Chapter 16 - Dream Small, Win Big: Life Lessons from Japan’s Preeminent Business Philosopher
Today's Chapter is based on the book “Dream Small, Win Big: Life Lessons from Japan's Preeminent Business Philosopher” by Kazuo Inamori, the founder of Kyocera.
Buy it on Amazon here:
https://www.amazon.com/Lessons-Japans-Preeminent-Business-Philosopher-ebook/dp/B09W57SGGW
Here's what I have learned from the book:
Failure builds Character
“A good person dyes events with his own color and turns whatever happens to his own benefit.”
— Seneca
Kazuo Inamori, the founder of Kyocera, is well known as a business philosopher. Inamori faced various obstacles and failures throughout his youth before reaching success with the creation of Kyocera. As a matter of fact, in his book “Dream Small, Win Big”, he explains how he failed to enter Junior High School twice and was unable to obtain his dream job upon graduating from University. Despite these challenges, Inamori was able to succeed by changing his perspective on how he faced difficulties in life:
“The important thing is to think of all the various things that happen in life, whether fortunate or disastrous, as divine trials. When a trial comes in the form of good fortune, it should be accepted with a "thank you" rooted in deep, sincere gratitude, and a commitment to continuing to stay humble while persisting in one's efforts. When the trial comes in the form of disaster, it should be met without grief, resentment, depression, envy, or complaint, and with a single-minded and cheerful commitment to moving forward.”
— Kazuo Inamori
As a matter of fact, he was able to achieve his dreams and succeed in life by facing his misfortunes with a positive attitude. He thought these trials in life were meant for him to improve his character as a human being. Inamori mentions that it is by overcoming difficulties that one’s abilities can be expanded limitlessly. As famously said by Wendell Philips, “What is defeat? Nothing but education, nothing but the first steps to something better.”
“Life is not comprised solely of setbacks. Good things and bad things come in alternation. Therefore, to young people who will one day take their place as leaders of society I say: don't be disheartened in times of pain. The efforts you make when you're suffering will certainly bear fruit; they will enrich your life and enhance your own humanity.”
— Kazuo Inamori
“People do have destinies. But that doesn't mean their destinies can't be changed. As this story shows, one can change one's destiny for the better by thinking good thoughts and doing good deeds.”
— Kazuo Inamori
More importantly, Inamori believes that the biggest mistake when facing failures is to give up. In fact, he believes that the key difference between those who succeed and those who don’t is that unsuccessful people will compromise or give up when things gets though. For him, it is only okay to give up when you can honestly say that you have done all you could in regards to the factors you can control. This is eerily similar to the stoics’ dichotomy of control, which provides us with a framework to solve problems by separating things we can control and things we cannot.
“There may be times when your efforts at study or work do not go well. If you can honestly say you did all you could to succeed, you can legitimately let yourself give up. But if your failure was the result of a half-hearted attempt, I believe you will find yourself regretful and depressed, thinking that you should have done more. There's nothing more pointless than a life filled with such regret.”
— Kazuo Inamori
“In life our first job is this, to divide and distinguish things into two categories: externals I cannot control, but the choices I make with regard to them I do control. Where will I find good and bad? In me, in my choices.”
— Epictetus
As such, Kazuo Inamori’s story is a perfect example of what Steve Jobs once said:“Character is built not in good times, but in bad times; not in a time of plenty, but in a time of adversity”.
Persistence Pays Off
“Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day - if you live long enough - most people get what they deserve.”
— Charlie Munger
Kazuo Inamori believes that the most important thing is to have a clear objective and to work persistently and steadily toward its realization. As a matter of fact, Inamori states that he was able to create a company as large and successful as Kyocera through working untiringly and by making steady progress by putting in more constant effort than anyone else.
“There's a wonderful saying: "Persistence pays off". The most important thing in life is persistence, which means a continuous devotion to a single activity. To young people who are about to enter the work force and build their lives, I want to convey this: make continuous efforts, one step at a time. That is, think of the job you've been given as your true vocation, and continue working at it your entire life. I believe that this, more than anything, is necessary in order to lead a fulfilling life.”
— Kazuo Inamori
“But there's one thing I want them to understand: great achievements are born from steady effort on a road traveled one step at a time. Without that, big dreams, no matter how vividly imagined, remain nothing more than dreams.”
— Kazuo Inamori
As we have learned through Edward Thorp previously, the power of compounding is the main reason why steady improvement day by day can lead to success. A one percent improvement every day leads to 37x improvement in a year. Thorp once said that “Over a sufficiently long time, compound growth at a small rate will vastly exceed any rate of arithmetic growth, no matter how large!”
In Inamori’s view, one who improves steadily will be rewarded for his or her efforts. It may take a long time, but you’ll eventually find a person who will appreciate and who will reward you if you persist long enough. All people who are recognized as masters in their field surely attained this status through diligence and steady efforts.
"I think many young people feel it's very hard to achieve success even when they grapple with problems before them and put in their best effort. To them I say, try taking your efforts to the point where you truly can do no more. If you work that hard, God will surely give you a wonderful hint to guide your way. You are bound to encounter a person who appreciates your efforts and gives you help.”
