Tree Ring Management: Take the Long Term View and Grow Your Business Slowly
Published on: March 04, 2024
Last updated: September 04, 2024 Read in fullscreen view
Last updated: September 04, 2024 Read in fullscreen view
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Great book on management philosophy
"Tree Ring Management: Take the Long Term View and Grow Your Business Slowly” is a great book on management philosophy written by a Japanese business leader named Hiroshi Tsukakoshi, what might be considered as the ideal mindset for business leaders. His leadership and business philosophy is to take a long-term view to decision making, to grow his business and to develop his people year by year, hence “tree ring management”.
Hiroshi Tsukakoshi, the chairman of a kanten manufacturer in Nagano prefecture, aims to create a company that makes employees happy and contributes to society. His philosophy of "tree-ring management" has led to rising sales and profits for half a century, and attracts executives from major corporations like Murata Manufacturing and Toyota Group.
Key Points
- Tsukakoshi, a Japanese business leader, advocates for a long-term view in decision making, business growth, and employee development.
- Tsukakoshi's philosophy is based on taking a big picture and continuing to grow and strengthen each year.
- He compares profit to the waste produced by a healthy body, arguing that profit should be the excrement of any healthy business.
- He emphasizes the importance of establishing long-term, trustworthy relationships and having faith in suppliers.
- He believes that a business exists to make its employees happy, and that profit itself has no value; value is generated in how profit is used.
- He suggests that a company's primary goal should be to make its employees happy, and growth sales and profits are just tools used to achieve this goal.
Take the long term view
Mr. Tsukakoshi’s true philosophy is based on taking a big picture, but to continue to grow and strengthen each year. He describes his view that management should be like tree growth.
The weather of each year affects the width of the tree rings, which can expand significantly or very little, but the tree always grows larger than it did the year before. It matters not how tiny a particular ring may be—the tree should still be growing.
There are workplace connections to Japanese ideology that clarify Japanese business culture's way of thinking.
Excrement is profit
Profit is like the waste that a healthy body produces, according to Mr. Tsukakoshi. While making a profit is an essential task for every corporation, it shouldn't be the only one. He clarifies by saying:
No one sets out to become a deviant, but every healthy body excretes waste products on a daily basis. Without any effort, it appears. The secret is this. Profit should be the excrement of any healthy business.
He thinks that when businesses start to prioritize profit over other factors, they would start to make poor management choices instead of wise decisions.
"It is easy to stray into the direction of improper management methods unless you are clear that profit is just a means of building a good company.".
Using the human body as his analogy, Mr. Tsukakoshi continues to explain the characteristics of a healthy versus unhealthy organization, using terms like "well toned," "balanced," and "fit" to define a healthy company.
Mr. Tsukakoshi also writes about the significance of establishing long-term, trustworthy relationships and having faith in your suppliers.
A business exists to make its employees happy
According to Mr. Tsukakoshi, looking after his staff members is crucial. "Profit itself has no value; value is generated in the way profit is used," he asserts. He proposes that businesses should use employee happiness as a gauge of progress and utilize earnings to fund employee "happiness".
"I believe a company's primary goal should be to make its employees happy, and growing sales and profits are just tools used to achieve this goal.", he said.
Is Japanese culture better than Western culture?
Tsukakoshi, offered some insightful remarks regarding the differences between Western and Japanese cultures.
His illustration of the distinctions between trains in Japan and Europe was a fascinating look into Japanese culture from a businessman who is Japanese.
There are several times your ticket is checked at Japanese train stations: when you arrive, when you pass through several gates, when you board the train, and once more when you leave the station.
His illustration of the distinctions between trains in Japan and Europe was a fascinating look into Japanese culture from a businessman who is Japanese.
There are several times your ticket is checked at Japanese train stations: when you arrive, when you pass through several gates, when you board the train, and once more when you leave the station.
In Europe, on the other hand, it is typically assumed that travelers purchase the appropriate ticket for their intended route, hence tickets are rarely examined there.
This is intriguing since, on the whole, Japanese people follow the law and are quite honest. As Mr.
This is interesting because overall, the Japanese are very honest, rule-abiding people. Hardly anyone trying to jump on a train.
This is an example of how Japanese thinking or business practices are not necessarily Lean. All of the checking in Japan is an example of over-processing.
Is this approach similar to lean?
There are many other great ideas that Mr. Tsukakoshi puts forward in his book. Although many of the principles, such as the use of 5S and important people development concepts, are in line with Lean, he doesn’t call his management approach “Lean”.
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