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Asked which business figure he most admires, Ken Sato names Howard Hughes. The reclusive US movie mogul and aircraft pioneer devoted his life "to developing cutting-edge technology that he believed in", says Mr Sato. It is a faintly bizarre choice -- but one in keeping with the unusual personality of the founder and chief executive of Rohm, one of Japan's leading electronics components groups.
Like Mr Hughes, Mr Sato cultivates a mysterious image, only occasionally inviting outsiders to Rohm or even travelling very far from Kyoto, where he set up the company in 1954 and where the 20,000-strong group has its headquarters.
"I don't like meeting people," says Mr Sato, making an exception for the FT in a prolonged discussion in his favourite restaurant in Kyoto.
While Mr Sato is quite voluble over a meal, and certainly could not be called shy, he often sits in a six-hour meeting at Rohm and says nothing. "I listen to what people have to say and then give a strong message [to employees] perhaps once a quarter. If you talk a lot, it may not have much impact, because people won't necessarily listen."
Mr Sato's quiet manner has not stopped Rohm forging a global reputation as a specialist across a range of electronics disciplines. Last year it had sales of Y369bn ($3.27bn), just over half of which was outside Japan. The company -- valued at about $11bn -- has 100,000 types of product, ranging from relatively simple capacitors and resistors to sophisticated semiconductors. Virtually all are invisible to most people but are buried inside familiar objects such as mobile phones, hi-fi equipment and computers.
"Rohm has kept out of the most sexy areas of electronics products, taking technologies largely devised by others and adapting them to meet the needs of high-growth markets," says Jim Feldhan, president of Semico, a US microchip consultancy.
Rohm's technological focus -- and Mr Sato's reticence -- means he adopts what some might call a cavalier approach to customers. Mr Sato says he would never travel to visit a customer, though he occasionally grants audiences at his headquarters to senior people from large groups such as Sony, Matsushita or Nokia. He last went to Osaka -- 30 minutes by train from Kyoto and the centre of Japan's manufacturing and electronics industry -- five years ago. He made his only visit to Europe in the 1970s.
Due to his reserved manner, Mr Sato is barely known inside his own company. In the past year, he estimates he has had a face-to-face conversation with 30 or 40 Rohm employees, out of the 6,000 employed in Japan.
Mr Sato's low-key approach is possibly linked to his interest in classical music. The son of a violinist he thought about trying to make a career as a concert pianist before giving this up at the age of 19, starting Rohm soon afterwards.
Mr Sato established the Rohm Music Foundation in 1991 with an endowment that is now worth $800m. It is now an important music charity, funding concerts and the studies of gifted young musicians. An adviser to the foundation is Seiji Ozawa, a leading Japanese conductor who is music director at the Vienna State Opera. Mr Ozawa says he "greatly values" what Mr Sato has done for music education in Japan.
For his part, Mr Sato can see the connection between him and Mr Ozawa, one of his close friends. "A conductor does not have to talk to get his point across," says the Rohm boss. "If you watch him [Ozawa] in action, he does not go for a flashy performance, but he's very persuasive."
It is a style Mr Sato practises at work. During a normal day he might talk to eight to 10 close advisers. The rest of the time he reads reports, particularly from Rohm's engineers, whom he regards as key employees. "I would then phone the ones who have written the most interesting papers. I'd ask them questions to get more of their ideas." Often these ideas -- many of which may be based on the innovations of rival companies -- could form the basis of a new product.
Through such processes, Rohm is exploring new kinds of semiconductor memory, novel laser systems for optical electronics and also the emerging field of biosensors -- a combination of biological and electronic materials that could have a big impact in medical diagnostics.
The company also makes some of its own semiconductor wafers, the building blocks for integrated circuits, to ensure it has an edge on rivals, which rely on their wafers from vendors such as Shin-Etsu of Japan or Wacker of Germany.
This thirst for new ideas, says Ippei Takeda, chief executive of Nichicon, another Kyoto electronics company, and a confidante to Mr Sato, is one of the factors that distinguishes the Rohm boss from many of his peers. "He wants to keep innovating and seeking new things," says Mr Takeda.
Another important factor at Rohm is attention to detail. Mr Sato again draws on a musical analogy. "A pianist might play some wonderful notes -- but to achieve greatness he has to keep the audience happy all the way through the performance. In business, it's important to maintain the satisfaction of customers, in areas such as technology, cost and. quality."
All this is expensive. The company spends 9.0 per cent of its sales on research and development and, in a normal year, another 15 per cent on capital investment. Trevor Yancey, an analyst at IC Insights, a US research group, says he cannot think of another company that is so technically advanced across such a range of electronics specialisms.
Added to this, Rohm is keen on self-sufficiency. "When we install [research or production] equipment, we normally choose machines we make ourselves," says Mr Sato. "Sometimes if you buy from others, you have a hard job making the machines work because the manufacturer has made mistakes. Often it's better to do the job yourself."
Mr Sato says his patient approach to business is better in the long run than the helter-skelter style of some industrial heavyweights. He talks disapprovingly of Sony, the iconic Japanese electronics group that has shifted its focus in recent years from consumer equipment to Hollywood films and computer games -- and suffered a wave of financial and management setbacks. "They gave up on hardware -- the area where they made their reputation -- in the effort to make a sweeping transition into electronics 'content' and software," says Mr Sato. "I think now they realise they made a mistake."
Characteristically, Mr Sato refuses to give his age but is thought to be in his early 70s. Despite this, he says he is not thinking of standing down. For the next few years at least he does not envisage a change in Rohm's strategic approach,
"The style at Rohm is that of a farmer, laying the foundation for new products and harvesting what emerges, rather than a hunter who pursues dramatic initiatives."
Under syndication arrangement
with FE
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