Sustainability lesson?

April 25, 2007 at 3:00 am Leave a comment

Buddhist temple - ThailandCame across an interesting article in Business Week. It’s the story of a Japanese business that has sustained itself over 14 centuries (since the year 578 to be exact). Kongo Gumi was in the business of constructing Buddhist temples but closed down in 2006 due to a debt crisis and an unfavourable business climate.

Now, surely there are some good business lessons here! Despite Kongo Gumi’s demise, what kept the family run business going for 1,428 years? seems some sage advice is:

  • Try to pick a stable industry – easier said than done – but Kongo Gumi operated in a pretty stable business environment, Buddhism, which has existed for thousands of years. Temple construction contributed 80% of Kongo Gumi’s $67.6 million revenue in 2004. Yet, the company showed adaptability during WWII and switched to coffin manufacturing. So a core business that is flexibile during hard times potentially leads to a sustainable business.
  • A long-line of family held ownership including its last president, Masakazu Kongo, being the 40th member of the family to lead the company. The role of company president was not always inherited by the eldest son, rather it went to the son or son-in-law (who adopted the Kongo name) who exhibited the best leadership skills. Women also got a look-in, with the 38th Kongo leading the company being Masakazu’s grandmother. So presumably there was some form of consistency in message and ‘family unity’ around Kongo Gumi’s mission and vision as well as a mix of conservatism and flexibility when it came to succession planning.
  • Don’t lose your head when it comes to investments. During the 1980s ‘greed is good’ era, Kongo Gumi borrowed and invested heavily in real estate that ultimately shrank in value. By 2006, the company’s borrowings were a massive $343 million, which it could no longer service. So the temporary glitter of real estate profits may have blinded the company to the need for maintaining financial stability.
  • Keep an eye on social trends – social changes in Japan resulted in a sharp decline in contributions to temples. Demand for Kongo Gumi’s temple construction skills plummeted accordingly.

I think the title of the world’s oldest family business now goes to Hoshi Ryokan, a hotel in Komatsu, Japan, which was founded in 717. Leave a comment if you know of one that is older.


Entry filed under: Business, Curiousity, Knowledge Management, Sustainability.

Information literacy John Snow’s maps revisited

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed

Search ThinkingShift

   Made in New Zealand
     Thinkingshift is?

Flickr Photos

This work is licensed under a Creative Commons Attribution 2.5 Australia License.

ThinkingShift Book Club

Kimmar - Find me on

%d bloggers like this: