THE MONK WHO SAVED THE AIRLINES

By Ruma Dubey

Vijay Mallya needs to take lessons from Kazuo Inamori. He is the monk who saved Japan Airlines Co or JAL as it is popularly recognized, from the brink of extinction.

Three years ago, JAL had filed in for bankruptcy with $30 billion in debt, becoming one of Japan's largest ever corporate failures. But today, there has been a dramatic turnaround and the company is planning to relist its stock in an ambitious $6 billion-plus initial public offering, the year's second-largest IPO behind Facebook, making it the first company ever to return to the main board of Tokyo's stock exchange after going through Japan's version of Chapter 11 bankruptcy.

If one rewinds to three years ago, the problems faced by JAL, uncannily similar to that faced not just by Kingfisher by most of the airlines in India -  industry crises, heavy costs , Japan's high landing fees, political pressure to service unprofitable routes to small domestic airports, management missteps and burdensome government policies.

Kazuo Inamori in 1959, when he was 27 years old, founded what would become one of Japan’s most successful technology companies, Kyocera.  He is ranked as the 31st richest man in Japan and most of his wealth is diverted to philanthropy. A devout Buddhist, he was ordained a Zen priest in 1997. He too charge of JAL post his retirement in 2010 and till date, takes no salary at JAL. He is amongst few of the surviving legends of Japan’s corporate world, alongside Sony co-founder Akio Morita and auto-industry legend Soichiro Honda.

JAL’s former CEO did everything possible to cut costs, even took a bus to work, cut his pay, yet nothing helped. What helped was the entrepreneurship and philosophical vision of Kazuo Inamori, an ordained Buddhist monk. Guided by his Zen principles, he wrote a ‘JAL Philosophy Handbook’ which, many in JAL say actually helped turnaround more than the cost cutting.

Actually it was a mix of both – philosophy and harsh measures. Over a third of the work force was shed, employee benefits, even retirement benefits were trimmed and unprofitable routes were done way with. At one hangar itself, JAL able to reduce costs by 60 million yen or about $750,000 last year. What also helped was Kazuo Inamori highly placed political connections which helped JAL get a special government-coaxed $6 billion debt waiver, a $4 billion loan from a state-backed fund and tax exemptions for years which no other airline managed to get.

Apart from political connections and immense entrepreneurship vision, his philosophy towards life is extremely interesting and probably something which we should also learn to inculcate. Calling them management philosophies, his spiritual growth is obviously the guiding light. Known popularly as the ‘Kyocera Philosophy’ these principles came forth during Inamori’s pursuit to seek answers to some questions of life and work. The Kyocera Philosophy is based on a very fundamental idea: do the right thing as a human being, and practice this idea fairly. He has published several volumes of his thoughts on how to run a company - Amoeba Management, which is one of the most widely read books in Japan today. His logic in the book is to divide the company into small, organized units, which he calls 'amoebas.' Every amoeba member plan for themselves each amoeba unit makes its own plans under the guidance of an amoeba leader. All members of the amoeba unit pool their wisdom and effort to achieve targets. In this way, each employee takes an active role in the workplace and spontaneously participates in management. The outcome is "management by all." He also advocates precise divisional accounting, which allows an accurate grasp of the state of business in each amoeba and above all, complete transparency.

JAL too he has published a manual – JAL Philosophy Handbood and it contains various chapters of nuggets of truths of life and its philosophies. A sample – “You can look forward. Always be prepared. Things may change, that’s life. You may not have a beautiful life, but you always have a beautiful mind.” Or - wrestle in the center of the ring which means to act on challenges immediately, and not wait until you are pushed to the edge of a deadline. This is adapted from the Japanese Sumo wrestling where some wrestlers wait until they are on the very edge of the ring and about to be thrown out before they really fight to defend themselves. Other management philosophies which motivated the JAL employees to work even on 50% pay cuts - the Result of Life or Work = Attitude x Effort x Ability; live each day earnestly; your life is an expression of your mind; when you think it's time to give up, the real work begins; Conceive optimistically, plan pessimistically, and execute optimistically.

So do philosophies of life work in corporate world? Warren Buffett has proven it does and so has Inamori. After all, work is a part of life, so what applies to life, applies to work too. The revival of JAL has proven that despite all odds, if the company is run on the right principles and employees are motivated for the right reasons, any company can turnaround. Maybe Mallya needs to relearn his art of living?