Seventh-generation thinking? How about 40th-generation thinking!?!

“The world’s oldest continuously operating family business ended its impressive run last year,” the article began. I just ran into the article yesterday on a news feed, but when I looked at the details, I discovered it was first published on April 16, 2007 and in areferred to an event that had occurred more than a year before that.

But the date of the article is probably not too important. The company that went bankrupt was over 1400 years old, having been started in 578 A.D. The president at time of bankruptcy was a member of the 40th generation to run the company.

I’ve been talking about James Hughes’ emphasis on seventh generation thinking. How about 40th generation thinking?

And the secret for the company’s long-term success? According to a 2004 article in TIMEasia, it had to do with the company’s commitment to “[d]eliver lasting products and stand by them.” Masakazu Kongo said that at Shitennoji, a Japanese Buddhist temple complex built by the firm in A.D. 593, “someone from our company is there every day. Unlike other construction companies, we handle the maintenance of our buildings. Our wooden structures are built to last a thousand years, and we are responsible until the end.”

One of the carpenters for Shitennoji, Shigemitsu Kongo, traveled to Japan from the Korean kingdom of Paekche for the project. Over a millennium-and-a-half, Shitennoji has been toppled by typhoons and burned to the ground by lightning and civil war—and Shigemitsu’s descendants have supervised its seven reconstructions.

Beyond that, however, survival depended on

being flexible, even when that meant contravening ancient customs.

“Most families automatically choose the eldest son to continue their business,” says Masakazu. “Our family always chose the son who was healthy, suited for the job and with the largest sense of responsibility.”

When the 37th Kongo to lead the corporation committed suicide, Masakazu’s grandmother Yoshie put on the company hard hat. The first woman to run the business, she oversaw the reconstruction of Shitennoji’s five-story pagoda after it was hit by a typhoon in 1934.

“If anyone is a superhero in our family, it’s her,” says Masakazu.

What finally did the company in? According to the BusinessWeek article that first caught my attention,

Two factors were primarily responsible. First, during the 1980s bubble economy in Japan, the company borrowed heavily to invest in real estate. After the bubble burst in the 1992-93 recession, the assets secured by Kongo Gumi’s debt shrank in value. Second, [as a result of] social changes in Japan . . . demand for Kongo Gumi’s . . . services dropped sharply beginning in 1998.

By 2004, revenues were down 35%. [President] Masakazu Kongo laid off employees and tightened budgets. But [by late 2005], . . . [t]he company’s borrowings had ballooned to $343 million and it was no longer possible to service the debt. In January [2006], the company’s assets were acquired by Takamatsu, a large Japanese construction company, and it was absorbed into a subsidiary.

You can find out more about this remarkable business and its demise at BusinessWeek, Chosun, and TIMEasia.

And for further research: how about a list of the world’s oldest companies? What lessons might we learn from them?

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