Fujitsu chief takes on rivals
Naoyuki Akikusa, Fujitsu's chairman , might be Japanese, but he frequently turns to traditional Chinese wisdom to improve his company's business practice.
"I'm always ready to absorb Asian management philosophy, especially from China," said Akikusa.
And it seems to be working. Since he took over Fujitsu in 2003, the loss-making domestic business of the world's No3 IT service provider after IBM and EDS has turned a corner. Its China market has been growing at an annual average of 27 percent.
Akikusa said he applied to the business world some of the ideas he had read in the works of Chinese military strategist Sun Tzu and late Chairman Mao Zedong.
"I got a lot of inspiration from the Art of War by Sun Tzu and Mao Zedong's works to run businesses," Akikusa said.
IBM, which generated more than $47 billion from services in 2005, is a formidable opponent. But Akikusa adopted "guerrilla tactics", as used by Chairman Mao. The flexible tactics have jolted IBM as Fujitsu sought ways to exploit the US giant's weaknesses.
Akikusa spends much time learning from Fujitsu's rivals. He said he follows Sun Tzu's idea that "one who knows his own strength and that of the enemy is invincible in battle".
And the outspoken CEO does not conceal his bias against US corporate management culture.
"The American corporate culture is largely based on MBA courses, textbooks and figures," he said.
In 2000, at the time when the Internet bubble was bursting, Akikusa was overseeing Fujitsu's semiconductor business in the United States. With many technology businesses going bust, Fujitsu's chip orders dropped. The slumping figures led to calls for Fujitsu to close its chip business.
But Akikusa held firm and the chip unit has now become a major driver for Fujitsu's business.
"Such an experience has taught me to always take a long-term view in business operations, which is in line with Asian and Chinese cultures, instead of the US philosophy," he said.
The CEO said modern US corporate culture leads executives to bow to revenue figures, analysts and investors and take a short-term perspective to bolster sales.
He believes business leaders can learn much from Asian and Chinese cultures to shift to a long-term tactical perspective.
Revamping Fujitsu
Since he took over Fujitsu, Akikusa has been trying to reshape the corporate culture and inject new blood to the 72-year-old company. This change is crucial to its business in China, which is an increasingly strategic market.
In June 2006, Fujitsu launched a "chief representative" mechanism. It divided its global markets into four regions, with China the only single country market.
Regional chief representatives were given greater power than previous regional heads. All of them were members of Fujitsu boards and have the right to restructure their regional businesses.
This is a dramatic change for Japanese companies, which usually keep the decision-making in Japan.
Haruhito Takeda, president of Fujitsu (China) Co Ltd, has been given larger authority and has successfully consolidated the firm's sprawling businesses ranging from services and semiconductors to electronic devices.
"Our aim is very clear. We want our businesses to rapidly expand. And the consolidation must be decided and implemented by Chinese management teams and employees," said Akikusa.
The CEO said all Japanese firms including Fujitsu need to adopt a mindset change that allows them to better compete in China. "Previously, they sat down in Japan and mapped out strategies for the China market. In the early days of their entry to China, this practice seemed to work well as there were few local rivals," he said.
"But now there have been dramatic changes to the market landscape. We need to think locally and partner with local companies to align with China's industrial policies and aeconomic growth."
In previous years, a slew of underperforming Japanese companies including Panasonic, Mitsubishi and NEC have been forced to pull out of some industries such as the mobile phone market where competition has intensified.
In many cases this was blamed on slow decision-making processes at the firms' Japanese headquarters.
"In the rapidly changing information and communications technology sector, we need to have an even faster decision-making process. The traditional Japanese practice is now largely obsolete," said Akikusa.
The consolidation of Fujitsu's businesses including 39 subsidiaries in China, especially in the communications sector, has been going well. Subsidiaries previously reported to different departments at the Tokyo headquarters, which largely undermined the firm's competitiveness in the local market.
The consolidation is already starting to pay off. Since 2003, Fujitsu has consolidated its semiconductor businesses in China.
Nantong Fujitsu Microelectronics Co, a joint venture formed by Fujitsu in East China's Jiangsu Province which focuses mainly on semiconductor assembly and testing, last year generated a profit of 100 million, up 80 percent year-on-year. It was the best performer of Fujitsu's 39 subsidiaries in China.
Akikusa said a software integration firm in Fujian Province owned by Fujitsu also saw a major business uptake, helped by its alignment strategy in China.
(China Daily 01/30/2007 page15)
