In this episode, we explores why Japan has over 33,000 companies that have endured for more than a century. Our guest is Angad Soin, the Managing Director of ANZ and Global Chief Strategy Officer at Xero. Soin helps lead global strategy for the fintech platform and oversees operations across Australia and New Zealand.
The discussion focuses on six Zen-inspired business principles that promote longevity. The core takeaway from these principles is the importance of reinvention.
The Six Zen-Inspired Business Principles
Sharing Your Vision and Priorities: It's important to couple a vision with underlying values that provide "actionability" and guide employee behavior. For instance, Nintendo's vision of providing entertainment allowed them to evolve from a card trading company to a digital games and merchandising giant.
Having a Long-Term Vision: A vision should be enduring, actionable, and tangible. A long-term vision guides investments and choices over many years, enduring through multiple strategy cycles. For founders who want a lasting legacy, their vision should initially seem unachievable.
Your Employees and Your Customers Come First: The treatment of customers and employees must align with the long-term vision. Small business owners should build in time—quarterly, half-yearly, or yearly—to reflect on their written purpose and strategy to ensure their hiring and client choices are aligned. Course correction can involve difficult decisions, such as parting ways with a long-term employee no longer aligned with future goals.
The Harmony of Tradition and Innovation: This principle involves balancing a company’s original successful elements (tradition) with the need to evolve (innovation). The core promise—such as value, quality, or differentiation—should remain consistent even as the product changes.
Being Frugal: Frugality is not about not spending, but about allocating capital and time wisely. It also means maintaining cash reserves to have flexibility and "optionality" to make the right decisions during challenging times.
Building a System for Succession of Culture: For a lasting legacy, the company's operating principles must be systematized and passed down. This system must be built into the company's behaviors and systems, not relying on a single individual or just saying the words. New employees should be able to understand why things are done a certain way, not just that "we've always done it that way".
Rapid-Fire Recommendations
Choose the Right Investors: Businesses should select investors who are committed to the long-term vision and strategy, even if it means losing money along the way. This ensures alignment and minimizes surprises.
The Accountant's Role: Accountants and bookkeepers play an important role in advising clients on these principles. By asking clients about their "why" (e.g., whether they want a quick exit, a sale, or to hand the business down), they can tailor advice on entity structure and capital.