— Kazuo Inamori
“When we set a goal and work toward its attainment, as human beings we question ourselves, wondering what we should do and whether we're correct. Sometimes, no answer is evident and we find ourselves at a loss. If we remain steadfast in our efforts and do what we can without retreating when that happens, something will surely come along to put wind in our sails.”
— Kazuo Inamori
However, Inamori explains that working hard is meaningless if one does not that have an objective. As Kenichi Omae once said, “Rowing harder doesn’t help if the boat is headed in the wrong direction.”
“Also, it's meaningless to do something persistently if it's done in a vague or aimless manner. The important thing is to consistently apply creativity and ingenuity. You must commit yourself to making today better than yesterday, and tomorrow better than today. The unceasing application of creativity and ingenuity is bound to produce excellent results.”
— Kazuo Inamori
This idea reminds me of the importance of understanding the concept of activation energy. In chemistry, activation energy is the energy required that must be created to a chemical system in order for it to initiate a change or a reaction. In fact, producing real change and achieving success takes a bigger initial investment than most people think. This leads to people to feel discouraged when they fail to produce the results they want. Finally, this explains why it is important to remember that real changes takes time and effort and that we cannot judge success solely through results. As Confucius famously said, “the man who moves a mountain begins by carrying away small stones.”
“The bigger and more challenging an action is, the more activation energy required. And it’s important to remember that the buildup to doing something is part of the activation energy required — this build up includes everything on the camel, not just the straw.”
— Farnam Street
Activation energy is also a reminder that while our efforts may be consistent and steady, results are never linear.There are often dips and plateaus along the way, and it's important to not let these setbacks discourage us from working towards our goals. Similarly in investing, stock performance is rarely linear; it can take years before you see the fruits of your investment.
“Stock performance is rarely linear up and to the right in microcap. A 25% CAGR over three years is more often a stock you hold that goes nowhere for 2.5 years and then goes up 100% in 6-months.”
— Ian Cassel
Attitude
“Attitude is a little thing that makes a big difference.”
— Winston Churchill
For Inamori, the result of life is based on three things: Ability, Effort and Attitude. As a matter of fact, he believes that life rewards those who maintain the right attitude and works hard. He firmly believes in the following formula:
The Result of Life = Ability x Effort x Attitude
Furthermore, he mentions that ability is the less important out of these three factors. As a matter of fact, a person with somewhat inferior ability who works hard and wants to do something for people will achieve much better results than a person with excellent ability who doesn't try and has a wrong approach as a human being.
“Even without exceptional ability, a person motivated by passion cannot lose. But there's something that's even more important, and that is one's state of mind. If you maintain an attitude of rectitude and strive diligently to achieve your goals, you will realize your dreams without fail. In other words, your life will follow the dictates of your mind. This is how I've lived my life to the present day.”
— Kazuo Inamori
“Don't be discouraged if your ability is a little less than top grade. A single-minded devotion to work and a correct way of thinking will surely carry you far”
— Kazuo Inamori
It is for this reason that he often states that people can change their destiny through their thoughts and efforts. Even when one experience mishaps and failures, he or she can change the direction of their life by changing their attitude and by working hard towards their goals. This philosophy has been the driving force behind Inamori’s own success, and he encourages others to adopt it too, in order to realize their full potential and lead a fulfilling life.
However, more important than effort, Inamori believes that the key to life is to have a good attitude. In fact, while effort x ability leads to results, it is attitude that will determine if the results are positive or negative. For him, having a good attitude means leading a life with good ethics, meaning to always act properly as a human being.
“A person with excellent ability and passion for work will only end up with an extremely negative result if he goes through life being sulky, resentful, and dishonest. On the other hand, if a person maintains a great attitude and looks forward to the future with a cheerful heart, he can achieve excellent results in life even without much innate ability.”
— Kazuo Inamori
“The word "ethics" tends to conjure up images of strict formality, but for me, it really means always acting properly as a human being. It means obvious things, like being truthful and honest, not imposing on others, and being kind. These are universal virtues recognized everywhere in the world. Precisely because these are basic to being human, they constitute the standard by which many of us distinguish good from evil. I also believe that, because they are simple and natural expressions of virtue, they embody a tolerance that keeps them relevant in the 21st century.”
— Kazuo Inamori
This reminds me of the importance Warren Buffett puts into one’s integrity. As a matter of fact, he emphasizes that integrity should be valued above other qualities like intelligence and energy. This is perhaps because one’s values should not be something that can be compromised easily as to preserve one’s reputation.
“We look for three things when we hire people. We look for intelligence, we look for initiative or energy, and we look for integrity. And if they don’t have the latter, the first two will kill you, because if you’re going to get someone without integrity, you want them lazy and dumb.”
— Warren Buffett
“It takes twenty years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” — Warren Buffett
Beyond the Book
Read “Control and Choice” by the Daily Stoic
Read “Stoicism - Epictetus' The Dichotomy Of Control” by Orion Philosophy
Read “Activation Energy: Why Getting Started Is the Hardest Part” by Farnam Street