TOKYO -- Not one to let critics change the way he did business, Etsuhiko Shoyama was known for a deliberate, bottom-up management style that emphasized listening to employees during his seven years as the head of Hitachi.
Shoyama, who died Friday at the age of 84, was president of Hitachi from April 1999 to March 2006. He proved to be a bit of a maverick at the time as corporations with top-down leadership styles such as Sony and Nissan Motor were darlings of the stock market.
A hallmark of Shoyama's leadership style was to choose the brightest stars mainly from the ranks of department heads, sever them from their departments, and appoint them to plan and execute new businesses and rehabilitation plans for the company.
"Don't think as an extension of your former department. Break the bonds with your past," he would tell middle managers, seeking input into ways for Hitachi to break free from a business model dependent on hardware sales. Out of that, a service helping clients conserve energy was created.
Shoyama took the helm at a turbulent time. Hitachi had posted its first-ever net loss in fiscal 1998 due in part to a slump in its semiconductor business. Tasked with turning the company around, Shoyama said that "Hitachi has barriers," based on his experience in reorganizing in the appliances segment. He said even if there were people who wanted to change the company, they need to fight alone and without help, blunting progress on reforms.
Shoyama's bottom-up style with the managers was his way of trying to break those barriers. He also pushed for reforms at laboratories, which tend to become ivory towers. He created a forum where researchers interacted directly with client companies, allowing them to learn what technologies are sought by the market.
Shoyama strove for Hitachi to regain the vitality it had when it was known as "a band of lordless samurai," but he fell short of that goal. He was unable to implement drastic structural reforms, and Hitachi's stock price declined during his stint as president. The hard-drive business acquired from IBM was later sold to a U.S. company.
It wasn't until Shoyama left the company that Hitachi started to withdraw from unprofitable businesses, conduct group reorganization and get back on its feet by focusing on its social infrastructure business, under the leadership of Takashi Kawamura and Hiroaki Nakanishi.
The lesson to be learned from Shoyama's leadership may be that employees will have little to show for their hard work without the company's business structure constantly evolving to generate profit.
Shoyama embraced and practiced the principle that "a company is its people," but his leadership style was often seen as soft by those who see a publicly traded company's main purpose is to generate profit.
Hitachi's past leaders show that a chief executive is asked to pursue both.