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Saturday, April 12, 2008

Bid to link Japan meets with growing reception


Contributing writer

When Ken Ohno's Japanese mother-in-law asked him to keep an eye on the family business in Nagano Prefecture in the late 1990s, he had little idea where it might lead.

News photo
Ken Ohno is chief executive officer of ITEC Corporation, a manufacturer of antennas and wireless gadgets.

"My father-in-law was diagnosed as diabetic when he was 50. He worsened in 1994 and died of a heart attack in 1997. Over this period, there was nothing official about my taking over ITEC, but rather, "Take a look what we do, tell us what you think. . ."

Ohno is now CEO of ITEC Corporation, moving between an office in Hiroo, Tokyo, and a factory in Shiojiri in Nagano, making antennas and other wireless gadgets. There is even an office in Seattle, run by his mother, for one good reason: "I like to have offices in the places I visit."

Ohno's American mother and Japanese father met in Kyoto. She was passing through on a round-the-world trip; he was a student at Kyoto University working part time as a tour guide.

They lived in California for some years, but then the elder Ohno was sent back to Japan by his employer: Champion Spark Plugs.

"I spent ages 5 to 17 in Honmoku, Yokohama, attending Japanese school. Then I went back to the States to live with my grandmother in Long Beach. Seriously into tennis, I wanted to test my skills on the junior circuit."

This intensity of interest lasted until junior year of college, when he changed tack to tune in with the times. He chose to study international business administration because at that time there was so much miscommunication between Japan and the rest of the world. Also, finance was the buzzword.

With a macroview of economics ("ultimate capitalism is a fascinating game") he came to Tokyo to work for Citibank, then in 1990 was transferred back to New York. By this time he had a Japanese girlfriend — the oldest of three daughters — who said that if he was going, she was going too. Now long married, they have a 15-year-old daughter of their own, and a son of 13.

Ohno returned to Japan once more, this time with his family, on behalf of Ford. "I helped launch a financial operation for Jaguar." It was at this point that his father-in-law, Isao Yamada ("a very competent mechanical engineer") became unwell.

Founded originally on timber by his own father, Yamada Lumber Company in Kiso grew over the years to become ITEC Corporation in Shiojiri.

"When my mother-in-law asked me to get involved, there was a management team and some 70 workers, producing base station antennas for cell phone networks. Initially I hung around, seeing how the business worked. Then I began auditing the company books."

After Yamada's death, "a huge void" opened up. As staff worried about their jobs and where the company was heading, long-established teamwork disintegrated into in-fighting with everyone out for themselves. This was when Ohno stepped into the breach as CEO, with a far better reaction than he could have ever imagined.

His first move toward consolidation — "though I'm still not sure I had the right to do so legally" — was to close the original office in Tokyo, giving the staff the option of moving to Nagano. He then made a full presentation to the workforce at the Shiojiri factory, explaining his plans for the company.

Today ITEC again has an office in the capital, with five staff, including sales. Also it has 130 nonunionized employees in the factory in Shiojiri, 80 of whom are women. "As my father-in-law always said, If we ever get to the point the staff want a union, that's the time to quit, because we are obviously not doing a good job as employers. I agree with him."

As an employer, Ohno likes to think of himself as "flexible" and "reasonable." The message he receives, however, is that he is stubborn. Still, he says, his way is very different to the old top-down style of management. It has not moved to the extreme of bottom-up, but rather swings somewhere in the middle. Finding such a balance has not been easy, but rather his "greatest challenge."

The company's driving force remains base station antenna development. Ohno is aware that there is an addictive element to cell phone usage, and recalls having dinner the night before with a man whose "Crackberry" (Blackberry) never left his hand all evening.

What interests him as an entrepreneurial businessman, is connecting Japan so that cell phone technology is fully available everywhere at any time. "It's still tough getting into parts of Nagano. Phones will work in many tunnels and subway stations, because that problem has been addressed. Not so the hidden valleys, the nooks and crannies."

ITEC is out-sourcing some work to China. But still, customers are willing to pay for quality and reliability in terms of delivery, and this is where the company stands firm and strong: Made in Nagano.

"We're very busy. Cell phone carriers are overlaying infrastructure, opening up new frequencies to meet demand. With antennas, customers do the core engineering work; we improve their design to make them cheaper and easier to make.

"As for the phones, users want more and more — from black and white to color, to voice, to video. I can see it getting to the point that users will not be able to bear being out of range, which is where we come in."

Another area of development is Radio Frequency Identification, or RFID. This uses wireless technology to tag assets, such as a laptop, that may be taken out of the office and might get lost on, say, a subway.

"Our tagging system helps track things down. One day, assets may be able to signal not only that they are lost, but whether they are cold or hot, wet or moving. . ."

Ohno knows that people may worry that tagging implies a loss of privacy. The subject always comes up, he says. But imagine how useful tagging would be in hospitals, where it's vital to keep tracks of doctors, nurses, wheelchairs even.

"There are two forms of RFID: active and passive. We're developing battery-driven Active RFID. It's in a pre-commercial stage, but very much on the verge of viability."

Ohno used to spend a certain number of days in the Tokyo office (reopened in 2004). Now he comes and goes as is required, which while good for the company is not always so helpful for maintaining a strong family life. Work, he admits, rules.

"I know I need to address this. My daughter says that when she is talking to me, she sees my eyes glaze over as I think of something to do with work. She'll say, 'Come back!' "

He feels guilty about his children, spending more time with his employees than he does with them. But there is just so much responsibility, so much to do to keep a small manufacturing company on track.

One thing he does not do is socialize excessively. He used to drink as part of the corporate culture here, but no longer. Being half American, he believes, cuts him some slack.

"I'm not sure what my employees think of me. I suspect that when I do something that irritates them, I'm gaijin. And that if I do something that comes as a pleasant surprise, I'm also gaijin. In between? Maybe they think of me simply as one of them."

He cannot imagine ITEC going public, simply because this has never been a goal. If it ever helps the company to do better — in attracting new talent, for example — then he might consider listing. But not for the moment. The only shareholders are family members. "Regular shareholders would just take up too energy."

Enjoying what he calls "innocent competition," he continues to play tennis, also poker, golf. . . One of five kids, and with three brothers, all very close in age, there was always an element of competition to work and play hard.

Ohno says that previously he'd never been able to relate to the passing on of business from one generation to another. Through this experience, he is beginning to feel differently. "The caring, the responsibility . . . it's very powerful."

Phone (03) 5449-7301; fax (03) 5449-2671; ITEC Corporation Web site: www.itec-corp.co.jp; E-mail address: ken.ohno@itec-corp.co.jp


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