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Thursday, Aug 11, 2022
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Minami Fuji: The human development specialists

Interview - March 31, 2022

With over half a century’s worth of experience, Minami Fuji proudly ranks as Japan’s number one roof construction company and leads the way in human resource and business development not only in the Nippon nation, but across all of Asia. One of the reasons behind this is the focus on targeting and developing the right people. In this interview, Sadahisa Sugiyama, chairman of the board, explains how Minami Fuji has now created a human resource network spanning Asia where they train young ambitious personnel to become independent full-fledged members of society.

SADAHISA SUGIYAMA, CEO OF MINAMI FUJI CO., LTD.
SADAHISA SUGIYAMA | CEO OF MINAMI FUJI CO., LTD.

Can you give us a brief overview of your company and its business operations?

We've been doing business for 50 years and we operate in the areas of construction and HR. We are the biggest company in Japan dealing with exterior walls and construction. We also have a construction operation in China dealing with roofing and exterior walls for households.


The best in Japan for construction power and craftsmanship


Can you give us a brief introduction to your company and its operations please?

I have a computer graphics business in Vietnam, creating 8,000 orders a month. I am a professor at 18 universities in Cambodia, Vietnam, and China, and I am working on a project for the Global Management College (GMC) to train candidates to become co-owners and managers of companies by the age of 22. While MBAs focus on management development, GMC focuses on CEO development. 500 graduates are active in Japan, China and other countries. 500 graduates are active in Japan, China, and other countries, and our courses have been adopted by major Japanese companies. We have partnered with top universities, and there are no exams, only interviews to decide who to take. We teach management, creativity, and how to become a CEO. The course lasts for three months and there is no fee!


The Top 1% of talent at GMC among over 500 participants


The Japanese population has the oldest average life expectancy in the world at 85 years. More than 1/3 of the population will be over 65 by 2035, which means a reduced labor force and less demand for products in general. How has this declining demographic affected your education business and how are you reacting to this particular challenge?

First and foremost, we're not focused solely on Japan. We consider Asia as one big unit, we don’t consider individual countries alone. China and other Southeast Asian countries have a big pool of young and talented potential workers to recruit from, so there is big potential in the Asian market. We have been working on hiring many non-Japanese Asian employees and since Asia is a big market, there are many business opportunities and we have never experienced any shortage of manpower. In order to recruit high level personnel as human resources, it's important to educate them since we all have different cultural, lingual or religious backgrounds.

We provide a common education for all Asian personnel, so we have education materials in Chinese, Vietnamese, Cambodian, Japanese and many other languages, and we have this underlying basic education that we associate with all the human resources we train. We provide the same education shared in different languages so once the workers receive this common education there's no discrepancy in their ways of thinking. Varied values, religious backgrounds or languages are then no longer causes for divided thinking and instead unites us. I've been doing it for 50 years, so we are now experts in education.


Collaborating with top universities abroad and developing human resources in Asia for over 50 years


In Cambodia, there are students called "IT Meisters" who give standardized education on IT and we then send them to Japan and Asia. They are college students under the age of 22. It's free, and I've never charged tuition in 50 years. During this time, I have published 18 books and have gone on to offer scholarships.

 

Why did you decide to start your education business and what were your motivations?

The reason why we started out was because we were an SME and it was hard for us to recruit people, so I turned my eyes to other Asian nations to recruit potential candidates for our company. I actually set it up as a hobby so that it wouldn’t be too onerous to start and now this has become how we build leaders with creativity. I recently received a message from Prime Minister Kishida about how great my books are. 50 years ago, our approach to training personnel was not very intuitive and we were considered a rather strange company.


"Practical and Intellectual Creation" by Sadahisa Sugiyama presents numerous innovations based on real-life examples


As a roof and exterior wall contracting business, what is your assessment of Japan’s construction industry now, and what role will your company play in it going forward?

It's true that the aging population and fewer children is causing a big problem for Japanese society. It's inevitable, but it's important to turn your eyes to a more macro view, and not only focus on Japan. I think that the scrap-and-build approach to renewal in Japan needs to be changed into an approach characterized more by the renovation or refurbishment of existing buildings. We have five office renovation branches, but it is important to shift the Japanese mindset from building a new construction to the European idea of maintenance and longevity of buildings being the main priority.

