How do you know if a business truly cares about you?
How do you know if they are committed to add a lot of value to you?
How do you know if they would fulfill their promises or if they are just after your money?
These are common questions among consumers and investors alike for a simple reason; there have been too many businesses that are selling their products at a price way above their value.
Apart from that, we have also heard of businesses whose management team possess questionable levels of integrity (money from investors unaccounted for, unusually high management fees without any justifying reasons, etc).
Doing what we do daily, we are often met with investors; full time and sideline, who would ask us a common question; “How do you know if a company’s management team is trustworthy?”
A few months back, one of our team members shared a video with me, which both us deemed hilarious but at the same time, posed us an example of a responsible management.
This somewhat somber yet comical 1-minute video was released by a Japanese company named Akagi Ngugyo Co Ltd as a public apology, as they have recently hiked the price of one of their products – by 10 yen (USD0.09).
Akagi Ngugyo Co Ltd is a Japanese private company that is known for making ice cream, popsicles and other frozen desserts.
(products of Akagi Ngugyo Co Ltd)
For 25 years, GariGarikun, one of their brand of popsicles that is famous among millions of Japanese school children, was selling at 60 yen (USD 0.54). This year however, following the rising costs, the price of the popsicle had to be hiked to 70 yen (USD 0.63). It is also in response to Japanese prime minister Shinzo Abe’s encouragement for businesses to inflate their prices, seeing the country’s economy have flatlined in the last few decades.
The management level then decided to record this video as a pre-emptive measure against any backlash following the price hike. The video started with the camera focusing on the company’s chairman Hideki Inoue, with a traditional folk music playing in the background (deploring about price hikes no less) and it slowly panned out, showing the company’s staff standing in front of the company’s headquarters.
Towards the end, a caption appeared;
“We held on for 25 years, but……”
“60 –> 70”
This was followed by a deep bow from the entire crew at the end of the video.
So why did we say this is a good example of a responsible management?
A good management team cares about you and how their business initiatives would affect you.
In order to be show accountability to all their customers, Akagi Nyugyo made a public apology following the price hike, even if it is only an increase of USD0.09.
(It is also good to know that Akagi Nyugyo have issued a public apology in 1991 in the Japanese newspapers, following a 10 yen hike as well)
A good management team is transparent.
The management made it clear to the public that the price hike was due to rising costs and they boldly make the price hike known to the public, instead of quietly increasing the price.
A good management team recognizes their responsibility
Akagi Nyugyo recognizes that majority of their customers for GariGarikun comprise of school children, which means the price hike would also affect the amount of money they usually spend in school. Making the hike known to the public also means making the hike known to the parents of the school children.
Apart from these 3 traits, I have also experienced a few other traits of a good management team, especially after attending AGMs (Annual General Meeting) for different companies
A good management team knows their stuff
Apart from having high levels of integrity, a good management team is also familiar with their own business and more importantly, their industry.
They are very aware of their peers’ presence and their position in the industry.
Finally, a good management team is always working to add value to their shareholders
Public or private, a good management team is always looking to add value to its shareholders, be it by growing the company organically, adding more products, starting new initiatives or engaging in business deals that could aid the company’s growth.
(I am personally aware of companies whose management team is comfortably resting on their laurels just because they are “doing good enough”)
Of course, no one can say for sure that producing a 1-minute video of public apology is sure-fire sign that a company is good.
However, the fact that Akagi Nyugyo went out of their way to come up with this video is a good start in showing that the management means business.