Embracing Sustainability: Lessons from Japanese Business Philosophy

Matsubara Fumihiko
April 23, 2024   |   , Interviews, Articles
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From “mottainai” to “sanpo yoshi,” Dr. Fumihiko Matsubara shares how traditional Japanese concepts can guide modern leaders in building sustainable organizations that benefit all stakeholders.

In the face of mounting environmental challenges and growing stakeholder demands, business leaders are increasingly grappling with how to embed sustainability into the core of their organizations.

But what does it take to truly align management philosophies with sustainable practices, and how can leaders navigate the often-competing demands of profitability and environmental responsibility?

We sat down with Dr. Fumihiko Matsubara, a seasoned sustainability executive who has spent decades helping companies across industries transform their operations and uncover the mindset shifts, strategies, and frameworks that can help leaders build genuinely sustainable organizations for the long haul.

Embedded sustainability: the Japanese way

“I believe that the traditional Japanese concept of ‘mottainai,’ meaning that it’s a shame not to use it all, is a pillar of Japanese manufacturing that governs the elimination of waste,” Dr. Matsubara explains. This philosophy, deeply rooted in Japanese culture, emphasizes efficiency and the reduction of waste, aligning closely with the principles of sustainability.

Mottainai in practice can look like resourceful cooking by using food waste or leftovers in novel recipes, or a form of upcycling where everyday items that would otherwise be considered broken or discarded are reworked into something new. It can even become an artform, like the case of kintsugi, where the cracks in broken pots are filled with powdered gold or platinum – turning the breakage into an essential part of the object’s history, rather than a reason for it to be discarded.

Dr. Matsubara also points to the 165-year-old history of the Marubeni Corporation, dating back to the Ōmi merchants from Shiga prefecture. The merchants had a well-known business philosophy and concept, “sanpo yoshi”, which means “good for the seller, good for the buyer, good for society.”

Sanpo yoshi is often visualized as the intersection between the three interests of seller, buyer and society. When it comes to making sustainable practices a part of life, “it may be as appropriate today as it was 165 years ago,” Dr. Matsubara notes.

These traditional Japanese concepts provide a solid foundation for modern business leaders looking to embed sustainability into their organizations. By embracing the principles of mottainai and sanpo yoshi, companies can not only reduce waste and increase efficiency but also create value for all stakeholders, including society as a whole.

Balancing short-term and long-term objectives

One of the biggest challenges leaders face in prioritizing sustainability is the tension between short-term profitability and long-term environmental goals. Dr. Matsubara suggests that creating separate organizational structures for short-term and long-term objectives can help navigate this balancing act.

“By dividing the organization or job assignments, I think it is possible to have a group that produces short-term results and a group that focuses on long-term thinking and creating a sustainable business,” he says.

However, Dr. Matsubara acknowledges that asking all leaders to change their mindsets and prioritize sustainability is a tall order. Instead, he believes that the role of corporate leaders is to focus on creating an environment in which sustainable businesses can flourish, trusting that professionals will naturally find their way and launch more and more projects once a stable business environment is in place.

This approach allows for a gradual shift towards sustainability, without compromising the company’s ability to meet its short-term financial obligations.

Future focus

Maintaining a future-focused mindset can be a key in reshaping policies that would otherwise remain stagnant. While balancing environmental sustainability and profitability is an ongoing challenge for many businesses, Dr. Matsubara cites examples at both the national and corporate levels to illustrate how leaders can navigate this.

He points to Japanese Prime Minister Suga’s 2020 decision to commit the country to carbon neutrality by 2050, as well as Marubeni Corporation’s goal of increasing the ratio of women in new graduate hires to 40-50%. “What they all have in common is a leader who does not rely solely on past precedents to make decisions, but rather looks to the future and strongly sets out a certain direction,” Dr. Matsubara says.

One of the most important tasks a leader has is to look ahead to the future and make strategic moves, even if the task is not something that needs to be done immediately, he notes.

By setting ambitious, long-term goals and taking decisive action, leaders can drive their organizations towards a more sustainable future, even in the face of short-term challenges.

The Power of “Phygital”

When it comes to radically improving an organization’s environmental footprint, Dr. Matsubara believes that the power lies somewhere between digital data and on-the-ground insights, a concept he refers to as “phygital.”

“This ‘phygital’ perspective is important because digital alone is not expressive, and on-site alone may be too subjective to ensure objectivity,” he explains.

By combining the power of data with the nuance of on-the-ground understanding, leaders can gain a more comprehensive view of their organization’s sustainability practices and identify opportunities for improvement.

This approach is particularly relevant in the carbon credits market in Africa, where Dr. Matsubara works, as the market is still in its infancy and rules and systems are changing frequently. “The ability to respond more flexibly than usual is definitely required,” he says.

A mindset for the ages

For business leaders truly committed to developing an environmentally sustainable company for the long term, Dr. Matsubara offers a simple yet profound piece of advice: “Business leaders should have the mindset that someday, when they look back on their careers, they want to do work that they can be proud of and want their teams to do, even if no one else may be able to recognize it.”

It’s a mindset that echoes the centuries-old wisdom of the Ōmi merchants, a reminder that the most meaningful and enduring business practices are those that serve not only the bottom line but also the greater good of society.

By embracing this mindset and drawing on the lessons of traditional Japanese business philosophy, modern leaders can build sustainable organizations that create value for all stakeholders and stand the test of time.

Key takeaways:

  • Traditional Japanese concepts like “mottainai” and “sanpo yoshi” offer valuable insights for aligning management philosophies with sustainable practices.
  • Creating separate organizational structures for short-term and long-term objectives can help balance profitability and sustainability.
  • Leaders should focus on creating an environment where sustainable businesses can flourish, rather than trying to change everyone’s mindset.
  • A future-focused mindset and flexibility are crucial for navigating the challenges of embedding sustainability into business practices.

About Dr. Fumihiko Matsubara

For nearly three decades, Dr. Matsubara has worked with Marubeni Corporation. As the Deputy Regional Director and the GM of the company’s energy division, the Sub-Saharan Desk, based in Johannesburg, South Africa, he works closely with carbon credits and renewable energy markets in the continent. In 2020, he completed his PhD in Business Administration from Hosei University.

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