At the same time, in order for Japan to sustain its growth, it's important to welcome foreign workers, and Japan traditionally has been isolated from global society as it's surrounded by the sea. This is why education is key in changing the Japanese mindset and making it more open. Similarly, innovation is critical so it’s not just the design of new products that is important, but the evolution of existing designs through innovation is crucial and should become more common.

I've shared some examples of how to make innovations in Japan. If you bring in students from GMC and show them Japanese architecture, they will have multiple ideas on how to improve the situation. However, if you only focus on using Japanese brains, they have only a single, uniform perspective. Having multiple perspectives or multiple brains is crucial here. Japanese people are very diligent, but they only have a narrow focus, whereas if you encourage more open mindedness, they get more ideas.

We have 3 divisions in our business. One is our exterior roofing business – the construction business. The second is our overseas business and the third is our social business, which we call a human resource development business, both domestically and overseas.

We have a school for "Hikikomori" who are extremely isolated from society and stay at home. It is said that there are about 700,000 NEETs (Not in Education, Employment or Training) and shut-ins in Japan. On the other hand, there is a shortage of human resources in all industries due to the declining birthrate and aging population. Combining these issues in Japan and Minami Fuji's strength (No.1 roofing company in Japan), we provide a comprehensive training program from recruitment to hiring and training. Students are trained to become roofers in three months at the Yokohama headquarters. We accept personnel from all over Japan. If you look at it from a different perspective, there is a lot of untapped human resources. We also provide this school free of charge and give back a portion of the revenue from our business to this project.


ROOF Meister  School


Between your construction and human resources development businesses, what synergies have you been able to establish that help your company, and which business division will you focus on most in future?

There are big synergies. In fact, our social education of human resources - working together with "Hikikomori" and NEETs – ensures students receive training for three months free of charge and in fact they're even given 80,000 yen to subsidize their living costs, and then afterwards they start working in our companies as roofing experts. We are able to mitigate the lack of human resources through the education of personnel. Overall, we are experiencing a win-win situation. I consider social development as seed planting, or investment, and that is important in achieving an advantage in the long term. For example, in GMC there are many graduates who are helping our business in many ways, including the co-ordination of translating our books into Chinese. We have an extensive human network, so it’s easy for us to launch a product.

Since it's hard to receive understanding from others, I've been saying it's my hobby to do a human development project. The Japanese Prime Minister and other people are now recognizing this as important in increasing human capacity.

 

Japan ranks 27th in the world in terms of digital competitiveness, which the Japanese government is eager to improve. Can you tell us more about how your company is helping the digital transformation which is taking place here?

There are several approaches our company is taking in order to speed up digital transformation and penetrate new areas of knowledge. One approach is providing IT education in Cambodia in collaboration with Phnom Penh University. We offer IT Meister schools to educate local university students so they could be good, talented personnel working in Asia and Japan, and at the same time we have started a Saturday school targeting employees that are over 45 years old who are not very familiar with digitalization.

As a company, we have a broad perspective on the digitalization of society. There are many hardships domestically and also globally in terms of transformation. However, if you have the wisdom, the sincerity of heart, and the flexibility of mind, you can overcome it. I always tell this to the younger generation.

 

You are very passionate about the development of Asian human resources and freedom of movement around the Asian region. Going forward, what is your vision for the development of Japan’s relationship with the rest of Asia in terms of HR?

It’s true that Asian nations should be more united. And it's true that politically speaking there are more capitalist countries than communist ones. However the young generations of all these countries now have a common understanding, a similar mindset in a way. Through education we are all able to unite and have common values together. So my goal for the project is to raise over 1000 CEOs so we can have a larger human network.

 

China is expected to be the world’s biggest economy by 2030. What is your prediction for the relationship between Japan and China and how will your company contribute to this?

In terms of politics, the structure is totally different between China and Japan, the former being a communist country and the latter a capitalist, free country. However, in terms of humans, once you have good connections on a human level, it's all the same. My son graduated from graduate school, got a masters and went to stay in China for 20 years. He came back three or four years ago. He had many businesses going on there and those businesses were thanks to the human network that we've been able to create over several years.

I've written many books – including on China - and I'm also a professor at Seika University. I have three directly-run companies in China, but because of Covid I'm not able to go there directly. However, with good human resources we have all three companies in the black. Taking the limitations of a country aside, if you connect on a human basis you can do so many things. It's not all about techniques. With sincere communication, the young Chinese generation understands my point of view. Once you know them well, and once you establish a relationship, you can even trust them more than Japanese people in fact. Global society is important of course, but we are currently focusing on Asia as one block.

