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Company undergoes bold transformation

Atsushi Kuzukawa, the founder and the president of MJ Home, a Japanese real estate company, is finishing up his thesis, soon to be submitted to the Doshisha University Graduate School of Business.

News photoAtsushi Kuzukawa, the founder and the president of MJ Home, speaks in Tokyo this month. YOSHIAKI MIURA

The thesis, based on his experience of more than a decade in the real estate business, describes the mechanism of a franchise business model and evaluates its effectiveness for developing new businesses. The thesis concludes that a hybrid business model, a combination of franchise stores and proprietary outlets, is effective in developing a new market, or in starting a new business, in the short term. Wrapping up his three-year-long academic work at the business school, Kuzukawa is now ready to test his theory out in a real business.

"We are now in the middle of transition, turning the company into an entity offering career training services for disabled persons," Kuzukawa said in an interview in Tokyo. "It is a big challenge, but we are trying to catch up with the market leader in five years."

MJ Home outlined a five-year business plan effective until 2022 that would transform the company into a provider and operator of career services for disabled persons, reducing business drag drastically on its existing real estate operations, the president said.

Under the business plan, the company is aiming at an annual revenue of ¥5 billion in the fifth year, with the number of workers to triple to about 300. Upon the completion of the plan, the career service business is expected to generate about 60 percent of the company's annual revenue, while its real estate operations, which now account for about 80 percent of annual sales, will drop to about 30 percent.

Over the next five years, most the new recruits will be assigned to the new business, and the balance of the company's workforce will be shifted in accordance with the expected sales proportions mentioned above, Kuzukawa explained. His business theory, described in the thesis for his graduation, will be used to promote the career training services nationwide.

The company plans to open up 16 training centers a year — eight franchised centers and another eight proprietary centers — to offer career training services to those with physical, mental or intellectual disabilities. Under the training program, they will learn basic career skills, including how to use personal computers and how to write resumes for job-hunting. As its first step, the company will open a training center in Yokohama in March, followed by another in Toyota City, Aichi Prefecture, in April.

"I have already had talks with financial institutions, explaining our plans," the president said

Kuzukawa's plan to enter into the business is on the back of the government's recent push calling for more employment of disabled persons in private companies, municipal and prefectural governments, as well as in the government and other public institutions. By law, these companies, governments and public institutions are required to employ a minimum proportion of disabled persons in their workforces.

As of June 1 last year, more than 474,000 disabled persons, those with physical, mental or intellectual disabilities, were in employment at private-sector companies, a 4.7 percent increase from a year earlier, according to statistics released by the Ministry of Health, Labor and Welfare. Yet, this number accounts only for 1.92 percent of the total number of workforce, falling short of the statutory 2 percent employment level.

"Those companies just don't know where to turn to find the right disabled people to hire, and we can provide them with the necessary information and the required workforce," Kuzukawa said in the interview. "We can also provide companies hiring those disabled workers with tips, advice, and the right know-how on setting up the appropriate working environment for disabled workers."

Kuzukawa is aiming for his company to be competitive with the market leader, Litalico Inc., within five years, he said. As of March 2016, the Tokyo Stock Exchange-listed Litalico had 55 career training centers for disabled persons across the country.

The hardest part of the transitional work, however, doesn't lie outside the company, but is inside. The president is now struggling to pull together the 100-plus employees toward one single new corporate vision, which has yet to come. Moreover, the company is in the middle of outlining new guidelines for pay scales and performance evaluations. As part of the reorganization measures, the company even terminated an incentive payment plan — the kind of plan that's commonly used at real estate companies, he said.

"As the result of the change, we lost some top-performing staff from our real estate business, but I think that is the cost I have to take," Kuzukawa said. "I am now trying to build something like a big family to make all the company's workers happy."

This series has been prepared in collaboration with Enjin Co., which produces and operates a video website specializing in profiles of up-and-coming Japanese entrepreneurs.