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The old adage that “one size fits all” is an important growth principle popularized in the 19th and 20th centuries which generated large businesses and the globalization of even larger industries. This growth principle is probably true when we are talking about building or expanding scale, but is probably less true for SME operations. However, in today’s flatter and more connected world, the adage is antithetical to growth, especially of SMEs. Recent studies have shown that behavioral context is a more important determinant of success than size. Many scholars and productivity practitioners have described the difficulties and failures of SME in adopting various business frameworks. In Japan, the assumptions about SMEs are being questioned. The recent APO project Multicountry Observational Study Mission on Quality Awards in Member Countries, conducted mainly in Fukushima prefecture and Tokyo, 24–28 August 2009, examined the Japanese SME experience in adopting the Japan Quality Award (JQA) framework and current level of success in operations. Aizuwakamatsu city played host to the two-day mission to Fukushima prefecture and introduced three key SME businesses, which were recent winners of the regional Award for Performance Excellence. The mission was attended by 17 participants from 15 member countries, who included groups of SME policymakers, business owners (including award winners), and NPO staff/award administrators.
The mission kicked off with an introduction by Director of the JQA Promotion Department Naoyuki Yanagimoto to the JQA background, the national awards, and the unique regional quality council structure along with the various promotional activities in the country. Two other key experts were invited. Prof. Rodney MacAdam from Ulster University, an SME and quality award expert, shared the European perspective on the quality management journey and the EFQM framework development and adoption in SMEs. Senior Manager Norman Lee from Techwah Industrial Engineering Corporation Limited, a Singapore Quality Award winner in 2006, shared his personal experience in the adoption of a quality award framework and challenges faced by his organization.
The mission consisted of two days of field visits and two days of lectures and a workshop. The four site visits were in Fukushima prefecture, home to the Aizukawamatsu City Quality Council. The Aizukawamatsu Regional Award was established in 2001 by the city council to promote the competitiveness of its local economy through the adoption of the regional award framework, an easier version of the national award framework. The prefecture currently does not have any national winners although it has a strong record of entrepreneurship by successful local businesses that are national and global brands. Therefore, the mission delegates first visited the city council, followed by visits to three SMEs: Eisen Shuzo Company Limited, a winner of the 2002 Aizuwakamatsu Performance Excellence Award; Aizu Mitsubishi Company Limited, a Mitsubishi dealer and service center; and Mukaitaki Hotel, a winner of the 2003 Aizuwakamatsu Performance Excellence Award. Key learning points from each visit in Aizuwakamatsu were as follows.
An integrated approach in management through a strong vision and servant leadership style of its top leaders is useful. Hard work, perserverance, determination, communication, building teamwork and trust, and strong commitment even in the face of major challenges and sometimes losses are the only true recipe for enterprises that wish to thrive and overcome difficulties. All enterprises mentioned that in the beginning, their first reason for adopting the JQA framework through the regional award was a strong desire to improve their current business conditions. They were convinced after personally studying the framework that good management practices were crucial to running a prosperous business. They also decided that continuous improvement through self-assessment processes was needed at every level of operations. Therefore, fostering the appropriate values and culture was the sustaining element allowing staff to exhibit the correct behavior and deliver the desired performance. All the business leaders acknowledged that adopting the JQA framework had been tough but the difficulties had not been insurmountable. They also noted that the framework provided them with a type of business risk management approach, giving them the ability to see beyond daily operational challenges and look ahead. Those named at the end of this report made personal presentations and hosted the site visits in their organizations.
A visit was also made to the national 1998 JQA winner Ibiza Company Limited, an exclusive branded leather bag producer based in Saitama prefecture. Chairman Shigeru Yoshida shared his company’s experiences on the journey toward excellence. He remarked that for Ibiza, adopting the JQA was a choice that made sense since the company had to be assured that it was operating in the right way to meet the quality expectations of customers. Ibiza is celebrating its 40th anniversary with more than 3,500 clients loyal to the brand.
SMEs remains a key challenge for many award administrators in the business excellence framework. Unlocking their hidden value and potential remains a crucial challenge for public policymakers and business and trade associations alike. Perhaps the answer lies not in the obvious, but in asking different questions from a new angle. As concluded in the group discussion on the last day of the mission, the ultimate question is not whether the current framework needs changing but “whether SMEs in general can afford not to adopt the framework, especially in this current economic climate while hoping to thrive in the future.”
The mission received coverage from the Japan Broadcasting Corporation and two local newspapers. APO Secretary-General Shigeo Takenaka was present during the visit to Aizukawamatsu and also gave an interview to the local media. The APO would like to thank all the business leaders from Aizukawamatsu and Tokyo for hosting visits by mission participants: Mr. Akira Tsunoda and the management team of the Aizukawamatsu Quality Management Quality Council; President Yuji Miyamori, Eisen Shuzo Company Limited; President Yuichi Hirata, Mukaitaki Hotel; Director and Board Member Masayoshi Miyamori, Aizu Mitsubishi Corporation Limited; and Chairman Shigeru Yoshida, Ibiza Company Limited.