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Lessons for Kumon: Building Consensus the Japanese Way

Akio Tsunoda, president of the Japanese holding company, Kumon Institute of Education Co., told a global management forum back in 2010 about its franchise services to its learning center owners. "I think our overseas operations are supported by our know-how, which is easily adopted in any country."  Given that Kumon has 26,000 franchised and company centers in 46 countries, it is surprising that the firm only has 34 Japanese nationals working overseas. Tsunoda later told the chain's worldwide franchisees in a conference that its founder Toru Kumon valued a learning organization.

But Kumon North America is having difficulty building consensus with its learning center owners and among its own staff. Chief Operating Officer Savio Rebelo resigned last week. His resignation shows a parting of the ways with president Akira Hamanaka. The franchisor is also having differences with its franchised business owners. Owner members of the International Association of Kumon Franchisees think Rebelo's departure is an opportunity to have a COO that is more inclusive. Their problem is that Kumon doesn't want to recognize or engage the independent trade association. 

That rift between Kumon's own executives and its franchised business owners is suprising. In their heyday, large Japanese firms and networks of affiliates, called keiretsu, were known for moving slowly, deliberately but moving right. Kumon brings to the New World a tested business culture of consensus building — even when there are diverse opinions.

Going around the roots (根回し)

Japanese Hanko stamp via Wikipedia
Japanese hanko (signature stamp). photo/Wikipedia

Japanese corporate culture is heavily rooted in consensus. Group cohesiveness is very important, something more easily achieved in Japan with its homogeneous race going back thousands of years, and built-in social pressures.

A widespread method of accomplishing consensus is the nemawashi (根回し, which literally means going from root to root, with roots representing personnel). People in a network are consulted for their ideas and feedback when a new direction for the brand is contemplated. Once this groundwork is done, which starts at a lower level and goes on up as high in the company hierarchy as necessary, and could take quite a bit of time in discussions, feedback and meetings, a paper with the new procedure in writing is circulated within the company. Each person receiving it signifies their consent to the proposal by taking out their hanko (a chop with the person's name engraved on it) and stamping it in red ink on the proposal. If someone actually doesn't agree, but feels that the proposal is inevitable, they may keep quiet at that time but stamp their hanko upside-down. Once everyone has given their okay through their red seals on the proposal, they unanimously work toward making it a success.

The hanko stamp means the managers that influence or are affected by the decision have read, discussed and ended up endorsing the document. They are responsible for the outcome, even if they're one of the rare ones who signified reluctance by stamping their name upside down.

Westerners who see this consensus but don't know about the nemawashi may be puzzled. Where's the dissension? But it is there, and it has percolated throughout the organization. In contrast Westerners often want to rush to the top of the organizational chart.

John Hancock's signature
John Hancock's Declaration of Independence signature, photo,wikipedia

What does this concept mean for Kumon North America?

It means that Kumon shouldn't withdraw from building consensus when faced with overwhelming diversity. All parties, even more independent voices that may figuratively stamp their hanko upside down, should be part of the decision-making process. As it is in Japan, so it is here. The concept is one of the best procedures to get buy-in. If Kumon North America wants its initiatives to take off, imagine how having the independent franchisee association publicly sign off on it would give the initiative wings. However, that blessing comes at a price. Franchisor Kumon North America will have to give on certain issues to accommodate the vision franchised business owners want for the brand. But Kumon will be better off for bending.

In American parlance, it is like having the factions of polite James Madison compromise and agree with mercurial Alexander Hamilton on certain fundamentals for the country and to sign off on it. That is when magic happens.

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