Learn the secret to immortality. Return to your roots.
Takamatsu Construction, headquartered in Osaka, Japan, specializes in construction of large scale residential condominium projects and business properties in Japan. They proudly describe their 100-year history. But dig into the balance sheet and you will find, among their 20 underlying companies, a much older story. Acquired in 2006 lies the legacy of Kongō Gumi Co., Ltd., the world’s oldest continuously operating independent company, a single family lineage for over 1,400 years. Founded in 578 AD, Kongō Gumi was formed to build the Buddhist temple Shitennō-ji. Over the subsequent centuries, despite battling warlords, foreign incursions, competing shogunates, the Meiji Restoration and matching generations of emperors, Kongō Gumi built many famous structures, including the 16th-century Osaka Castle. At the time of its acquisition, the firm’s 100 employees continued to specialize in constructing Buddhist temples. It continues to operate today as a wholly owned subsidiary of Takamatsu. Among the factors that made this incredible corporate record possible:
- Serve a stable market. Though not particularly diversified, the market for Buddhist temple construction relies on a belief system on an island kingdom that has survived for thousands of years with millions of adherents.
- Own your niche. The other important factor in the shrine-building-business? It isn’t big, and reputation matters. Kongo recognized their competitive advantage in narrow specialization. They earned a brand and served it “religiously”.
- Rely on merit. Privilege corrupts. Masakazu Kongo, the 40th member of the family to lead the firm, cites the company’s flexibility in selecting leaders. Unlike almost all ancient family enterprise, Kongo Gumi did not hand the reins to the eldest son, but rather the son – or son-in-law – who best exhibited the health, responsibility, and talent for the job.
- Flex. Necessity is the mother of invention. Prepare to bend the rules, or rewrite them as necessity demands. At Kongo, leadership didn’t always rely on a worthy son showing up like generational clockwork. Despite a highly patriarchal society, the 38th Kongo to lead the company was Masakazu’s grandmother.
Move with the market. This mix of conservatism and flexibility allowed Kongo Gumi to survive some notable hard times. During the darkest hours of the Second World War, they switched temporarily to building coffins.
- Beware trendy bets. Kongo put itself in peril too. In the 1980s, Japan’s bubble economy made debt deceptively cheap. The company leveraged heavily into real estate. Within a decade the bubble burst. Kongo’s assets collapsed.
- Diversify risk. In the 21st century, rapid social change brought about declining contributions to temples in Japan. Demand for Kongo Gumi’s temple-building services dropped sharply beginning in 1998.
This ancient example is only one model of commercial survival. Participants review origin stories of famous corporations and track the path to success, failure and reinvention. All businesses initially grow from an entrepreneur with an idea. For most successful businesses, achieving market prominence comes with an insidious risk; protecting the success of the past too often impedes the success of the future. Learn how market leaders from Xerox to Kodak to General Motors squandered futures that they had every right to own in a vain attempt to protect the past. Your business will reveal similar tendencies – all do. Then watch those great companies, including some familiar faces like GE, IBM, Nestles and Toyota who cyclically reinvent their vision, their offering, their brand and the very character of their operations, without ever losing their heritage. Plot the path of the phoenix. Learn how even large, established companies can use innovation to return to their entrepreneurial roots, and produce new sources of profitable growth.
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