Sanpo Yoshi: the Japanese business principle of success through responsibility
In the Edo and Meiji periods, Japan had a class of top-tier merchants known as Omi Shonin (近江商人).
A small group of 100 or so villagers, the Omi Shonin would travel across the country selling mosquito nets, medicines, textiles and other goods from their native Omi region (present-day Shiga Prefecture), and would bring back local specialities from their travels.
Between the 17th and 19th Centuries, the Omi Shonin gradually expanded their operations and grew a national network of shops, conducting trade from Hokkaido in the north all the way to the tip of Japan’s southern Kyushu island.
By the end of the Edo period, they had become one of Japan’s most successful and influential merchant groups.
But what made the Omi Shonin so different? What was their competitive advantage?
Sanpo Yoshi
One differentiating factor about the merchants was that they travelled far and wide to do business.
This meant that being accepted by communities was an integral part of their success. The Omi Shonin had to build long-term, trusting relationships and ensure that they were liked and respected by the communities in which they operated.
This may have been one major driver behind the emergence of their unique business philosophy — Sanpo Yoshi.
The Omi Shonin’s principle of Sanpo Yoshi (三方よし), means ‘Three-Way Satisfaction’.
They ensured that their commercial transactions provided benefits to all stakeholders, not only themselves.
The benefits were split three ways:
- Urite Yoshi （売り手よし） — Good for the SELLER
- Kaite Yoshi （買い手よし） — Good for the BUYER
- Seken Yoshi（世間よし） — Good for SOCIETY
They understood that their success was entirely owed to their customers and their communities, and so they ensured to give back.
How?
They would build schools and bridges, support local shrines, and even pay taxes for poor families.
Centuries before the emergence of business buzzwords like Corporate Social Responsibility (CSR), Triple Bottom Line (TBL), B Corps, and Creating Shared Value (CSV), Omi Shonin were acting as responsible corporate citizens.
AND they were doing well, financially speaking.
The merchants were living proof of the mantra conceived by Dame Anita Roddick, founder of the Body Shop:
“Being good is good business”.
Present-Day Japan
Centuries on, many Japanese companies still live by these principles and use the Sanpo Yoshi framework to communicate their values to customers, partners, and employees.
BUT, of course, it’s not all unicorns and rainbows.
Japan has been rocked by a number of major corporate scandals in recent years (think Olympus, Kobe Steel, and most recently, Nissan), perhaps highlighting the difficulty of ensuring ethical decision-making within organisations at such scale.
And while the country maintains its position as an economic powerhouse with the world’s 3rd largest nominal GDP, Japan faces a range of complex societal challenges.
From the rapidly ageing population to frequent natural disasters and gender inequality (only 5% of senior roles in mid to large sized companies are held by women), the nation’s future depends on all levels of society — SMEs, government, civic groups, and big corporates — collectively resolving these issues.
At a time when consumers are increasingly demanding good corporate citizenship (e.g. growth of fair trade, divestment, and sustainability movements), this could be the ideal time to reassess the fundamental role of business in society and rediscover the ways of the Omi Shonin.
What’s more, with all eyes on Japan in the run-up to the Tokyo 2020 Olympic and Paralympic Games, Japanese businesses have a major opportunity to show their leadership in corporate responsibility on the global stage.
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