Never Waste A Crisis Lixil, Japan’s Multinational Construction Giant


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The COVID-19 pandemic has generated a shadow boom in media variations on the “never waste a crisis” theme. When major crises arrive, a small army of authors and promoters advocate changes in the economy, polity or culture that they see as long-overdue imperatives.

This year’s annual Opera America and League of American Orchestra conferences, held virtually, were permeated by debates between proponents of the never-waste-a-crisis worldview versus the it’s-rough-now-but-things-will-settle-back-to-normal perspective.

This debate permeates every sector of the economy, politics and culture. In this article, I focus on how the COVID-19 pandemic has transformed, in record time, the practices of a giant Japanese multinational corporation, Lixil. Will its innovations survive the COVID-19 crisis? Do they have any bearing on classical music?

Machiavelli and the COVID-19 Pandemic

We’re not far away from the last “never waste a crisis” conjuncture in world history: the Great Recession of 2008-10, followed by a slow and partial recovery. The quotation that went around the world came from President Barack Obama’s right-hand man, Rahm Emanuel.

Emanuel was not the first to produce a memorable quotation about not wasting a crisis. Googling took me back to Winston Churchill and then to Niccolò Machiavelli, the source of a shared philosophy among the leaders who successfully leverage crises: nice guys don’t win ball games.

Over the past two months I’ve sat through more Zoom hours than I care to count up. Positions in the discussions about classical music trend into two streams: 1) getting things back to normal; 2) seizing the occasion to move ahead. There is a parallel with the world economy as a whole, in all its diverse sectors and geographic regions.

Bucking the Incorporated Culture

We start with how the COVID-19 pandemic catalyzed a stunningly rapid transformation of Japan’s Lixil, one of the world’s biggest building-materials manufacturers, with a specifically strong position in what is politely called water-resource equipment: toilets, sinks and the like. Like undertakers, Lixil supplies things that people need, come rain or shine. It owns a dominant North American plumbing-equipment company, American Standard.

By Japanese corporate standards, Lixil’s CEO, Kinya Seto is, at 59, a youngster. He made Japanese corporate history in 2019 as the comeback kid: in the midst of his first term at Lixil, the old guard engineered his expulsion. A rare American-style “shareholders’ rights” action by Lixil stockholders bounced the old guard and reinstated Seto.

When the coronavirus hit, Seto understood its workplace implications. He upended the corporate culture that turned Japan into the global productivity leader but was now holding it back.

Like many of Asia’s rising generation, Seto combined training on home ground, Tokyo University, with graduate work at an elite Western institution, the business school of Dartmouth College. This dual background heightens a sense that moving corporations forward goes beyond counting beans better. It means leading people into new ways of doing things.

Within two months of Japan’s declaration of a COVID-19 state of emergency in early April, Seto spun around a major aircraft carrier at the speed of a patrol boat. North America’s richest performing arts company, the Metropolitan Opera, is small compared to Lixil.

On June 14, the Financial Times published a long piece on Seto’s “miraculous” resumption of power and then his determination to do much more than ride out the pandemic. “Mr. Seto … has evolved a contentious idea: that the pandemic, for all its misery, is a ‘disguised blessing’ – not just for Lixil, but for the parts of corporate Japan that realize they can use this moment to make changes that would otherwise never happen.”

When the state of emergency was declared, only two percent of Lixil employees were working from home, and reluctantly. Success in Japan traditionally involves the careful cultivation of hierarchical workplace relations. Lixil customers were also resistant to organizing their purchases at any place other than a fancy physical showroom where an expert advisor would sit with them in front of a computer terminal running state-of-the-art design software.

By force of circumstance, Lixil staff discovered that using the Japanese equivalent of Zoom for meetings with both colleagues and clients was far more efficient than traveling to multiple destinations. Clients discovered that a combination of Lixil design apps and online interaction with sales staff enabled better choices in less time.

The Japanese lockdown also made families painfully aware that their condos and houses were poorly designed for work at home while schools were closed. Typically there is only one bathroom and no dedicated room for a home office. This sparked a renovation boom and demand for new housing with bathrooms and home offices. Lixil is cashing in nicely on that as well.

It is by no means certain that Lixil’s changes and Lixil-inspired changes by other Japanese corporations will endure. Cultural inertia and the self-interest of the old guard are powerful forces. But Lixil’s success in increasing profits during a general crisis speaks volumes.

Might Kinya Seto have a taste for classical music? He has spoken about how much he loves to sing, but does not, since it’s a leader’s job in life to laser focus on his vocation.

Next stop: the 2020 Opera America plenary address by Douglas McClennan, editor of the daily Arts Journal, on how North American opera should not waste the opportunities opened by COVID-19. Plus the open debate from the virtual Opera America floor.

This page is also available in / Cette page est également disponible en: Francais (French)


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