Takashi Nawa has spent decades at the top tier of management consulting as a director at Mckinsey and a senior advisor at BCG. His work with leading organisations across the US and Japan has made him passionate about purposeful business, and he now spends his time teaching on the topic at Hitotsubashi ICS, as well as serving on boards a number of global companies such as Fast Retailing (Uniqlo), Ajinomoto, and SOMPO Holdings. His latest book, Purposism, explores how purpose-centred organisations can thrive for generations to come.

We spoke to him about what purpose means to him, what Western and Japanese businesses can learn from each other, and what he hopes the future of business looks like. 

When did you first become interested in purpose? 

When I was a high school student I read a book called Silent Spring by Rachel Carson, and even back then she was advocating for us to be more thoughtful about the global environment. It started there.

I later met Michael Porter, who was my professor at Harvard Business School. Together we started to have a C-suite forum related to purpose-driven management. So purpose is something that’s been on my radar for a long time, but especially so in the last ten years. 

Is there a difference between the Western and Japanese approaches to purpose? 

One big difference I’ve noticed is that the Western way of thinking is causal, and means choosing one thing over another. But the Japanese way of thinking is less deterministic. Rather than choosing between A and B, we’re more inclined to accommodate different possibilities and make the most out of them. We ask, “how can we optimise these different factors together?”

I’ve also found that British and American companies are more profit-driven, whereas companies from the European continent have some similarities to the Japanese way of thinking – which is more concerned with the long term. Scandinavians particularly seem to be on a similar wavelength.

Do you think it’s harder for a public company to pursue purpose and community-driven business models as opposed to a private company? 

It can make things more complicated. But there are companies who are creating a hybrid, where they can generate returns for the shareholders while retaining a long term view of their impact. 

Take Novo Nordisk, for example. 25% of their shares are public, but 75% are owned by their foundation – so they are semi-public and semi-private. They have a long-term way of thinking about diabetic patients. For them, the horizon is a long way away, so they are very focused on sustainability. 

What can Japan and the West learn from each other? 

Japanese companies are becoming increasingly anglicised. Profit is definitely something that we must strive for as private companies, but for Japanese businesses, it never used to be as strong as it was in the Western world. However, that’s now changing. 

And I don’t think it’s a bad thing; in fact, in the right circumstances, it is a helpful principle. A healthy amount of pressure encourages companies to be profitable so that they can reinvest their profits and have a greater impact on society. That kind of momentum can be a win-win scenario for shareholders and society.

What role do you think governments need to play in terms of taxing corporations? 

I admire Scandinavian countries like Sweden who have a high tax, but are still able to retain an element of dynamism and flexibility that allows good companies to become bigger. The revolving economy allows people to explore new opportunities by being reskilled, often through the educational system. It’s a really healthy way of thinking. 

A social democratic system is something we should admire. And that’s what I am interested in researching these days: how can we learn from Scandinavian countries? For example, Novo Nordisk is enjoying more than 70% ROE, which is amazing. Japanese companies are usually at the 8% or 10% mark. So they are filling the role of a big economic giant, but they are also doing it in a purpose-driven way. And it is the government legislation and tax regulations that are facilitating that in many ways.

You use the term ‘purposism’. Can you talk to us a little more about what you mean by that?

In Japan and in China, we have three assets as a company: capital, goods and human resources. Capitalism is based on money, but it’s not the central resource. Money is abundant. The thing that is scarce is human capital. 

There are two sides of human nature. We can be greedy, and it’s an important dimension of capitalism that we can’t ignore. But we can also be kind and good-willed. 

Greed has arguably formed the basis of the desire-driven capitalism that has been dominant in the 20th century, but in the 21st century we’re seeing a shift to a more purpose-driven and kinder form of capitalism; an economy driven by purpose rather than greed. 

How can we measure purpose?

How to capture purpose and measure it is a big question. I believe that if we’re able to measure and report how valuable purpose is, we can motivate people by demonstrating that the work they are doing has a positive impact on society. 

And then their productivity and creativity will become higher than those who are purely working for money. So that’s essentially what we’re trying to gauge – how people are motivated. 

I also try to look at the brand equity of the company, inside and outside, in order to then create a quantitative valuation. And then we look at how employee engagement and brand equity are connected to the future profit of the company. 

Brand equity is very fragile. I’m a senior advisor to Interbrand, and they are developing exciting new tools to gauge brand equity and employee engagement. I’m currently working with them to help bring these new ways of measuring value into the real world. 

I believe there is a connection between the people inside the company, the market itself and the value of the company. It’s that circle that I’m trying to measure.

How long do you think it will be before it’s the norm to start measuring intangibles for organisations?

I think it will still take a decade to have a consensus. There are many different ways of gauging this, and so many people are researching the connection between non-financial indicators and future value. There are still lots of interesting ideas, concepts and research, which is fantastic.

How does our mindset impact how purposeful we are as individuals and organisations? 

Psychological safety is a really important foundation to have. A cultural change is often what is needed to foster a psychologically safe environment, and many companies are now undergoing that change of management. 

I think upbringing and mindset are also important factors in determining the psychological dimension – whether someone’s default mindset is positive or negative, and what they truly value in their lives. 

When I’m teaching and I speak to the younger generation, they aren’t so concerned about money. They’re more motivated by contributing to society in a meaningful way. That thinking is quite different from when I was a student 40 years ago, so mindset has definitely impacted how we collectively think about purpose.