Iida Sells Security in One of World’s Safest Nations
The interpreters groped for the word that captured Makoto Iida’s thought.
“He thinks he himself is a strange person,” one ventured.
“The word might be something like unorthodox or o ut of the mold , rather than strange ,” another suggested protectively.
But Iida, founder of Secom, Japan’s dominant private security company, understands more English than he usually lets on. And the chairman, as he is addressed by his employees, thought “strange” was a perfectly good word to describe his personal and business style.
“I was just born that way,” said Iida, a smiling 55-year-old with glistening black hair, who, in 26 years, has built an $850-million firm selling corporate and residential security services in one of the safest nations on earth.
Counter to Tradition
Actually, Iida, who was in Los Angeles last month to meet with executives of his American enterprises--including Irvine-based Westec Security, probably the biggest home security company in Southern California--was born to wealth and privilege.
The youngest son of one of Japan’s premier sake merchants, Iida was a college classmate of Japanese Crown Prince Akihito, and his social set includes the aristocratic young lions of Japanese industry.
In business, though, he is a self-made man. Iida never reconciled with his father over his refusal to enter the family firm; according to his own account, he was welcome at his father’s funeral only because Secom was a success.
And the elements of that success counter most that is traditional in Japanese business.
‘Long Leash’
There is, for instance, no consensus-style management at Secom. It is a onemankaisha --a publicly held company ruled by Iida and Iida alone.
“When I went to Tokyo for my first orientation . . . I think I met 140 people who said they all reported to Mr. Iida,” said Donald E. Reierson, Westec’s former president. “You asked them, ‘What is it you do?’ and the response, translated roughly, is, ‘My goal in life and in the company is to make the dream of Mr. Chairman come true.’ ”
Said Reierson, once San Diego’s deputy police chief: “In another age and another time, he would be a warlord.”
Iida’s American operations, meantime, run on a much longer leash than Japanese companies typically extend to U.S. managers.
As chief executive of Westec and Secomerica, the holding company established last year to control Secom’s growing U.S. holdings, Michael S. Kaye answers to no on-site Japanese managers and needs Iida’s approval only for acquisitions and other high-cost business moves.
That approval has come readily.
“When the chairman was over in January, we showed him a list of five or six companies that added up to $150 million in revenue,” Kaye recalled. “He said, ‘Go buy them.’ We said, ‘Oh . . . .’ ”
The independence is possible, both Iida and Kaye acknowledge, only because Kaye is fluent in Japanese and had won Iida’s trust over the years as a lawyer and consultant to Secom. But Iida insists Japanese executives need to learn from the examples of IBM and Xerox--U.S. companies whose successful operations in Japan are headed by Japanese--and put locals in charge of their American subsidiaries.
“If you have management that understands (your) ways, it’s not necessary to control these people at all,” he explained. “The point is that to get this kind of good management team is most important.”
The importance Iida places on personality was evident in the two-year courtship that preceded his acquisition of Westec in 1982. Iida visited the United States repeatedly to meet with Westec’s founder and sole owner, Thomas Kenworthy. But the discussions were unlike any business negotiation to which Kenworthy had been a party.
“It was almost as though he wasn’t interested in the company, but just in the people in the company, and me in particular, what made us tick,” said Kenworthy, now retired in Oriental, N.C. “I kept thinking we’ll talk about business, but he kept wanting to get to know one another.”
Even when he is speaking Japanese, Iida uses an English expression to express his companies’ objective-- peace of mind.
In the United States, Kaye has pursued that goal by buying an ambulance service with operations in Seattle and Pinellas County, Fla., and is weighing other health industry acquisitions. In Japan, Secom has made available a span of telecommunications services--credit checking, data processing and computer networking among them--on the telephone lines that link its electronic security systems to central control centers.
Iida also has pushed hard to develop a market for residential security systems in a country that doesn’t have to worry much about crime. Besides enlarging its sales staff in Japan last year, Secom launched a television advertising campaign that shows elegant Americans strolling serenely and securely through their electronically fortified mansions.
Their mythical address? “Beverly Hills Avenue.”
“Japanese people like America,” Iida explained, “and Beverly Hills has a very good image to Japanese people.”
In His Own Image
Iida likes America, too--according to Kaye, he even likes to drive American cars when he visits the United States. But workers say Westec has been squeezed tightly to produce profits since its purchase by Secom, and critics say the chairman lacks a clear vision for his American enterprises.
Iida concedes only that it’s less fun to be a small player in a big, well-established market than to create an industry from scratch as he did with the security business in Japan.
“He was really able to create it in his own image the way he wanted to do it,” Iida’s interpreter paraphrased, “in terms of the marketing, the pricing, the whole thing. So in that sense it’s much more interesting to him.”
Nothing strange about that.
