Kazuo Inamori (1932–2022), former Chairman of Japan Airlines, and founder of Kyocera and KDDI
The Japanese government asked a 77-year-old retired industrialist, with no experience in airlines, to take the helm: Kazuo Inamori. He had built two Fortune Global 500 companies from nothing: Kyocera Corporation, a global leader in advanced ceramics with revenues exceeding ¥2T ($13B), and KDDI, Japan's second-largest telecommunications carrier with revenues exceeding ¥5.9T ($39B). He was also an ordained Zen Buddhist priest.
Within less than three years, JAL posted a record operating profit of ¥188.4B ($2.35B), making it the most profitable airline in the world, and relisted on the Tokyo Stock Exchange in September 2012 in the second-largest IPO globally that year ($8.5B), after Facebook. The speed and scale of the turnaround remain virtually without precedent.
This piece examines how Inamori's intervention succeeded where conventional restructuring had repeatedly failed, and what his story reveals about the power of placing meaning at the center of how a business is run.
The Business Leader
Kazuo Inamori was born in the 1930s in Japan and studied applied chemistry before taking a research position at Shofu Industries, a ceramics manufacturer in Kyoto. Frustrated with the company's rigid hierarchy and indifference to his research's commercial potential, he and seven colleagues left to start their own company.
In 1959, with ¥3M (roughly $8,000 at the prevailing exchange rate) in capital from acquaintances, Inamori founded Kyoto Ceramic Co., Ltd., later renamed Kyocera Corporation. The company manufactured precision ceramic insulator components used inside television picture tubes, and as color television proliferated across Japan in the 1960s, demand surged. Kyocera expanded into semiconductors, solar cells, and electronics, growing into a multinational with over 77,000 employees and annual revenues exceeding $13B. It has never recorded an annual loss.
In 1984, when Japan deregulated its telecommunications industry, Inamori founded DDI Corporation to challenge NTT, the state telecoms monopoly. DDI merged with two other carriers in 2000 to form KDDI, which became Japan's second-largest telecom operator.
Inamori developed a distinctive management philosophy that became inseparable from his commercial success. Kyocera's official Management Rationale, the foundational document governing the company's operations, states its purpose as follows: "To provide opportunities for the material and intellectual growth of all our employees, and through our joint efforts, contribute to the advancement of society and humankind." This was not a corporate slogan added after success. Inamori formulated it in the company's early years, when Kyocera had fewer than 100 employees. From this philosophy emerged the Amoeba Management System, which Inamori began developing in the mid-1960s as Kyocera outgrew his ability to oversee every operation personally. The system divides an entire organization into the smallest possible autonomous units, each functioning as an independent profit-and-loss center. Each "amoeba" sets monthly revenue and cost targets, tracks performance daily using a metric called "Hourly Efficiency" (added value divided by total labor hours), and transacts with other amoebas at internally negotiated prices pegged to external market rates. The principle is that if every unit understands its own economics and has the autonomy to act on that understanding, the whole organization becomes self-correcting.
In 1997, Inamori was ordained as a Zen Buddhist priest. He also founded Seiwajyuku, a private management academy where, from 1983 until its closure in 2019, he personally taught his philosophy to some 15,000 business owners across 104 locations worldwide.
The Company
Japan Airlines was founded in 1951 as a government initiative to rebuild Japan's air transport system after the Second World War. It became the state-owned national carrier in 1953 and was privatized in 1987. At its peak, JAL operated Japan's flagship international routes and carried over 52 million passengers annually.
By the 2000s, however, the airline had accumulated structural weaknesses: an oversized fleet of fuel-inefficient Boeing 747s that the airline continued operating even as competitors shifted to smaller aircraft, politically mandated unprofitable regional routes, aggressive hiring during the 1970s boom that burdened it with expensive senior staff, a powerful pilots' union that resisted restructuring, and reckless diversification into hotels, golf courses, and real estate that collapsed when Japan's asset bubble burst in the late 1980s. The 2008 global financial crisis, triggered by the collapse of Lehman Brothers, caused international air travel demand to fall sharply and pushed the airline past the point of no return. By the end of 2009, JAL carried negative net assets exceeding ¥800B ($9B).
