The Decision to Quit | Jiro Kokuryo (Dean, Faculty of Policy Management)

2009.08.31

As a business scholar, I often have the opportunity to speak with corporate executives. From these experiences, I have come to believe that the decision to stop something requires as much, if not more, energy than the decision to start something new. Especially when discontinuing a business that employs many people and generates significant sales, there is naturally a swirl of demands for explanation and opposition. It is also very difficult because there are often senior colleagues who have a strong attachment to that business.

In the late 1980s, I had the chance to closely study the management of Mr. Kotaro Higuchi of Asahi Breweries, who brought about a major revolution in the beer industry. At that time, as Asahi Breweries launched its offensive with Dry Beer, they took the drastic measure of completely halting sales of their existing flagship product, Lager Beer, and disposing of all inventory. This sent a clear message that times had changed, and it had the effect of amplifying the impact of their advertising and promotions. In retrospect, I believe the decision to stop selling Lager Beer was more profound than the decision to start selling Dry Beer.

From a management theory perspective, I think it was easier to gain consensus on what to discard because there was a clear message about what they were aiming for. It can also be said that they were able to take such a bold step because their existing business was in a critical situation at the time.

However, it must not have been as simple as it sounds in theory. I recall that during my interviews, Mr. Higuchi frequently mentioned the erection of a "monument to our predecessors." He explained that it was to show respect to those who had supported their past development, such as distributors. This drastic measure must have been a considerable burden for the channel partners as well, and I thought I understood his intention to show respect to those who had built the channels. However, now that I have started thinking about things like the next 20 years of SFC, I have come to understand on a more intuitive level why Mr. Higuchi wanted to emphasize that. Destroying or changing what your predecessors have built is no ordinary feat.

(Published on: 2009/08/31)