Kobe Steel, Wabi-Sabi, and Kintsugi

Last week, Japanese steel giant and third largest producer of steel in Japan – Kobe Steel – admitted that it has falsified data about quality of its steel, aluminium, copper, etc for many years. The period may be even decades, and the problem is not limited to Japan, but has extended to several subsidiaries in foreign countries. Shocking!

'Shocking' is indeed an under reaction. Knowing the penchant of the Japanese for quality and developing numerous management techniques and terms used in manufacturing and service sector like Six Sigma, Kaizen, Just-in-Time, Jidoka, Muda, Mura, Muri, Poka-yoke, etc., one wonders about the contradiction existing together – high quality target versus compromising delivery standards. It was because of very high Japanese quality production that in the 1970s and 1980s developed countries in North America and Europe felt the heat of competition.

There was even an American TV programme titled, "If Japan Can…Why Can't We?" broadcast. Quality control was the buzz word and the concept of Total Quality Management (TQM) came to light, primarily in the United States, which was later developed and followed in most of the countries, including Japan. Courses on TQM are taught in universities and colleges and reference to Japanese companies is unavoidable.

With this background, it is falling from grace. But, has the world been expecting a bit too much from Japanese companies? Kobe Steel is not the first one to admit wrongdoing. Others in the recent past have been Toshiba, Toyota, Takata, Olympus, etc. What's happening?

No one is perfect – that seems to be the answer. The Persian Carpet Syndrome explains it. Carpet makers in Persia used to chip or stain a flawless and perfect carpet as it was considered that only the Almighty can create perfect things. With little similarity is the idea of Japanese 'Wabi-Sabi', which focuses on imperfection, impermanence, and incompleteness. 

These thoughts are derived from Buddhist teachings that there is nothing permanent, nothing is perfect, and nothing is complete. 'Wabi-Sabi' characterises asymmetry, austerity, roughness, modesty and closeness to nature, as it is.

It is most unlikely that the companies in Japan would have been influenced by 'Wabi-Sabi' and similar thought processes for their production schedules and targets, as the companies have been regarded as producing very high quality products for a very long time. Surely, there appears to be no contradiction between setting perfection as a goal and believing in 'Wabi-Sabi'. Also, not everyone in Japan follows 'Wabi-Sabi'. Thus, the answer lies somewhere else. Could it simply be greed, or performing better at the stock market? Is it coming from enormous shareholder pressure to outperform? That is possible, and the chances are quite high. In the zeal of moving higher and higher in the market, quality might have suffered. The unescapable delivery deadlines can be the reason. Why companies take such a big risk of compromising with their own achieved standards?

If this is happening in Japan, one shudders at the thought of what might have been happening in India? With 'chalta hai' (it's fine) attitude, quality products are a rarity in the country and despite efforts being made by the Bureau of Indian Standards with its ISI mark – earlier called as Indian Standards Institution – markets are flooded with horrendous quality products. There are, of course, some high quality goods of global standards manufactured in India also available.

What can Kobe Steel do now? Its reputation and share price have gone down drastically. Consumers' trust has been broken. Now is the time for Kobe to resort to another Japanese technique called 'Kintsugi', which means golden joinery. It is also called 'Kintsukuroi.' It is a method in which broken pottery is repaired with a powder often golden in colour, and the repair marks are fully visible, rather than made invisible or disguised. Philosophically, it is acceptance of imperfection; showing cracks and repairs; acknowledging the fact that things will be damaged but can still be used.

It is a fantastic idea to accept and move on with life. Kobe Steel, hopefully, will do the same.

The author is a professor at IIM-A,
akagarwal@iima.ac.in