Learning From Japan’s Remarkable Disaster Recovery

It's common in Harvard Business School classrooms to discuss the "pivot," the moment an enterprise changes direction to pursue a new strategy. On a visit to eastern Japan, MBA students talked to Masamichi Ono, CEO of chrysanthemum grower Ono Kashoen, which shifted strategy after a massive earthquake killed thousands of area residents.

"He talked about dozens of families walking from farmer to farmer, asking to find chrysanthemum flowers used for funerals," student Kazumasa Mukae (HBS MBA '14) recalls. "His understanding of his business was redefined from a simple chrysanthemum producer to a provider of closures for families who have lost their loved ones. It was memorable to hear him talk about how his mission in life was developed and how he had redefined his business."

“Post-disaster settings provide opportunities to examine the effectiveness of leadership in mobilizing people and resources in highly dynamic situations.”

Each winter, 900 HBS students dispatch around the world to see businesses up close, learn what they can about how they are run, and share their own knowledge with the leaders of a wide variety of enterprises, from mom-and-pop shops to megacorporations.

One of these programs, called the Immersion Experience Program (IXP), each year sends 30 or so potential MBAs to Japan, where they receive a unique education made possible by one of the most lethal disasters in modern history.

On March 11, 2011, a 9.0-on-the-Richter-scale earthquake unleashed a tsunami that ravaged the Tohoku region of Honshu, the largest and most populous island in Japan. Some 16,000 people were killed, hundreds of thousands displaced, and 383,000 buildings damaged-including the Fukushima Daiichi Nuclear Power facility, which suffered a meltdown of three reactors.

Teaching And Learning

Devastated but rebuilding, the Tohoku region is a fertile teaching ground, allowing students to learn how local businesses exercised disaster preparedness and recovery, and how entrepreneurs are finding opportunities for economic revival.

"Post-disaster settings provide opportunities to examine the effectiveness of leadership in mobilizing people and resources in highly dynamic situations," says Hirotaka Takeuchi, a professor of management practice who leads the annual excursion. He tells students that the course "focuses on the links between strategy and innovation that prove useful in rebuilding a region post disaster."

Over the last three years, program participants have visited with executives at dozens of organizations—Google and Yahoo!, health care organizations, even a knitting business in a fishing village. They've talked with public officials in Japan and the staff of the US Embassy, and undertaken service projects as part of their international experiential learning.

As the disaster recedes into the past, the students are shifting focus. During trips in earlier years, they studied the emergency response and rebuilding of companies. Now the emphasis is transitioning from business recovery to business creation, so students are concentrating on stories told by entrepreneurs.

In January, for instance, students met with the Anzai family, whose orchard produces apples, pears, and peaches in Fukushima. The students listened to a family member explain how the business was rebuilt, and provided their own suggestions, says Takeuchi.

Another unique aspect of the program is that participants write up their own case studies—an opportunity usually reserved for faculty.

Some of the 18 cases published or in development in the "The Great East Japan Earthquake" series include reports on Google Japan and Yahoo!; Oisix, an online natural food retailer; You Home Clinic, a provider of medical services; Fast Retailing Group, which owns a chain of apparel stores; and Lawson's, which operates more than 40,000 convenience stores.

The cases underscore disaster recovery challenges that are both universal and particularly local. A case on clothing retailer UNIQLO, for example, begins with a store manager's shifting of work schedules to increase profitability. The manager is quickly pulled aside by his regional manager and told, "UNIQLO's mission in Kesennuma is to create jobs. It is not about profitability."

Japanese students at HBS came up with the idea to write their own cases, and Takeuchi readily agreed. He works with the small teams doing the work. "This allows HBS to make a difference by leaving best practices for future generations to study when disasters hit."

An Unforgettable Lesson

The experience of immersing themselves into the lives and business of the people in the region had a profound effect on the students.

"I realized that the problems such as a decreasing workforce population and stagnant economy which Tohoku area currently has, will become problems for the whole of Japan and other advanced countries in the future," says Bunsho Kure (HBS MBA '14), now at Mitsui & Co. "By coming up with creative business models to solve those problems, Tohoku and the people in the region can become a leader for other regions or countries."

Kazumasa Mukae, also at Mitsui, says her personal management style has changed as well. "When we interviewed many Japanese CEOs, it was interesting to see how Japanese society doesn't reward people who stick out—worse, they criticize and hammer down the nail that sticks out," Mukae says. "Yet, for the CEOs who are succeeding, they care less about how they are perceived in society; they have the courage to pursue their mission no matter the adversary.

"This was a learning specific to the context of Japanese business, and to actually hear and talk to the CEOs made a foundational difference in the way I want to pursue my career in Japan."