Long-term Business Success – It’s a matter of principles.
Successfully charting the course for an international business over more than a century is no simple task. Hiroyuki Nishiuma, CEO of Panasonic Connect Europe, explains how the philosophy of Panasonic’s founder set the tone for the seven principles that still guide all its employees faithfully today and how they have helped him steer his organisation.
Company leaders will tell you that every day in business can be a challenge. There are a host of new circumstances that can spring up to destabilise and throw it off course. These factors are numerous, from supply, production and demand issues to changing customer requirements or even geopolitical and societal developments. So international organisations that have thrived for more than a century in this challenging business environment must have found some recipe for success, right?
Panasonic is one such company and it’s the management philosophy established by our founder, Konosuke Matsushita, that has been the key ingredient in our recipe for success. By sharing the foundations of our management philosophy—the Basic Management Objective, Company Creed, and Seven Principles – with our employees, partners and customers around the world, we have established a consistent approach to business that has set the culture for the organisation and enabled us to thrive – even during the most difficult of times.
It starts with a Basic Management Objective
Originally written in classical Japanese, a text that few in today’s generation use or even understand, the language has recently been updated to contemporary Japanese but during all this time the philosophy and Basic Management Objective of the group haven’t changed:
Recognizing our responsibilities as industrialists, we will devote ourselves to the progress and development of society and the well-being of people through our business activities, thereby enhancing the quality of life throughout the world.
But words are easy to say and more difficult to live up to, so alongside this objective, Panasonic also established Seven Principles to guide our behaviours daily. In Japanese, these are known as the seven “spirits” but “principle” is a good English translation. The key thing to recognise is that these are the minimum levels of behavioural attitude that we aim hold ourselves to.
1. Contribution to Society: We must always check whether our activity is contributing to the development of society and the wellbeing of people.
2. Fairness and Honesty: We will be fair and honest in all our business dealings and personal conduct.
3. Cooperation and Team Spirit: We will pool our abilities to accomplish our shared goals. No matter how talented we are as individuals, without cooperation and team spirit we will be a company in name only.
4. Untiring Effort for Improvement: We will strive constantly to improve our ability to contribute to society through our business activities.
5. Courtesy and Humility: We will always be cordial and modest, respecting the rights and needs of others in order to strengthen healthy social relationships and improve the quality of life in our communities.
6. Adaptability: We will continually adapt our thinking and behaviour to meet the ever-changing conditions around us, taking care to act in harmony with nature to ensure progress and success in our endeavours.
7. Gratitude: We will act out of a sense of gratitude for all the benefits we have received, enabling us to overcome any obstacles we encounter.
These principles may seem simple and some even obvious when read in isolation but during challenging business times, when decisions need to be made quickly and sometimes under pressure, the strength of these guiding principles can be relied upon.
For the most recent 20 years of my Panasonic career, I have always worked on business turnaround and business transformation. In executing these business turnarounds, the seven principles have been very important in guiding me.
For example, the purpose of establishing Panasonic Connect Europe as a new organisation just over a year ago was to ensure the long-term sustainable growth of the B2B organisation, so it could continue to contribute to the development of society and the well-being of people.
This core thinking means the decisions we make are for the long-term. There are potentially many decisions and actions we could take if we wanted to achieve short-term growth. But they would not be right for the business or sustainable in our commitment to the development of society.
The other principles are also important in shaping our business. It’s the same when thinking about our team. However talented one individual might be, we will only ever achieve our long-term goals through team co-operation and spirit and working with humility and being respectful.
We should also show gratitude. A direct interpretation from the original Japanese principle translates to “Gratitude & Gratitude”; meaning to show our gratitude for the kindness that other people show us but also to consider how we reward that kindness.
Fairness and honesty are another of our key principles that lay the foundations for long-term relationships and ultimately business success. I never want to see a single euro of revenue or profit if it comes from non-compliant activities, in an unfair or dishonest way.
In essence, I use the seven principles to underpin our approach to always try to “do the right thing, in the right way” and secondly “to never give up and persist until we make it a success.” This is where the principle of Adaptability also plays an important role. Our founder, Konosuke Matsushita, firmly believed in the providence of nature and the world around us. As a result, we should look to adapt and evolve with the course of events. He used the example, “Flowing water does not fuss and fret when it meets an obstacle in its path but moves around it and goes merrily on its way. We should always meet difficulties with the same ready versatility, smoothly shifting course when necessary.”
As Panasonic Connect Europe continues to grow, I firmly believe that our long-term sustainable growth will only be achieved with this mindset. It is why it is so important to me and to all our employees. Our Basic Management Objective and Seven Principles will guide us on this journey by enabling us to “Do the right thing, in the right way” for our customers, partners and employees. Despite the time that has passed, what worked for our founder more than 100 years ago is still as important as ever today and for the future.