Businesses Can Have a Soul Too

The Yanai Doctrine

Image by Bethany Legg

Regardless of religious constrains, the definition of “soul” has always been linked to human (or sometimes animal) beings. Within its theoretical definition, soul is something you can’t see or touch. Soul is rather something related to a spiritual state separated from our body that at the same time is the essence that makes us who we really are. It involves our spiritual side, morals, feelings, beliefs, and everything that makes us transcend from our limited material lives.

Now, if a person can have a soul. Can a group of people have one common soul? Or can an organization made by human beings have one?

For a long time we’ve worked and responded to a business model that can only be categorized as “soul-less”. When it’s all about the money and how much you can earn, there’s no time to think what you can really offer or even who you are. While large corporations grow overstepping people’s needs and even rights, non-profit organizations die trying to make a change, and it often seems like it’s one way or the other. If you are not profitable, it doesn’t matter what you are able to offer, you don’t have a chance. On the other hand, if you make money, it doesn’t matter what you sell, as long as you sell. To top it all, capitalism and globalization have helped as well to make soul-less businesses richer at a faster pace.

However, after the capitalist/globalization wave settled down (and we got used to it), some companies, and even some large companies, have slowly shifted their focus to a more rewarding structure where what they offer and how they offer is as important as the profit they can make from it. CEO’s, founders, and executives have slowly started to venture into changing the business conception we’ve know so far, and began to create a new model that allows businesses to have a “soul” (and make money).

Such is the example of Uniqlo’s Tadashi Yanai and his “quality comes first, then price” selling point. Before taking over and turning a single men’s tailoring store into a global casualwear giant, Yanai wrote the first of his business principles while he was still working for his father back in the 1980's. As he said: “These principles are written down because I want them to resonate with employees; because we need to choose each other: companies need to choose employees and employees need to chose employers.”

When a company has shared principles, it transcends from it’s material form into something else. When a company realizes that its structure can be sustainably successful by sharing its principles with every single employee that works in it, rather than commanding what has to be done without a purpose, it evolves into something else.

Soul is what ties every employee together. Soul is what moves a company to challenge themselves to offer something valuable that customers will appreciate and eventually consume. Soul is contributing to society, and while doing so, achieving the respect and loyalty from employees and customers. Soul is what eventually will ensure continuous success for your business.

Does your business align with any of these principles?

The Yanai Doctrine

Tadashi Yanai’s 23 management principles distilled to eight key themes. (Source: Business of Fashion)

1. Put Customers First

Yanai’s number one management principle is: “Respond to customer needs and create new customers.” The sentiment is rooted in his deeply practical experience running a single store when he first began working for his father. “Only because we have customers are we able to have a business. Therefore, customers must be at the centre of what you do. This is very commonsensical to us,” he explains. “Always cater to the needs of customers. For me, Steve Jobs is the ultimate symbol of customer centricity and user-friendliness. Unless you deliver beyond their expectations, customers will never be satisfied.”

2. Contribute to Society

For Yanai, a company’s value is intrinsically linked to the value it brings to society as a whole. Successful companies must serve society, while a company that does not exist in unity with society and only pursues its bottom line will not survive. To be accepted by employees, suppliers and consumers alike, a company must contribute to society. “As the business grew and we had many suppliers, many employees, different managers, I realised that we had to aspire to become a company that is contributing to society, otherwise we are not sustainable,” Yanai recalls. “Only after making a positive difference in society, are you able to run a healthy business.”

3. Embrace Optimism

Yanai believes great businesses must embrace “high hopes for the future” and encourages Fast Retailing’s managers to think and invest positively and proactively. “There is nothing to gain from pessimism,” he says. “If you are waiting around for fortune or luck, they will not come. Don’t be passive. Nobody can predict the future. So why don’t you venture out and create one? Those who create the future will be blessed with luck.”

4. Learn From Failure

Yanai is no stranger to failure. But over the years, he has come to see failure as a key learning opportunity. One of his most important principles reads: “Thoroughly analyse information relating to successes and failures. Remember what you learn and put it into practice the next time around.” The principle captures his iterative approach to developing a business and the way he views failure as the seed of future success. “It may not work — you may not be successful overnight. The only solution is to keep changing yourself and keep challenging yourself.”

5. Focus on the Details

Yanai often says: “God is in the details.” The comment reflects his belief in executing relentlessly with a sharp focus on perfecting what he calls “the small things.” “A gap of one millimetre makes all the diference as it widens more as we move forward,” he told Takeuchi. “The secret to success is doing the basics day in and day out until you get tired of it,” he adds. Yanai once thought he would retire from day-to-day operations by the time he was 60, but at the age of 67, he still holds the company’s operational reins as chief executive.

6. Be Your Own Critic

The importance of self-critique is captured in another of Yanai’s key principles: “Review and rethink your actions and approach to improve and renew yourself.” He practices this principle by regularly putting himself in the shoes of a highly discerning customer. “The most demanding critic can be the customer of your business, so you have to put yourself in the most discriminating customer’s shoes, then look at the exterior of the store and evaluate if it looks attractive. Then, you come into the store and evaluate whether the presentation of the merchandise is attractive, whether the sales floor associates are good enough.”

7. Connect to the World

Fast Retailing’s future is inextricably linked to success beyond Japan and Yanai has long aimed to turn Fast Retailing into a truly global organisation, making English the firm’s official language and establishing management training and innovation centres in New York, Shanghai, Paris and Singapore. “Now, everyone in the world is interconnected,” he says. “You came to visit me in Japan and we’re interacting — there is no border in front of us,” he continues. “In particular, we should be conscious to connect with customers and cater to their specific needs.”

8. Disrupt Yourself

Adapting to change is a key theme for Yanai, who is fond of comparing Uniqlo to a technology company. “The world is changing so fast. This is a new industrial revolution,” observes Yanai. “Disruption was once limited to high tech, but now it’s happening to other industries. The prime examples are Amazon, Alibaba, Uber,” he continues. “So we must transform ourselves. The clothing industry — linked to the very inception of human beings — has become obsolete. There is an opportunity to revamp the entire industry. I keep telling our people: ‘Disrupt the current model.’ Even working for a large-scale company, you need to reinvent everything from scratch.”