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Business

Tomy's Dutch COO pushes sweeping reform to revive struggling toy maker

Harold George Meij, the Dutch-born COO of toy maker Tomy, center, meets with young project team members at the company's head office in Tokyo.

TOKYO -- Harold George Meij, the Dutch-born 50-year-old chief operating officer at Japanese toy maker Tomy, has been spearheading drastic management reform at the struggling company since April this year.

     With his extensive experience working for both Japanese and foreign firms, he is pressing ahead with sweeping changes in an attempt to rejuvenate the 90-year-old company.

     In recent years, a number of foreign executives have been brought into Japanese firms with high expectations for management overhauls. However, most of these attempts have ended in failure. It remains to be seen whether Meij's reform drive will be a success and whether he can bring the struggling company back to financial health.

     On Sept. 10, a team of Tomy's four employees in their 30s gathered at a meeting room in the company's head office in Tokyo. The group is one of management reform project teams, launched this spring, and has been tasked with reviewing and redesigning product brochures, sales promotion kits and marketing methods, among other things.

     The four members were initially concerned about resistance from other divisions at the company. "We are given the green light from the vice president. So, why don't we do it in a bold manner?" said Hisato Takaoka, the group leader, referring to Meij.

     Meij has created 10 project teams aimed at revamping the company at different levels, from product development to distribution channel, since he became executive vice president and COO in April this year. He has brought together young staff members mainly in their 20s and 30s and has entrusted them with the task of drawing up out-of-the-box reform plans. These project teams have a total of 100 issues to look at, including Tomy's overseas operations, and they discuss ways to cut costs to the tune of 1 billion yen ($9.05 million).

     Born in the Netherlands, Meij spent his childhood in Japan and is well-versed in Japanese culture and language. He first landed a job at Heineken Japan, moved to Unilever Japan and sold tea products, followed by stints at Japanese oral care product maker Sunstar and Coca-Cola (Japan). As a senior vice president overseeing marketing at Coca-Cola (Japan), he used a Samurai-like character as a marketing tactic for promoting the signature drink, for instance, and demonstrated his marketing skills.

     "I have worked at both Japanese and foreign firms," he said. What's more, he speaks six languages, including Dutch, Japanese, German and Indonesian. At an internal meeting on April 1, despite his fluent Japanese, Meij surprised the employees by addressing them in English, and cracked jokes to win the hearts of the younger employees.

     "My mission is to reform this company. I can take risks in decision making, which Japanese executives are prone to shun," Meij said. As such, his sweeping structural reform will begin on Wednesday with organizational restructuring. Tomy will streamline 62 units to 50, a 20% reduction, revamp the line-up of managerial staff members and lower the average age of division heads by about 5 years, among other measures. All these steps follow the early retirement of 138 employees in March last year. A further staff reduction is undecided, but the company will study that option going forward, Meij said.

     He is not especially familiar with the toy sector, but he can use that fact to his advantage. Wholesalers exert influence in the toy distribution market, but Meij is willing to take on challenges that could prompt resistance from the industry. For instance, Tomy recently started displaying its robot toys at SoftBank mobile phone shops, an unprecedented move by a toy maker.

     These measures are beginning to produce some tangible results. The company introduced in August new sales promotion gimmicks using advertisements on store shelves and other innovations, which helped boost sales by nearly 10%. It has also adopted digital technology in its product development. It released Tuesday a Choro-Q mini toy racing car that can drive autonomously and avoid objects using an infrared sensor.

     Tomy President and CEO Kantaro Tomiyama, 60, said that he leaves everything up to Meij. In 1986, Tomiyama himself had to devise a shakeup plan to reduce the payroll by more than half, in order to help sustain the ailing company, which was hit hard by the impact of the 1985 Plaza Accord. After clashing with his father, who was president at the time, he became the third president and managed to save the company. "Just as my father trusted me, I will do the same" with Meij, Tomiyama said.

     In 2006, Tomy merged with another Japanese toy maker, Takara, but has continued to suffer earnings deterioration despite a series of capital tie-ups with Japanese and U.S. funds. Its sales for fiscal 2013 fell nearly 20% from the level in 2006.

     "I would like to raise young employees' morale," Meij said, adding, "I aim to achieve a more than 10% return on equity."

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