The government directed the Enterprise Turnaround Initiative Corporation of Japan (ETIC), a state-backed restructuring body, to manage the process formally. ETIC imposed severe preconditions: elimination of one-third of the workforce, salary cuts of up to 30%, retirement of inefficient aircraft, withdrawal from underperforming routes, debt forgiveness of ¥521.5B ($6B) from creditors, and a ¥350B ($4B) capital injection from public funds. Existing shareholders saw their equity reduced to zero, meaning anyone who held JAL stock before the bankruptcy lost their entire investment.
The Decision
ETIC's leadership, particularly its former chairman Hideo Seto, understood that balance sheet repair alone would not save JAL. The airline's problems were embedded in a corporate culture that had operated for decades as a semi-governmental bureaucracy, where accountability was diffuse and cost consciousness was non-existent. The government needed someone who could change not just the numbers, but the people behind them.
Seto and the government turned to Inamori because of his reputation for cultural transformation. He had spent decades demonstrating, across two entirely different industries, that his philosophy-led management approach could produce extraordinary financial results. Inamori resisted multiple requests. He was 77, retired, a Buddhist priest with no airline experience, and those around him advised strongly against it. In February 2010, he eventually agreed, motivated by three considerations he later explained publicly: preventing the economic damage a second JAL bankruptcy would inflict on Japan, protecting the livelihoods of the remaining employees, and preserving competitive balance in Japanese aviation so that consumers would not be left with a single dominant carrier. He accepted the chairmanship on the condition that he would receive no salary and bring no team from Kyocera. The zero-salary condition was a calculated signal to a workforce that had just lost a third of its colleagues. Inamori wanted every remaining employee to understand that he had no financial interest in the outcome, only a sense of responsibility.
The Intervention
His first priority was to establish a shared philosophical foundation. He adapted the Kyocera Philosophy into what became the JAL Philosophy, a set of principles governing employee conduct centered on the primacy of employee wellbeing and the moral obligation to serve customers and society. Senior executives were gathered in what Inamori termed a "dojo," a training hall, and subjected to intensive seminars modeled on his decades of teaching at Seiwajyuku. The response was initially skeptical. One executive publicly argued with Inamori about whether an airline's purpose was to turn a profit or merely provide a public service. Others could not believe that a man of his wealth and age would devote time to such granular, almost pastoral work. Yet the granularity was the point. Inamori spent time on hangar floors and behind ticket counters, repeating his message directly to frontline staff.
Simultaneously, he transplanted the Amoeba Management System into the airline. JAL's bureaucracy was disaggregated into small, self-governing units, each responsible for its own revenues and costs. The core principle was that every individual must think and act as if they were the owner of their own small business: every employee is a manager, every department is a business, every decision has a visible financial consequence. For the first time in JAL's history, profitability data for individual routes and individual flights became available the following day. Inamori scrutinized departmental figures personally every month. If a unit showed no improvement, he demanded to know why.
The effect was transformative. Under the old regime, no executive had material interest in management figures. Aircraft deployment decisions were made centrally, often resulting in 200-seat planes flying routes with 20 passengers. Under the Amoeba system, unit leaders could scale down to smaller planes with a single phone call, because they now understood the cost of every empty seat and had the authority to act. Hierarchy was dismantled. Monthly meetings required each unit to present its figures and explain variances. There was no more hiding poor performance within a rigid reporting chain.
This combination of moral philosophy and forensic financial accountability was the essence of Inamori's method.
The Outcome
The measurable results were extraordinary. JAL's operating performance swung from a loss of ¥133.7B ($1.5B) in fiscal year 2009 to a record operating profit of ¥188.4B ($2.35B) in fiscal year 2011, a turnaround exceeding ¥320B ($4B) in two years. Net profit reached ¥187B ($2.3B), more than 6x that of rival All Nippon Airways (ANA) at ¥28B ($350M). ETIC's original recovery plan had targeted ¥60B ($750M) in operating profit. JAL delivered more than three times that figure. On 19 September 2012, two years and eight months after filing for bankruptcy, JAL relisted on the Tokyo Stock Exchange. The ¥663B ($8.5B) offering was the second-largest IPO globally that year, behind only Facebook. ETIC, which had held approximately 96% of JAL's equity, divested its entire stake, fully recouping the ¥350B ($4B) in public funds it had invested.
