I once visited a founder-led company at its Osaka head office. It operated in logistics — typically considered a boring, slow-growing industry. But what caught my attention with this company was its ability to produce consistent earnings growth over very long periods of time. In fact, it had been able to increase its earnings and dividends tenfold from 2008 to 2024, writes Lawrence Lam, author of The Founder Effect.

The humble headquarters

As the lift opened and I walked into its company headquarters in downtown Osaka, I was surprised to find a cramped and small office with a particularly unimpressive reception area. It was reminiscent of those old 1980s offices where you could picture a cigarette-smoking boss in front of cream-coloured walls. I thought I had entered the wrong office. Just before I was about to turn around, I was promptly greeted and asked to sit in a reception area that felt more like a doctor’s office than a company that was turning over close to US$400 million a year. I did not mind it, though. The company was obviously not spending its capital on swish offices — another hallmark of a founder-led company.

From my initial research, I knew the company’s founder still owned about a third of the company. As a CEO in his 70s, he was old for Western standards, but he had remained as CEO since founding the company in 1995. The question for me was not about his age (we have seen leaders of the free world much older than that), but rather his energy and alignment with shareholders.

Ikigai in action

I was eventually greeted by a senior manager who turned out to have been with the company for 15 years and was employee number 20. He was the perfect host — he had the long history with the company, direct and to the point, unrehearsed in all his answers and delivered with quintessential Japanese patience. He answered all the questions I had for him.

Did the founder have energy? That was a resounding yes. Yagura-san was a sprightly 76-year-old with the personality of a young kid (this was how they described him). He had no wife and kids, and he dedicated most of his waking hours to the business.

I was told he only took one week of leave each year — an annual fishing trip to Wakayama was enough to recharge the batteries. His original goal had been to take the company to listing. Now that it had been achieved, his next goal was to continue with their international expansion. He was thinking about the next horizon of growth, which would come from acquiring small logistics companies in specific target countries. It was his life’s passion to continue growing the business.

He also believed in uncompromised financial stability, which is why the company carried little debt — a trait common with founder-led companies, as they believe in being in control of one’s own destiny and not being subject to financial covenants from lenders.

His second-in-charge, the managing director, had been with the company for over 25 years and he too owned about 4 per cent of the company, accumulated over the course of the decades of his involvement. He exuded the very concept of ikigai through his leadership — passion, use of his talents in growing a business, building something the world needs, and clearly generating a financial return for it.

Edited extract from The Founder Effect (Wiley $34.95) by Lawrence Lam, which explores the essential traits of successful executive teams and governance structures that drive sustainable growth. 

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