Japan Airlines CEO Worked For 3 Years Without Pay To Save The Company

When Kazuo Inamori took on the task of leading the turnaround of Japan Airlines Co. in January 2010, he had precisely zero experience in aviation management.

The carrier had just filed for bankruptcy with over $25bn of debt. The government intervened with a bailout and the founder of hi-tech giant Kyocera was its choice as the new chairman.

“I declined the offer numerous times because I had no clue about airlines, I didn’t even know that JAL had such a huge debt until it went bust,” 

With little experience in the sector, he was not the only person who was skeptical. Friends and family also advised him against accepting it. But in spite of those objections, he accepted the offer – without pay – because “if we couldn’t revive JAL, it would have been a huge blow to Japan’s economy which was already struggling”.

3 years later, JAL re-listed on the Tokyo Stock Exchange. It was nothing short of a miraculous turnaround. Under Mr. Inamori’s watch, the carrier reduced its workforce by one third, ditched unprofitable routes and cut down on employee benefits. Mr. Inamori’s biggest challenge, however, was changing JAL’s corporate culture which he described to be “rigid and bureaucratic”. In the 3 decades before privatization in 1987, JAL was government owned and managed. 

“I felt very uncomfortable because the company didn’t feel like a private firm at all. Many former government officials used to get golden parachutes into the firm so I am not saying that it was all JAL’s fault.”

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So how did he manage to change such a deeply rooted corporate culture?

“My simple philosophy is to make all the staff happy. It has been my golden rule since I founded Kyocera when I was 27. Not to make shareholders happy but simply to create the company that every employee is proud to work for. Many people were skeptical if such a simple philosophy would work but in the end, it did.”

Soon after his appointment, JAL issued a small booklet of Mr. Inamori’s philosophies – he was ordained as a Buddhist priest – and held compulsory sessions for staff to attend. But not everyone welcomed the moves initially. That is when he unleashed another secret weapon.

“I brought six cans of beer after these sessions or to people who were working late. After a beer or two, people opened up and told me their honest opinions. It really feels that all of our employees are united now, which is the key to the company’s revival,”

The tactic is known as nommunication in Japan – communication with drinks to facilitate informal business conversations. According to Inamori, this strategy has paid its dividends.

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