The word “Hitachi” means “sunrise” and if the company’s resurgence from the dark period is of any indication, then Hitachi is surely living up to its name. The man behind the Japanese conglomerate’s remarkable turnaround is none other than Hitachi, Ltd. chairman and CEO Hiroaki Nakanishi.
Soft-spoken, with a gentle countenance, Nakanishi’s management style is not one for the weak. Back in 2010 when Nakanishi assumed presidency, Hitachi has been suffering from four years of losses amounting to nearly ¥1 trillion or $12.5 billion. He made several hard, but bold decisions to restructure Hitachi: sell its profitable hard disk business, and make a game changing shift from consumer-related business to focusing on infrastructure projects such as power plants, railway projects and water treatment facilities. The Hitachi Group also worked to expand its Social Innovation Business which includes infrastructure, water, healthcare, energy, transportation, IT and security.
As a result, the company is experiencing a tremendous growth which enabled it to revise its first-half net income forecast from ¥70 billion to ¥97 billion ($801 million). Hitachi estimates a ¥310 billion net profit for the year to March 2016.
The Resident Insider
No one can accuse Nakanishi of making thoughtless decisions that involves Hitachi. After all, he’s been referred to as a consummate Hitachi “insider.”
He joined Hitachi as a young man in 1970 after finishing his Electrical Engineering degree at the University of Tokyo in Japan. After a break in the company, he took his Master of Science degree in Computer Engineering at Stanford University in California.
One of his first tasks at Hitachi as an engineer was to work on railway projects including the Shinkansen trains. He was promoted as a department manager in 1990 and has consistently climbed up the corporate ladder, becoming managing director of Hitachi Europe in 1998 and managing officer then general manager of the IT Systems Group in 2000 and 2003.
In 2004, Nakanishi moved to North America after he was chosen to run Hitachi’s overseas operations. He oversaw the company’s hard disk drive (HDD) business and one of his first orders was to find out why the HDD business wasn’t being profitable. Nakanishi found the business to be poorly managed and said, “I had no choice but to do it myself.”
Nakanishi discovered that nearly 60 percent of the hard disk drives was deemed unreliable by PC manufacturers – so he recruited executives from a competitor, fixed the product lines and manufacturing sites, resulting in the business finally turning out profits in 2008.
He was named president of Hitachi, Ltd. In 2010. It was at this time that Nakanishi decided that the hard disk drive unit, then generating profit margins of over 10 percent, was no longer a core business for the company. He then made a bold move to sell the business unit to Western Digital for $4.8 billion in 2012.
In 2014, Nakanishi became Chairman and CEO of the Japanese conglomerate.
Social Innovation
Largely responsible for Hitachi’s shift from consumer-related products to big-ticket projects, Nakanishi is all about expanding the Social Innovation Business, a campaign that offers Hitachi’s technologies and cutting-edge IT as solutions and systems to global issues.
When asked what business principle he applies to the various projects and Hitachi locations, Nakanishi offered a practical answer.
“Each region, each country has its own environment. The Japanese infrastructure is sometimes very advanced and may be fascinating to other countries but as it is, Japanese solutions cannot cross other countries because some of our solutions are not suitable for such region or country. From that view, we extend our strategic teams and have some very strategic approach in some regions. Currently, Asia and the US those two areas that are kind of a priority right now,” Nakanishi disclosed.
Ask which of the company’s Social Innovation projects he is most passionate about, he answers, “We don’t have specific preference. If we have an opportunity to contribute to such a nation or state, we have more reason to extend. Whichever technology or solution is most required in that country or region, that is my passion. It’s not about our preference.”
He adds: “However, recently, there were various discussions about water issues as a social problem. We have a big opportunity to be on these operations,” Nakanishi offered.
Off-work
When he’s not wearing his chairman and CEO hat, some Hitachi executives noted Nakanishi’s interests in climbing and cooking. He likened cooking to system engineering with the materials as the ingredients and the whole technical procedures as the cooking process. Just like in his career, Nakanishi often impresses people with his culinary skills.
Nakanishi is also generous with life lessons. At the BBC News Series’ CEO Secrets segment, Nakanishi dispensed wise pieces of advice that one can apply in business and in life.
“Make your dreams bigger and bigger. That’s very important for you to get energy. To dream is [the source of] the real energy,” Nakanishi said.
“In order to make a ‘global’ you, please try to frequently travel to many countries. [Visit] not only the developed countries but also the developing countries. This will allow you a good experience of globalization,” he remarked.
With these mindsets and daring corporate acts, the world can continue to watch Hiroaki Nakanishi with fascination and admiration.
