Spirit of enterprise

Upstairs from the canteen at Suntory’s Tokyo headquarters is a small room with a grand purpose. Its walls are lined with staves of old whisky casks and ads for the Japanese beverage giant’s best-known spirits. Around the room, tables are inscribed with the favourite sayings of the company’s founder, Shinjiro Torii. “Failing is fine,” reads one. “Just don’t make the same mistake twice.”

This is where the firm’s president, Takeshi Niinami, has run Suntory University since 2015. Here promising employees and managers take refresher courses in the company’s founding philosophy and long journey from wine-and-port producer to ¥2.7trn (€23bn) household name in everything from green tea to beer and whisky.

Niinami, who joined Suntory in 2014 after 12 years at the helm of Japanese convenience-store operator Lawson, personally oversees classes. He knew that if Suntory wanted to rival Nestlé or Unilever he would have to instil a greater sense of purpose and acceptance of different workplace cultures as it mounted a push beyond home turf.

“When I got here it was difficult for people to understand why they had to change,” says the 57-year-old Niinami. “The staff would meet before a meeting to discuss the agenda. Proposals would be agreed upon by senior managers beforehand and you weren’t supposed to challenge that.” He felt the company had to be more open to ideas from the rank and file and that employees had to learn to get involved. “To be global we have to speak up, to take action.”

Niinami’s appointment at Suntory shocked corporate Japan: a 117-year-old family-run enterprise turning to an outsider – the first in the company’s history – for leadership. It was rare enough to see a Japanese chief executive leaving one company to head another. Still more surprising was that Nobutada Saji, Suntory’s chairman and the grandson of its founder, was the one wooing Niinami.

Even before he arrived at Suntory, he stood out among Japanese executives. He is a fluent English speaker with an mba from Harvard Business School and a solid grasp of corporate finance; his bosses at trading house Mitsubishi picked him, while he was still in his early forties, to run its ailing subsidiary Lawson. By the time he left for Suntory he had nearly doubled Lawson’s revenues and profits and led an expansion into Thailand and Indonesia.

In person Niinami is charming and informal. He prefers to see for himself what’s happening on the front lines rather than getting the story from others. He has visited all of Suntory’s domestic and overseas factories, met with sales staff and customers and checked out bars and supermarkets in Asia, Europe and the US. “Last year I flew 200,000 miles,” he says.

Niinami didn’t think Suntory needed a drastic makeover. But the company did need to bring its recently purchased overseas brands – Paris-based soft-drinks maker Orangina Schweppes Group, Lucozade Ribena in the UK and Frucor Beverages in New Zealand – more tightly into the fold.

His priority has been making a success of Suntory’s ¥1.5trn (€14.5bn) acquisition of US spirits-maker Beam. The purchase gave the Japanese company control over Jim Beam bourbon, Courvoisier cognac and Laphroaig whisky as well as a crucial foothold in the US market. Having more products was vital for Suntory because of the global shortage of its premium whisky labels Hibiki, Hakushu and Yamazaki. Inventory was so low, in fact, that only months after his arrival Niinami ordered his management team to stop drinking the prized 30-year-old Hibiki, a blended whisky for which prices had soared to thousands of euros. “It’s a headache for me,” he says. “But I wanted to set an example that would filter down through the ranks.”

The Suntory-Beam integration got off to a rocky start. Cultural differences and communication breakdowns were common, even when discussing how to implement the Japanese manufacturing concept of kaizen (otherwise known as continuous improvement). The Americans talked about planning one or two years ahead but Japanese executives preferred to look 10 years into the future. “It’s very hard to explain Japanese culture to Americans,” says Niinami. “How to bridge the gap is always a challenge. I have an American management background but I’m not American.”

The company president got around management tensions by encouraging product collaborations. He formed the Whisky Quality Council, flying Suntory’s chief whisky blender Shinji Fukuyo and Jim Beam’s master distiller Fred Noe between distilleries in Kentucky and Yamazaki to dream up new canned cocktails. “It’s much easier for them to reach decisions than for people at the management level,” says Niinami.

It was a classic Niinami move, reflecting his faith in face-to-face interactions and his role as evangelist in chief. “My style is communicating directly, conveying my message with my own voice, not through teleconferencing or social networking,” he says. “I believe that words spoken directly can inspire people.”

Niinami doesn’t expect to stick around for long; how long, though, he won’t say. The only certainty is that he will help groom heir-apparent Nobuhiro Torii, who is executive vice-president and chief operating officer, and would be the fifth generation of the founding family in charge. “I have to complete my mission: to make the business more fit for global competition,” says Niinami. “When that’s done I’ll be ready to hand things over.”