JAL's recovered profitability was not produced solely by Inamori's cultural transformation. The bankruptcy process itself had given the airline structural advantages that its competitors did not enjoy. Creditors had forgiven over ¥500B ($6B) in debt, reducing interest costs. The write-down of assets during restructuring lowered depreciation charges as the fleet was renewed. And accumulated losses from the bankruptcy period generated substantial tax credits that sheltered profits for years. The Liberal Democratic Party publicly opposed the relisting, and rival ANA argued that JAL had gained an unfair competitive advantage through its government bailout. These criticisms were not trivial. They reflected a real tension in the JAL story: the financial restructuring created conditions that would have improved any airline's reported earnings, regardless of who was running it.
But what the financial restructuring could not explain was the scale of the outperformance. ETIC's own recovery plan, which already assumed the benefits of debt forgiveness and asset write-downs, had projected ¥60B ($750M) in operating profit. JAL delivered ¥188B ($2.35B). The gap between what the restructuring alone should have produced and what JAL actually achieved is the measure of what Inamori's intervention added.
Inamori stepped down as chairman in February 2012.
Reflections for Business Leaders
JAL before Inamori was an organization that possessed the information it needed to save itself but could not act on it. Route-level cost data existed. Operational inefficiencies were visible to anyone who looked. The problem was not a lack of information but the absence of any mechanism to connect that information to individual behavior. In their 1990 paper in Administrative Science Quarterly, organizational theorists Wesley Cohen and Daniel Levinthal called this condition a failure of "absorptive capacity": the inability of an institution to recognize the value of information it already holds and apply it to commercial ends. Their research focused on R&D-intensive firms, but the mechanism is the same. An organization that has spent decades insulated from market consequences loses the internal wiring needed to process signals that would be obvious to an outsider. The data does not disappear. The organization simply stops being able to hear it. Inamori restored that capacity through two simultaneous mechanisms. The first was philosophical: by redefining the company's purpose around employee wellbeing and societal service through the JAL Philosophy, he gave individuals a reason to care about outcomes they had previously ignored. A pilot or gate agent who sees themselves as serving a meaningful mission engages differently from one who sees themselves as a cog in a bureaucracy. The second mechanism was structural: the Amoeba Management System made the financial consequences of every decision visible, immediate, and personal at the unit level. Each mechanism depended on the other. A workforce that believes in the mission but cannot see its economic impact will produce enthusiasm without results. A workforce that sees the numbers but has no reason to care about them beyond compliance will optimize locally and game the system.
For us at Glenshore, the JAL case illustrates a pattern visible across industries and geographies: when a business is treated as a collection of financial metrics to be optimized, the human system that actually generates performance is ignored until it collapses. Inamori reversed this. He treated JAL as a community of individuals who needed both a reason to care and a mechanism to act. The results were not a happy accident of idealism. They were the measurable consequence of a management model that most boardrooms would have dismissed before it had a chance to prove itself.
The broader lesson extends well beyond distressed situations. Any business leader building an organization intended to outlast their own involvement faces the same question Inamori answered at JAL: how do you create a system where performance is generated by the people inside it, not imposed on them from above? Inamori's answer was to pair radical financial transparency with a shared sense of purpose. Every unit sees its own numbers, every day. Every employee understands that the work exists to serve people, not to extract value from them. This system was adopted by over 400 companies worldwide through Inamori's Seiwajyuku academy and the publication of his management methods, which have been studied by Harvard Business Review and implemented across manufacturing, healthcare, and services sectors from China to the United States.
Kazuo Inamori died in 2022 in Kyoto, at the age of 90. He remains the only individual in history to have founded two separate Fortune Global 500 companies from scratch, and to have achieved a corporate turnaround of this speed and scale. The essential question his life's work poses to every business leader is deceptively simple: do your people know, every day, what their work costs and what it earns, and do they have a reason to care?
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Amine Laouedj Managing Director, Glenshore
I advise responsible business leaders who wish to ensure their company ends up in the right hands and continues to flourish after their exit. If these perspectives resonate with your thoughts, I welcome a conversation. Please connect or message me on LinkedIn.
Glenshore is a boutique investment bank with the Succession M&A Playbook, a disciplined approach to align financial outcomes with long-term mission and legacy preservation. Learn more at glenshore.com.
Disclaimer: The analysis contained herein reflects publicly available information as of February 2026. All data points are sourced from official Kyocera and JAL corporate disclosures, ETIC restructuring records, Tokyo Stock Exchange filings, and referenced third-party research including Cohen and Levinthal (1990). No proprietary or non-public information has been used.