Companies Have a 'Just Right' Size: What I Lost After Leading a 100-Person Company and Expanding

Introduction

'A company must continue to grow.'

How many times have I heard this phrase since becoming a business owner?

Increase sales.
Increase employees.
Expand the business.
Expand into new regions.

I believed that making things bigger was the mission of a business owner. In fact, there are many large companies in the world. So, I thought it was the right thing to do.

There are companies that employ thousands of people and have lasted for decades or even centuries. That is why I believed in growth without any doubt.

However, what I realized later was that it is not about getting bigger. It is about knowing at what size your company can exist most vibrantly.

The problem was that I pursued expansion without knowing that.

I have been in management for over 50 years.

The company I started with a few people became an organization of nearly 100 employees by its 20th year. Looking only at the numbers, one might say it was steady growth.

However, in the process, I lost something important.

It was the atmosphere of 'fun, freedom, and ease' that I cherished when I first started the company.

Looking back now, I think I was desperate to grow the company, but I did not know how to mature it.

A company of a few people was run by 'heart'

The company when I first started was truly simple. The number of employees was small. The content of the work was not that complex.

If a problem occurred, we could discuss it with everyone immediately. We all understood each other's hearts.

I myself knew the personality and family circumstances of each employee.

Even without writing down and posting a management philosophy, it was naturally conveyed through daily conversations.

'Let's make our customers happy.'
'Let's value our colleagues.'
'Let's enjoy our work.'

The company was driven by nothing more than that sentiment.

At the time, I hardly needed anything called 'management.' There was no need to doubt the employees. There was no need to create detailed rules.

Relationships of trust were the foundation of the company. However, as the number of employees increased, the situation changed.

When we reached 100 people, the old ways no longer worked

Over the course of 20 years, the company grew little by little. The number of employees reached nearly 100.

That was when I first hit a wall. I could no longer oversee everything by myself. I could no longer talk to everyone every day.

I could no longer convey our philosophy directly to each individual. So, I created an organization. I divided the company into departments and placed a manager in charge of each.

Furthermore, taking cues from large corporations, I appointed two vice presidents. I divided the company into two large organizations and created a system where each would operate with responsibility.

At the time, I thought this was the correct way to manage. Large companies have their own ways of doing things. I believed that we could not grow without organizing.

Also, from around the third year of our founding, I brought in consultants and paid high fees to learn about management. The consultants were also in full agreement.

Additionally, I went to study sessions with the two vice presidents and veteran employees to learn the systems of successful companies.

'I want to make this a better company'—that feeling was genuine. However, before I knew it, I had lost sight of the important direction.

The moment I introduced competition, colleagues became rivals

Among the systems I introduced was 'competition.' Departments competed for results. Managers competed against each other. We chased numbers.

The two vice presidents, in particular, worked very hard. Looking back now, I feel sorry for having made them compete.

At the time, I believed that would make the company stronger. It certainly had an effect in the short term.

Sales grew, employees worked harder, and the company's substance improved.

However, behind the scenes, something was beginning to break little by little. Employees who used to be colleagues had, at some point, become competitors.

'Don't lose to that department,' 'I have to beat that person in numbers'—that kind of atmosphere had been born.

People who used to help each other began to prioritize protecting their own positions.

Laughing at others' failures. Not sharing information. I could not notice those changes immediately.

It was because I, as the manager, introduced a competitive mechanism into the company. Thinking about it now, the problem was not the employees.

The problem was the environment I created. I had ignored the fact that an organization is made of people.

Companies also have a 'time to mature'

It is said that gardeners of Japanese gardens do not let trees grow freely. They think about the shape in which the tree looks most beautiful and prune the branches.

Growth is not just about letting things grow. Pruning is also growth. I realized that companies are the same.

To prune, employees must trust each other. I realized that only through trust can people become stone walls and people become castles.

A company with 10 employees has a management style possible only because there are 10. A company with 50 employees has a warmth possible only because there are 50.

It is not a matter of which one is correct.

What is important is knowing 'what is the best shape for us'.

A president's capacity is not just the power to expand

Managers are expected to have the power to grow a company. However, I think that is not all.

Perhaps the true capacity of a president is not 'how far one can expand,' but 'the ability to judge where one should stop.'

There are two types of growth.

One is 'growth through expansion,' increasing sales and the number of employees. The other is 'growth through maturity,' nurturing people, deepening philosophy, and improving the quality of the company.

I chased only the former and forgot the latter. I was obsessed with making the company bigger and put making the company better on the back burner.

What managers need is the 'courage to stop'

In a capitalist society, there is pressure to grow. If competitors get bigger, we must get bigger too.

If sales fall below the previous year, managers get anxious. Banks pull away. The feeling of 'more' does not disappear easily.

However, I realized that managers need another kind of courage. I believe it is the courage to say, 'This is enough.'

It is not about being satisfied. It is not about giving up, either. It is a resolve to cherish what you have now and to continue refining it.

Conclusion

I have experienced running a company of 100 people. I learned something from that experience.

A company is not successful just because it is large. Increasing sales does not necessarily mean you will be happy.

What is truly important is whether the people working at the company are happy, whether they are needed by their customers, and whether the company's philosophy is alive.

If I could start my business over again, I don't think I would set a goal of 'building a 100-person company.'

Instead, I would keep asking myself, 'What is the size at which this company can exist most beautifully?'

Every company has its own 'just right' size.

And I believe that discerning that size is one of the greatest roles given to a business leader.

This is a confession from someone who failed to achieve this, and it is far too late now.