YKK unzips the competitive advantage of relentlessly benefiting others
One central philosophy has been the driving force behind the growth of YKK since the 1930s: “The Cycle of Goodness: No one prospers without rendering benefit to others.”
But wait. YKK? If you think of zippers, you’ve got the right company in mind. In addition to your favorite jeans’ zipper, they make a broad range of fasteners for automotive, safety, even space suits and diving suits.
The North and Central America Group of the Japanese-based powerhouse is based in Marietta, Georgia and its President, Jim Reed talked with goBeyondProfit about YKK’s unique culture and how they harness it for growth in every region in his care: five time zones from Canada to the tip of South America.
This idea of “rendering benefit to others” began when YKK founder Tadao Yoshida found inspiration from Andrew Carnegie’s concept of corporations’ role in society. Long before the Business Roundtable or Conscious Capitalism started talking about stakeholder capitalism, Yoshida built it as the central tenet of the organization, dubbing it the Cycle of Goodness.
When stakeholders derive benefit, the cycle returns in long-term value
“I’m perfectly comfortable using the word generosity as a common anchor word, but it’s really tied to profitability. It’s not an extra thing to do, because being generous is critical to making money,” Jim clarified.
“From our perspective, our stakeholders are the employees, customers, suppliers and the community. Now, what’s not listed there is shareholders. Because, if you take care of those four, then the shareholders will also be taken care of.”
“Many companies have a buying organization pushing suppliers to reduce the cost of items every year, no matter what,” he explained by way of example. “You can’t always do that. You need healthy suppliers, so they can innovate and provide better products to you. If they can’t invest in that innovation, they can’t provide you the best solutions in the future, so don’t beat up on them.”
In this and other examples, considering suppliers’ short-term wellbeing pays dividends in long-term mutual success.
Winning looks different when you override cynicism
Jim is a lawyer by training. He served as outside and in-house counsel elsewhere before moving to practice inside YKK.
He laughs agreeably at the idea that a cynical lawyer had some adjustment to the idea that the “Cycle of Goodness” might mean letting others win. “My legal experience would tell me to do X and then our Cycle of Goodness experience would say, ‘No, we’re going to do Y.’ Learning that was very, very helpful.”
One early lesson came when a customer complained that YKK had a defective product. “We’re really good at quality, and so we looked into it,” he recollected. “It turned out there were significant errors on the manufacturer’s part. In some cases, they were using counterfeit product, and in some cases, they were misusing our product in ways that we told them not to.
“But the customer was very upset. They had shipped to U.S. retailers who wanted it out of their stores, because it wasn’t performing well. That’s a big problem. So, you ask, ‘Who’s going to pay for this?’
“From a lawyer’s perspective you’d say we pay nothing, but YKK was wiser. We apologized for not having our instructions be clear enough, and for allowing counterfeits to exist in the market. We paid a portion of the costs associated with the remediation. From a legal perspective, there was no reason to do so, but it’s treating a customer well like this that pays off over and over. It saves costs of defending ourselves, which would outweigh the issue. We solved this issue quickly and solidified the relationship for the long term.”
Translating lofty ideals into concrete steps
“As a concept, it is not difficult to grasp. But it is difficult to get concrete thoughts on how we live out the Cycle of Goodness,” Jim said.
One of YKK’s initiatives to solve this challenge three years ago has proven so successful the entire corporation has adopted it.
The company drafted 25 “Fundamental Behaviors” and activated with processes, booklets and web pages. Everyone in the company focuses on one “behavior” each week, cycling through all 25 and then starting over again. At the beginning of every meeting, the leader reads the week’s behavior and attendees discuss it. Peer employees are invited to write timely thoughts about that concept to deepen perspectives on how they land.
It was apropos that Jim kicked off this interview by discussing the week’s behavior: Lead by Example.
“I can tell the difference between a manager who does this team dialogue well and a manager who doesn’t,” he enthuses. How? “It creates a real team, it changes people’s mindset and team chemistry. If it’s going to be a tough meeting and you first talk about good behaviors and being a good person, one way or another, it changes everybody’s mindset.
“Teams’ thought processes change. Things that are important to them pop up and you create connections that you didn’t have before.”
“When managers do it, you can see a much richer relationship with their staff. And they’re thinking in a much deeper way about how to make the company better.”
Reinforce corporate values with deep, localized engagement
Every operational entity is encouraged – and funded — to engage deeply in their local community. What does this look like? Jim’s stories are rich yet practical enough that other Georgia leaders might find applicable ideas they can use.
- Encourage autonomy in each market to engage in local community needs through activities they choose. YKK teams passionately participate in everything from river clean-ups to parades to school renovations.
- Fund each operating unit with a set number of hours to spend as they wish. And plan community engagement time like you do vacations, including cross-training team members, to minimize operational disruption and keep the lines running smoothly.
- Budget for grants to regional operating companies; match their local funding.
- Build volunteerism into other company activities: consider feeding the hungry as a team activity rather than going out for cocktails. Or spend MLK Day volunteering together rather than a day off.
- Build relationships with local elected officials. Apprise the Mayor of COVID plans or rumors about plant hirings. Keep communication flowing two-ways to ensure good partnership.
- Finally, award those who demonstrate the values. Jim talks about celebrating this important dimension of the program with the teams on the shop floor, reinforcing the values with visible leadership acknowledgement.
“We’ve launched an annual employee-nominated ‘core values’ award in every factory in the region. It’s just a plaque; there’s no check that goes with it, or anything like that, but it’s kind of a big deal. So, when I visit I’ll gather everybody together on the factory floor and we’ll talk about what this person did. They love to hear those stories. And then I’ll invite other people to start talking. And man! Once the microphone starts going around, everybody wants to talk and tell their story.”
Purpose generates “gigantic dividends” throughout the company
“People need purpose to attach to their work; they’re not working for a paycheck. So, if you can tap into that, then you’re going to end up doing better. This is truly a competitive advantage. We see the sense of pride that purpose generates. It shoots huge dividends throughout the company,” Jim says.
In addition to customer and vendor relationships, YKK sees “a palpable difference in recruiting and retention. We have people knocking on our doors that wouldn’t otherwise.”
What can others see from outside your doors?
“Any new potential employee is going to know our story, our character before they even consider contacting us about a job. They’re checking us out, and so we try to let them know what we’re like in every way we can,” Jim said.
That final thought is a powerful reminder to CEOs of every size company: people are studying your company from afar. Will the impression your company makes cause them to choose you over your competitor?
That’s the critical value to generous leadership.