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Wednesday, July 8, 2009
TAKING A CHANCE
Lean, mean business machines
'We make managers . . . think for themselves,' says Coach A President Yoshiyuki Suzuki
In the 1990s, few Japanese associated the term "coaching" with instructing and directing people toward achieving their goals in business.
But the concept has quickly gained ground in the past decade, becoming a tool for human resources development in many companies.
Yoshiyuki Suzuki, president of Coach A Co., and a few others who imported the concept from the United States have led the charge in Japan.
Coach A, established in 2001 by Suzuki and the current chairman, Mamoru Ito, with nine people, has grown into a company with 100 employees. Since its foundation it has provided executive coaching services, coaching skills training and other coaching and communications programs to more than 1,000 companies.
Unlike consulting, in which business strategies and action plans are developed based on information from clients, the coaching concept aims to improve business performance by questioning clients to ascertain their problems and targets.
"Coaching is the process of equipping people with necessary knowledge, skills and tools to achieve their goals. We don't teach them, but by asking questions from various aspects, we make managers, presidents and CEOs think for themselves (to find the answers)," Suzuki, 41, said in a recent interview.
Even though there are now numerous coaching firms, Coach A says it remains one of the two leaders in Japan, along with rival CTI Japan, set up in 2000.
Suzuki had just returned from the U.S. in 1996 after studying psychology at Middle Tennessee State University when he first heard about coaching from Ito, an acquaintance of a few years. Ito showed him an article in Newsweek that featured Thomas J. Leonard, who set up Coach University in the U.S. in 1992.
Thinking this could be a new business avenue, Ito contacted Leonard and took Suzuki along to study at Coach University, the largest institution teaching coaching training at that time.
They later signed a licensing contract with Coach University and in October 1997 founded Coach 21, Japan's first coach training program, mainly targeting individuals. They went on to establish Coach A, a spinoff specializing in services for businesses, with capital of ¥10 million.
Like other venture businesses, things weren't easy when Coach 21 started up with Suzuki as vice president. He and his colleagues had to translate 1,400 pages of text used at Coach University to create a new textbook for Japanese. Sales were sluggish.
But then Nikkei Woman, a business magazine for women, carried an article on his business.
"I clearly remember the day the article ran in the magazine. Our telephone lines were flooded with inquiries from readers about the program. I was so surprised by the impact of the article," he said.
Thanks to the article, the Coach 21 program, which was priced at ¥450,000 at that time, attracted many woman eager to embark on a new career. Once they became professionals, they could easily coach from home via the telephone.
"I can say women are always the trendsetters. At that time, most of the customers were women," Suzuki said. But his real challenge came later in 1997, when he tried to sell coaching programs to companies rather than individuals, the very foundation of the Coach A business model.
"Until then, I had never sold anything to a company. At first, I tried to sell the program to small and medium-size firms because I thought big corporations would not even listen to me. Time went by without being able to sell anything for a long time," he recalled.
Suzuki came to realize that small firms at the time had few funds to further their employees' education, so he went after bigger fish. He contacted a friend working at a major brokerage and asked him to introduce someone in the personnel department.
Then Suzuki practiced giving a presentation, finally making his pitch to the department's manager. Because of Suzuki's zeal and partly because the personnel manager wanted to introduce something new to the firm's education program, the brokerage became in 1999 the first client firm to use the coaching program. Coach A did not disclose the name of the firm in line with company policy.
"Since that firm was such a giant company in Japan, I gained a lot of confidence. After that, I began mentioning this company as our client whenever I give a sales talk. This helped convince other firms to use our program, and our sales expanded rapidly," he said.
Coach A's business has continued to expand. Although the company does not disclose sales figures, Suzuki said sales last year were almost 20 times that of its initial year. The client list has grown steadily to 1,017 firms in 2008 from 140 in 2001.
The Shizuoka native said coaching was able to spread because the timing coincided with changes taking place in Japan's long-established employment system.
"The collapse of the bubble economy led to the end of lifetime employment and the seniority system, spawning more (young) managers," Suzuki said.
As Japan's organizational structure underwent rapid change, managers felt they needed to take a different approach toward their employees.
"For many years, managers led their companies based on their seniority, their experience and instincts," Suzuki said. "But now, we let them know there are methods that can raise the abilities of each employee by asking them questions and making them think proactively."
Coach A began offering executive coaching programs in English and Chinese last year. It has also set up a firm to conduct thorough research on clients before they partake in Coach A's programs.
But with the current recession, this year business isn't so bright and competition has led to a fight for survival.
In the decade up to 2008, more than 3,000 people received a coaching certificate from the Foundation of Life Learning Center under the education ministry.
Individuals who take the Coach 21 program can qualify for the certificate.
"In a way, we created our rivals by our coaching programs," Suzuki said.
But he is confident his company can take a bigger share of the market.
"Though there are now many coaching firms in Japan, there aren't many rivals targeting corporate clients," he said. "I don't think the corporate market is saturated."
Suzuki said his dream is to make Coach A a firm with professional coaches each having a specific area of expertise.
What one person can do is limited and humans have a history of achieving things by cooperating. It is the same with corporations, Suzuki said. Getting coaches involved with groups maximizes their overall performance, he said.
"For example, we don't advise on product development, but we want to help create such a platform or relationships in which people can cooperate with each other to maximize their group's power."
In this occasional series, we interview entrepreneurs whose spirit may hold the key to a more competitive Japan.