A recent article in The New York Times profiles a Japanese mochi business that started amid a pandemic—in the year 1000—to highlight survival lessons and the importance of taking the long view.
Naomi Hasegawa’s family began selling toasted mochi in a small shop near a shrine in Kyoto, Japan to feed travelers seeking relief from a pandemic over a thousand years ago. Amid the current crisis, the shop (called Ichiwa) takes a longer view than most, by “putting tradition and stability over profit and growth,” the article says, adding, “their resilience offers lessons for businesses in places like the United States, where the coronavirus has forced tens of thousands into bankruptcy.”
“Their No. 1 priority is carrying on,” says Kenji Matsuoka, a professor emeritus of business at Ryukoku University in Kyoto. He explains, “If you look at the economics textbooks, enterprises are supposed to be maximizing profits, scaling up their size, market share, and growth rate. But these companies’ operating principles are completely different…Each generation is like a runner in a relay race. What’s important is passing the baton.”
For most of Ichiwa’s history, the Hasegawa family has made mochi the same way—by boiling rice (in water from a small spring that runs through the shop’s cellar), pounding it into paste and shaping it into balls that they toast on wooden skewers over a small cast iron hibachi before brushing with sweet miso paste and serving warm to customers.
According to Ms. Hasegawa, surviving in business for over a millennium requires aspiring to a higher purpose than just chasing profits. In the case of Ichiwa, she says, it was the religious calling of serving the shrine’s pilgrims. Her family has declined many opportunities to expand the business—including a recent overture by Uber Eats to start online delivery. Mochi remains the only item Ichiwa sells, along with roasted green tea for a beverage.
According to the article, the Japanese companies that have endured the longest have often been defined by an aversion to risk and an accumulation of large cash reserves. Which explains, in part, why Japan has avoided the high bankruptcy rates suffered by the U.S. during the pandemic. According to Goldman Sachs analyst Tomohiro Ota, even when Japanese businesses earn profits, “they do not increase their capital expenditure.”