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At Misumi Corp., the president makes no beginning-of-the-year speeches. There are no long-term sales goals, praise or scoldings.

Misumi’s outgoing chairman and CEO, Hiroshi Taguchi calls it “management of emptiness.”

It sounds more like Buddhist scripture than business management, but in Taguchi’s 33 years at the helm the Tokyo-based precision machinery parts distributor grew from a venture set up by Taguchi’s high school friend to one of the few consistently profitable companies on the Tokyo Stock Exchange.

Taguchi, 65, gives credit for the midsize firm’s success to his employees, whom he calls “in-house entrepreneurs.”

“I don’t make the decisions,” Taguchi said. “I just say, ‘Come over and make money!’ The company is a stage; I am the stagehand.”

At Misumi, staff plan and start their own projects. If a project makes money, the head of its team can collect a hefty 13.3 percent of the profits in a bonus. In the business year ended March 31, some employees had earned 110 million yen in a year.

“In Japan, the company usually decides everything — which department you work in, how much you earn, what you study,” Taguchi said. “That’s how they turned individuals into salaried workers.”

However, Taguchi’s record is not unblemished. The company’s overseas operations did not do as well as hoped, and Taguchi acknowledged that his style encouraged staffers to set their sights on niche projects in the domestic market.

For the first time since the company went public in 1998, consolidated net profits are down, by 28.4 percent to 2.5 billion yen. Sales are down 7.9 percent and dividends are likewise depressed.

On June 24, Taguchi will take the ultimate step in his quest for emptiness — handing over the reins to Executive Vice President Takeshi Saegusa, a former consultant at U.S.-based Boston Consulting Group.

He hopes Saegusa, a total stranger to the company until a year ago, will be the strategist who gives Misumi the stamina and finesse necessary to weather global competition.

“At my age, you just can’t make the kind of changes the company needs,” he said. “This is not my company, it’s the market’s company, and we have to choose the person the market wants.”

While it is no longer scandalous for company presidents to hand over the reins to relative outsiders, critics slam Taguchi’s inability to nurture a successor from within the firm — the result of an exodus of top executives caused by increasingly eccentric management since the company went public.

But Taguchi maintains that in times of drastic change, company leadership needs new blood.

“If you appoint someone who rose in the ranks and learned everything at your company, chances are you’ll wind up with a miniature version of yourself. Companies can’t change without new DNA.”

He did, however, also admit that Misumi’s unique style often failed to produce the professional managers — strong in logic and loaded with experience — that the company needs.

Which brings Taguchi to his next project — nurturing entrepreneurs and business managers who can better meet the demands of the times.

Taguchi, who will become an adviser to the firm after relinquishing his post, says that he would be happy just to see Misumi grow into a company that can produce such business leaders. But there are always other options:

“I always thought I would have made a good university professor.”

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