 

What role does collaboration or co-creation play in your business model and are you currently looking for partners either in Japan or overseas?

In the past we didn’t have enough budget, so we didn't take any money when we visited universities or other localities. What we did is we first talked with the principle of the school and explained about our project and they wouldn't understand at first so what I’d say is, “Please let me give a lecture to the students directly” and when I had about 300-500 students listening to my lecture, their eyes started sparkling and the professor saw the attractiveness of my lectures. And they asked me to become a professor there.


Practical education for many students both at home and abroad


At the same time, I’d ask to create a GMC in the school and ask them for a classroom so we could provide education. In a way, we are entering through a cultural perspective, not through an economic perspective so we are able to integrate smoothly into the school and have a collaborative partnership with them, and we would like to continue this in other countries as well. And not only universities but other educational facilities also.We’ve also had NHK feature us about our educational products. Although our GMCs are provided free of charge, creating a human network is priceless.


GMC for Talent Development started in 2005 in China


Japan is famous for its modularization of production processes. Is modularization in construction something that you're also looking to export to perhaps in the European market or American market? What would be the best strategy to support your overseas expansion?

Yes, if there's any opportunity, we would be happy to expand overseas to Europe as well as the US. And in terms of providing roofing materials during the Covid pandemic, there are 3 essential components in human life - they are a place to live, something to eat, and something to wear. Covid may have changed some of these things but all houses always need a roof, so we hope to expand our roofing business, which is currently very successful and busy in China.

We are open to any means, including joint ventures as well as having a direct branch. Currently our Chinese branches are fully owned subsidiaries. Since China is a massive country, if we're interested in working with local companies and young entrepreneurs, we have the ability to develop human resources both in terms of leaders as well as workers so we can go anywhere and apply our educational system. In fact we have some contacts from Africa and we bring personnel from there to work in our Yokohama branch, which is one of our major branches.


A nurturing environment for workers.
Building the best network of craftsmen in Japan.


Some Japanese construction companies create unique technologies to prevent or mitigate disaster such as anti-seismic reinforced ceilings that are stronger than conventional ceilings. Do you have any unique technologies that you would like to highlight as you look to export your construction business abroad?

In fact, I was the president of a housing construction company before I became president at this company. We supply octagonal shaped housing that is resistant to earthquakes, and 16,000 of them have been built in Japan. We have patents all around the globe, including in Europe and the US, for these octagonal houses. For 30 years our business was focusing on this octagonal shaped housing and we shifted ourselves into roofing because demand for these circular houses had decreased.

However, the advantage of building circular houses, like the classic Mongolian house design, is that it is the most resistant to wind, and also, by making the shape circular we use the minimum number of materials required whilst retaining the structural strength.

We focused on making buildings circular and octagonal in shape, and that has been successful to a certain extent. We need to keep innovating. I established a branch in Helsinki to import a Finnish house, for example.

However, maintaining innovation is quite hard, so I realized that roofing would be a good business in the near future. Even in the age of digitalization, roofing construction work remains important and in demand. You can’t use automation to replace the roofing construction process, so we have shifted ourselves to become the number one roofing company in the world. We have 1200 roofing workers domestically speaking and we hope to expand globally since a house is important for protecting people’s lives as well as assets. Roofing and exterior walls are crucial components in housing.

 

Let's say for example we came back to interview you again on the last day of your term as chairman. By that time, what are your goals and dreams for the company, and what do you want to achieve?

I truly believe that tangible things will eventually break down or disappear, but intangible things will always remain. This includes the wisdom and know-how of human resource development. Since our company's management philosophy is "intangible assets," I would like to continue to create these "intangible assets," especially in the area of human resource development.

Currently, in Japan, we are working to turn people who are withdrawn into human assets. We tried to operate the GMC at a Japanese university, but it did not go well because Japanese students were somewhat reluctant. Since we were able to achieve great results in China, I would like to expand the GMC to other countries that are willing to accept it.

I am putting my energy into creating these intangible assets (wisdom, information, and networks), and every new project I try to launch is a test of creativity. If everyone says "yes" to my idea, it means that the idea already exists, so it will not be successful. On the other hand, if everyone says "no," it means that it is something new and therefore has the potential to succeed. So, having partnerships and working with people to create a new culture and new relationships is very important in terms of passing on intangible assets to the next generation.

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