not as different as I would like it to be. I thought it was very important to be as Japanese as possible
in order to be accepted, to get people to work for us, and so they wouldn�t
feel so strange. I worked very hard
to make it a Japanese company. I
regret not able to break away from that.
So your staff and managers are almost all Japanese?
Not almost all. They are
Do you have plans to change that?
I think it would be very difficult for someone not fluent in Japanese.
If our company were to hire foreigners or people with international
backgrounds, I would have to hire a bunch of them at the same time, three or
four. Within a company like mine, which is very old and still
hierarchical, it�s difficult to fit in. So I would need to go out and find at
least three or four people. It is something that I am thinking about. Just
recently, I thought, oh heck with all, I�m not going to worry about doing
emails in Japanese. I still do
prefer English. I sent out emails
to my people in English whether they can read it or not. I don�t know.
They try I guess. I get
answers in Japanese which is OK. Of
course at eBay, everyone writes in English, so it�s so easy to communicate for
someone like me. Even for Japanese, it is troublesome to type in Japanese.
So I decided to make them all change for my benefit. [laugh]
But I wouldn�t do it unless I thought it was good for them.
I really believe that English deficiency is one of the things holding
Japan back from becoming a world-class leader.
Japan is never able to take initiative in international conferences
because of the need for interpreters, except for Kawaguchi Yoriko-san who is
able to chair these conferences because her English is so good.
It is not because they are not capable, it�s just that their English
capability is so low. I thought, you have to start somewhere.
So all my email is in English. I�m
sure they are quite nervous about it because Japanese are such perfectionists.
If they answer, they want to answer correctly. I get all the answers in
have quite a bilingual group now. Unlike you, I don�t stick to one thing for a
long time. I pointed out to my
group that if I tried to communicate in Japanese it took so much away from my
time and my efficiency. I figured
if I I�m the CEO, I want to save my time, so I use English. [laugh]
[laugh] Absolutely. Your notes to
iRevolution are all in English so It gave me the courage to write my notes in
Are you two the only chanponites that appear in these circles?
JI: I found that the foreign community, the expat community, stick pretty close to the American Chamber of Commerce and the American Club, and they don�t really drift into keizai douyu kai or keidanren or try to. But I think there is a new generation like ValueCommerce. They are trying to go public and their CEO, Brian Nelson, is American. That will create a new generation. Currently, I think Merle and I and Merle�s brother Ernie are probably the only people in these meetings who are more comfortable in English. So when Merle and I are talking in English at a party, people get�Elt;o:p>
They think we are kiza.
It makes them so uncomfortable. [laugh]
So normally people are used to interacting with you in
Yes. But it is a disadvantage for
me. I was at a shimon iinkai for keizai douyukai
this morning. Everyone is so
eloquent. Japanese have a way of
saying nothing by using a lot of words. If I go on that long about one thing, my
Japanese falls apart. [laugh] I
always feel very uncomfortable, so I make very short suggestions. In order to
say the same thing, they take ten minutes.
I take about thirty seconds. That
is one thing I get very nervous about. But,
Joi, you speak very well in Japanese. You
have no problem in doing it the same way as the Japanese.
Posted by Mizuko Ito at 2001年12月16日 07:15