Lessons from Century Club Companies

TenHaken, a management professor who had worked at Herman Miller, studied Japanese companies that had operated for more than one hundred years, of which Japan has an unusually large number, and identified what they had in common.

Her research covered surveys and interviews with long-surviving Japanese firms, most of them small and medium-sized rather than the large corporations that receive attention. The practices she reports include: maintaining relationships with employees, suppliers, customers and the local community over generations rather than transactionally; conservative financial management with low debt and substantial reserves held specifically to survive downturns without laying off staff; a stated corporate philosophy that predates the current management and constrains what the company will do; slow deliberate expansion within a defined competence rather than diversification; deliberate succession planning conducted over years, including the Japanese practice of adopting a capable successor into the family where no suitable heir exists; and treating the business as something held in trust for the next generation rather than owned outright by the current one.

She contrasts this with the American pattern of maximising current returns and treating relationships as transactions to be repriced.

The research is survey-based and the sample is selected on survival, so the practices identified are correlates rather than demonstrated causes. Japanese institutional conditions including bank relationships, employment norms and family structures differ enough that transferability is a real question, which TenHaken addresses briefly. The reference has not verified the specific research findings.