Villeroy & Boch, established in 1748, is one of the world’s largest retailers and manufacturers of consumer ceramics. It is a company with a long, proud history spanning a number of nations, including France, Luxembourg and Germany.
In Japan unfortunately, Villeroy & Boch had previously used agents to penetrate the market, with little effect, for decades. In 1997 we established a K.K. and within a few, short years, have been able to open a number of retail shops and outlets, while consolidating the existing accounts to greater profitability. There are now about 30 staff, with 9 at headquarters. While the market has been good, Villeroy & Boch still has a long way to go in Japan.
I was born in Korea, but mostly educated abroad, primarily in Canada. After the University of Toronto, I went to law school and practiced law in Canada for a few years. It was always my intention to move from law into the private, commercial world, where I could move away from billing at six minute intervals, to the business of advising, taking positions, hiring and firing, really making things happen. I joined Villeroy & Boch in 1996 out of Hong Kong, and came to Japan in late 1999.
In 2000 I read Tom Nevins’ books, hopefully with a lawyer’s mind and a businessman’s eye. You can tell that when Tom wrote Labor Pains and the Gaijin Boss (Japan Times, 1984), he was proud that he had mastered labor and trade union law, and was even making interpretations. He was already trying to make it easier and less mysterious than what attorneys dare do. Taking Charge in Japan (Japan Times, 1990) is more varied and reflects more experience.
What we have needed Tom to do for us at Villeroy & Boch so far is nowhere near as complex and impressive as most of the other cases in this book. But Tom insists on having my case in here because he says it is I who pushed him over the edge to come up with a new book. He says I am only the second client and friend who really sat him down and told him to get moving.
I told him that no one reads his books the way you would pick up a copy of Stephen King or John Irving. People read his books because those business people have specific problems they need help with. He asked me if I thought he should attach a personal note everytime someone buys his books from TMT. I told him, “Yes, because it makes it more likely that they will call TMT to get help. Why do you write the books? It is to get business, right?” Anyway, that was my answer.
In the past Tom felt that image-wise it was not a good idea, and also would seem too pushy, aggressive or desperate for business. I disagreed, and at least for a while he followed my advice – for better or worse.
I called TMT initially on April 24, 2000, and we chatted for perhaps half an hour. That day Tom sent me a “Getting Started with TMT” initial consultation hand-written enhanced agreement for 400,000 yen. (It also covered consulting on a poor performer that I was already working on with Tom.) I signed and faxed him back the same day.
Subsequently I had a four-hour meeting with Tom at TMT on May 11, 2000. That gave me enough time to hear his report on our ROE and other personnel documents and practices. I skimmed through the TMT alternative and much more complete H.R. system. It is very comprehensive, high quality material, based on his years of experience and anticipation of potential problems. It is not even thinking out of the box, as much as it is being responsive to and reacting to the problems his clients have faced over 20+ years. Better solutions for more potential problems.
That afternoon, Tom wrote up an agreement letter for 4,900,000 yen that would provide me up to 50 hours of support after implementation of our new ROE, Salary, Appraisal, Retirement and H.R. systems. During that period it would also provide limited outplacement support – “Strategic Partnering” as Tom calls it. Tom’s short and succinct agreement was processed and faxed to me at 10:11 a.m. on May 12, 2000. I signed it and faxed it back to him at 10:09 a.m., same day. So either one or both our fax machines were slightly off, or I can read faster than the speed of light. Now you can see why Tom likes me so much. (He says anyone who gives TMT money becomes his best friend.)
Am I an overly impulsive buyer? Maybe, but I also know whom I want to partner with and quality when I see it. We had been paying a lot of money to a worldwide, famous consultancy prior to this and if I was still using this firm, they would have had me fire an employee a couple of months earlier, and at ten times the severance package I was able to do it for (even before I tied up with Tom).
As a lawyer, I intuitively didn’t like what I saw about the ROE that this consultancy provided our company with. Tom’s books also helped tip me off. During our meeting, Tom gently tore our former ROE to shreds, although they were no worse than the typical ones he sees every week.
An amount of 4,900,000 yen is equivalent to one executive search fee that could likely turn sour and end up costing more than the ticket price. Anyone who thinks this through could see that TMT provides a permanent foundation that saves and makes much more money every year. TMT long ago spent the money we paid them, but our TMT systems keep generating money for us for years. So this is money well spent.
We had our TMT system delivered a couple of weeks later in June and I, along with Villeroy & Boch’s right hand man, a Japanese executive, gave Tom our feedback and changes shortly thereafter.
On the same month, we had Tom come in and handle the presentation and Q&A with our employees. It went well. There was a good bit of humor and rapport, even though we did things like cut out managers’ ability to take substitute holidays, while increasing the working hours by 30 minutes (with no further compensation), cut back two days of first year paid vacation, capped the monthly commutation allowance to 36,000 yen instead of (the legal tax free maximum of) 100,000 yen, carved out an extra month of bonus and no longer guaranteed it or the four months of summer and winter bonus that had previously been fixed and guaranteed in the ROE. There were many other fundamental changes that may have been subtler, but equally important (and too long to get into here).
A couple weeks following this, we had everything formally processed by the employee “majority representative” and approved by the Labor Standards Office.
Attorneys and consultants are a real pain in the neck. Always trying to solve problems, always trying to help. This one worked.
I took a lunch break with Tom halfway through that employee meeting on July 26th. It gave me a good chance over Indian curry to beat him up again about writing a new book.
Tom had to get even, I guess, and on the way back to our head office, above our Jiyugaoka store (on the intersection of Gakuen Dori and Suzukake Dori), he cleared his throat and haltingly said, “Jin, I think your plates are really beautiful, but you may want to do a little more with the lighting. I mean it’s not my area of expertise, but…”
I laughed and told the Labor Consultant, “it’s Wednesday, and the store is closed on Wednesdays.”
Jin Y. Choi
Villeroy & Boch Tableware Japan K.K.