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Should Canon’s China President Be the New Ceo In Japan ?
Open-minded and humorous, Ozawa runs China business in his unique style
Shuichi Watanabe never imagined that the farewell gifts from his Tokyo colleagues would be simply a large quantity of red ties. He "blamed" his new boss – Hideki Ozawa, president of Canon (China) Co Ltd.
"Ozawa is very famous in Canon, even among people who have never met him, because of his Passion Monday campaign," said Canon China Senior Vice-President Watanabe, who was sent to China from Tokyo a few months ago to work with Ozawa.
Passion Monday is a company rule requiring Canon’s male employees to wear red ties and female employees to wear a red accessory. The rule is unique to Canon offices in Hong Kong and in the Chinese mainland, and is credited with being behind the increase in the company’s sales revenue, which skyrocketed in two sectors after Ozawa established it.
"Mondays always make people lazy, but to a sales-driven company, Monday is a very important day," Ozawa told China Daily. "So I came up with the morale-boosting idea 13 years ago when I was in Hong Kong."
In 1999, Ozawa was sent to Hong Kong amid the Asian financial crisis to be the company’s regional vice-president. While there, he noticed that Hong Kong politicians often wear red ties on important occasions and came up with the idea of Passion Monday to inspire employees to increase sales and seek business opportunities.
"It worked very well so I brought it to Singapore and to the Chinese mainland later," said Ozawa. "Although we were in poorly performing markets then, the color red not only cheered me up, but also my employees."
When he was first appointed Canon’s China president seven years ago, the country’s relations with Japan were tense. Ozawa wondered: "How would it be possible to sell our products in a market that dislikes Japan?"
To promote a positive perception of Canon, he implemented a new company policy stating that Canon’s sales would help fund social activities to benefit local communities.
"Regardless of whether our customers like Japan or not, my goal is that they love Canon and me," he said.
For an overseas company, understanding the local culture and customers is not easy. Ozawa immediately started learning Chinese once he arrived in the country.
"Ozawa isn’t like regular Japanese bosses. He is very Westernized and has a good sense of humor," said Lu Jie, assistant director of the Canon (China) Corporate Communications Division. A veteran employee of Canon in China, Lu said that Ozawa is the only one – among the Japanese senior managers she had worked with – who uses Chinese to tell jokes and greet people.
Lu said Ozawa is always in a good mood and is passionate about his job. Ozawa’s office door is always open and any of his employees are welcome any time.
Ozawa also has many toys and drawings in his office, making it seem almost too cozy for a CEO’s workspace.
"I love my stuffed tiger toy," he said as he held it in his arms while sitting on a cartoon cushion. "I want to give my employees a relaxing and comfortable environment when they come into my office," he said.
"In Tokyo, Canon bosses are, like most Japanese, more serious, but Canon China’s culture is very open," said Watanabe.
According to Japanese culture, a CEO should be very low-key and serious, just like Canon China’s previous CEO Yoroku Adachi.
But Ozawa isn’t a typical Japanese CEO. He plays guitar at New Year’s parties and sings Take Me Home, Country Road, walks on the catwalk with models during product launches and shares jokes with his employees and business partners.
"That came from my working experience in the United States," he explained.
Ozawa was appointed to Canon US in 1978, when he was only 28. After 12 years in the US, his English became fluent and his personality more open.
"In the US, I learned that on private occasions, people call each other by their first names, which is very different from Japanese culture," he said, adding that he also absorbed Western management concepts after his stint in the US.
Although Ozawa’s management style is very Westernized, he maintains a Japanese work ethic – rigorous, meticulous and striving for perfection.
"The first Chinese word I learned from Ozawa was ‘pressure’," said Watanabe.
Ozawa was appointed to China in 2005 when Canon had only a small share of the camera market.
Last year, it had a 27.2 percent camera market share, compared with its Japanese rivals Sony Corp’s 16.8 percent and Nikon Corp’s 15.7 percent, according to domestic research firm CCID Consulting.
When Ozawa arrived in China seven years ago, he was very surprised that Canon wasn’t as famous as it was in Japan and the US, even though the brand had been in the Chinese market for 24 years.
In 1989, Canon China set up a wholly-owned company in Dalian, in Liaoning province. However, it didn’t expand aggressively until 2001, when China joined the World Trade Organization.
At the time, Canon had already penetrated many markets, and its sales revenue reached $1 billion in 2007.
"I decided to promote the brand of Canon in the Chinese market through consumer products, such as digital cameras and professional cameras, first," Ozawa said.
His passion achieved results. From 2005 to 2010, Canon’s sales revenue in the Chinese market increased more than 30 percent annually.
During the 2008-2009 financial crisis, while Canon’s global net income shrunk by 57.4 percent to $1.5 billion, the company’s net income in China increased 20 percent.
Now the company’s professional camera business takes the lead in China with a market share of 45 percent, while its digital cameras have about 30 percent of the market, ranking No 1.
"Because of the intense competition, the market share of Canon has slightly decreased since 2010, but the Chinese market will keep a steady growth rate in the next few years," said Huang Lei, senior analyst at CCID Consulting’s Consumer Electronics Industry Research Center.
According to him, the market share for digital cameras decreased from 80 percent to 62 percent in the last three years, while professional camera sales increased to 22.5 percent in 2011 from 11 percent a year before.
"China has become the largest market for our latest high-end camera, the 5D Mark III, which was released in March, and inventories are almost sold out now," Ozawa said.
He said sales revenue of Canon China is expected to reach $10 billion by the end of 2016 with 30 percent year-on-year growth this year.
The market is expected to see a 10 percent annual growth rate in the next few years, Huang said.
However, Ozawa still isn’t happy with the company’s sales performance in China.
"Canon has been in China for so many years, but most customers only know the brand through its consumer electronics products," said Ozawa. "We have to strengthen the visibility of our office products."
"China surpassed Japan to become Canon’s second-largest market two years ago, and I believe the country will become our largest market soon," he added.
According to him, Canon initially entered many overseas markets, such as the US and Europe, through its camera products. Once the brand’s image was established, the company began to diversify its product line.
After buying Dutch printer maker Oce NV for $1 billion in 2010, "we launched a commercial campaign in 2010 to drum up sales in China’s printer sector. That’s why I brought Watanabe from Tokyo to Beijing", Ozawa said.
Watanabe joined Canon’s printer business in 1977, when its home market of Japan was only familiar with the company’s cameras but not its printers.
"I think most Chinese people still use black-and-white printers, but the era of color printing will be coming soon," said Watanabe. "Japan went through the same process decades ago."
China has about 10 million SOHO (small office, home office) companies, representing a huge market for office products such as printers, projectors and photocopiers.
Canon now holds about 41 percent of the market for ink-jet printers in China, putting it in the leading position for the first time since the last quarter of 2010, according to the US-based IT research company IDC.
Canon’s printing business accounts for about 50 percent of its sales revenue in Japan, while the same division only holds a small percentage of the Chinese market.
"In the camera industry, Canon still has a good slot, but shifting to other industries may affect the company’s performance in the camera market," Huang said.
"I want to bring up the printing business sector’s percentage to at least 20 percent of our China sales revenue," Ozawa said.
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