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The business of building an MBA program

After earning a Harvard degree, Yoshito Hori gave up the life of a salaryman to start a school for would-be entrepreneurs

by Shinichi Terada

When Yoshito Hori quit Sumitomo Corp. in the early 1990s and started a business school, many of his colleagues thought he was taking too great a risk. As it turned out, he was on the leading edge of the venture boom.

Hori founded Globis Management School in Tokyo in 1992 and then launched the venture capital fund Globis Capital Partners in 1996.

Hori was a Kyoto University graduate and got his MBA from Harvard Business School. Unlike in the United States, becoming an entrepreneur was not common in Japan in the early 1990s, especially for those who had graduated from a prestigious university and had a job at a large company.

All that has changed.

“These days, young people don’t think of starting a new venture as a risk,” Hori, 46, said at his company’s headquarters in Chiyoda Ward, Tokyo. He notes the growing number of young Japanese entrepreneurs in high-tech and other sectors.

In 1992, when he was 30, Hori began offering classes in a small classroom in Shibuya Ward. He and other MBA holders taught marketing and finance to young, career-minded businesspeople.

Some 20 students joined his academy, Globis Management School. Tailored for the Japanese business environment, the program was structured around case studies, which the students analyzed and debated.

The school was popular with those who wanted a brief, less expensive taste of an MBA experience in Japan rather than attending courses in the U.S. or Europe. A business course like this was rare in Japan at the time, Hori said.

The school was accredited as an official graduate school of management in December 2005 and now offers MBAs. It became an educational corporation this April and will open a new campus in Nagoya next year.

The number of students at Hori’s graduate schools increased from 78 in 2006 to 103 in 2007 and 128 in 2008.

Employees from some 250 corporate clients have attended the school’s classes, which are customized according to the clients’ needs. Professionals in the business world, including head-hunting company executives and marketing specialists, teach classes.

“I want to build the school into a top graduate school in Asia in 20 or 30 years,” Hori said.

He thinks producing more entrepreneurs is vital if Japan is going to compete with emerging economies, particularly China and India.

Japan is still the world’s second-biggest economy after the U.S. but becoming less attractive for foreign investors, who are concerned about the slow pace of economic reforms and tend to pursue bigger profits in emerging economies.

Hori said many entrepreneurs in the high-tech and other sectors will help make Japan an attractive investment market.

“Investment chances are just out here,” he said. “Individual competence determines a company’s competence. Investors should invest their money in companies with highly competent individuals who have a strong appetite for learning. I’m not at all pessimistic.”

Hori said his sense of entrepreneurship is rooted in Harvard Business School. “The experience of the MBA course was so powerful that I became more entrepreneurial after that,” he said.

After graduating from Kyoto University in 1986, he joined Sumitomo in Tokyo and was assigned to a division dealing in power plant businesses in Southeast Asia.

Three years later, Sumitomo sent him to Harvard Business School to help him polish his business skills.

He was exposed to lively debates between classmates exchanging views on case studies as if they were chief executive officers.

Hori also had an “aha” moment hearing students talk about their plans to start their own businesses.

He was surprised that many of his classmates did not want to work at big firms after graduating from the business school but instead sought to establish a company.

One day when he was lying on the grass on the Harvard campus, he had a thought: “What if a business school like Harvard Business School existed in Japan? What if classes are offered to businesspeople to learn (about strategies) over a short period of time in places where people commute after work or on weekends? It may help produce competitive businesspeople in Japan.”

Hori began thinking of offering a Harvard-style business course in Japan but was hesitant about starting a venture by himself. His friends and his bosses tried to stop him, arguing it was too risky.

“There were few MBA holders who wanted to start a business at that time in Japan. They leveraged their academic experience and landed a job at foreign consulting firms or foreign investment banks,” he recalled.

“If I’d fail, I’d have lost all of my academic and professional experience that I had built up. I didn’t have much savings. I couldn’t make up my mind.”

But he overcame his fear.

“Nothing is impossible, and it’s important to believe in that possibility until one achieves his or her dream,” he said, adding that making the decision was the hardest in his career.

Hori has learned a lot about business leadership since he established his company.

“Why do people follow business leaders? Why don’t employees listen to me? The (Harvard) curriculum did not have answers to these questions,” he said.

“One of the answers is (to show employees) a corporate mission. The thing is whether a company’s direction is reflected in the company’s vision. A leader should describe where a company aims to go.”

Hori’s mission is to operate U.S.-style business schools to teach risk-taking in business, marketing and finance, provide venture capital to support promising businesses and publish MBA-related books.

A father of five, Hori said he asks his students to think about their missions in their lives.

“Do you know which institution has survived the longest period of time in history?” he asked and paused. “It is the Roman Catholic Church. It has a belief in a very powerful mission statement called the Holy Bible.”

In this occasional series, we interview an entrepreneur whose spirit may hold the key to a more competitive Japan.