When her mother asked for her advice about what to do with the family company, Kumi Sato was busy running her own firm in the United States. A few years earlier, after a stint at McKinsey & Company in New York, Sato began a consultancy to help Japanese firms enter the American market. But her father passed away and the family company, Cosmo Public Relations Corporation, was being run by outside management. Perhaps it would be better to just sell it?
Sato took a long, hard look at the firm her parents had founded in 1960. Its primary output was award-winning coffee table books and corporate materials for the likes of Hitachi and Mazda. It was, in Sato’s words, “a typical Japanese company” that produced things – not services or ideas. She came to the conclusion that it would be advantageous to continue the editorial work, but take the company in a new direction by focusing on helping foreign firms find their footing in Japan. The year was 1987 and foreign direct investment was at an all-time high.
“The management didn’t like to hear it,” says Sato. “They said ‘if you have such great ideas why don’t you run the company.’”
So she decided to do just that.
Sato bought Cosmo and headed back to Tokyo – where she’d grown up – asking her American husband Donald Kanak to make the move with her. After a year working in business development, she assumed the role of President at Cosmo PR.
Kumi Sato was 27 years old.
Ahead of the Curve
Today, Cosmo PR specializes in advocacy and communication strategies for companies in the healthcare and food industries. Clients include major industry players like GlaxoSmithKline, for whom Cosmo helped lay the groundwork for the Japan introduction a cervical cancer vaccine. Under Sato’s leadership, Cosmo has built an enviable network of policymakers, doctors and patient groups, while also working closely with organizations like the Medical Journalists Association of Japan and the ACCJ – where Sato serves as Chair.
In recent years, Sato has won a string of awards for her work, including “Business Stateswoman of the Year 2011″ from the Harvard Business School Club of Japan and “Outstanding Individual Achievement” at the Asia-Pacific SABRE Awards. Cosmo, too, was named “2011 Japanese Consultancy of the Year” in the Holmes Report.
The media loves to portray Sato, who is now 52, as the model female CEO, the one who can have her cake and eat it too. Certainly that is one way to describe her; in addition to building a thriving company, she also has a husband and three grown children. But when she met with the Journal in her office on a sunny March afternoon, Sato didn’t want to talk about work-life balance or even a subject that has long been dear to her – female empowerment (Sato founded and later sold a website dedicated to empowering women, womenjapan.com).
Instead, she wanted to focus on her company and how it evolved from that editorial-driven PR firm to the award-winning communications consultancy that it is today. Embedded in that story, she says, are crucial lessons for firms in Japan. And when you listen to her story it becomes apparent that the most impressive thing about Sato isn’t that she has risen to a position in Japan that few women have before. Rather, it’s her consistent knack for staying ahead of the curve.
Out of the Comfort Zone
In the 25 years that Sato has sat in the president’s chair, she estimates that she has changed the direction of her company four or five times. Looking back, she sees herself more as an entrepreneur type than a typical CEO.
“The natural tendency for companies is to become conservative and then be sort of pessimistic or inward-looking and my job is to make sure that everyone is looking outward, pushing them and pushing them,” says Sato. “I’m constantly thinking about where the world is going and how we need to change to keep up. I don’t like us to be in a comfort zone, ever.”
Getting Cosmo out of its comfort zone was the very first thing Sato did. When she began refocusing the company, she quickly identified that foreign firms lacked brand identity in Japan, so Sato decided that this would be Cosmo’s new focus. However, in order to meet the needs of these new overseas clients, Sato needed a staff with a particular expertise and language skills. She needed bilinguals like herself who had been educated abroad – even though, unfortunately, such people were scarce at the time.
Sato came to the conclusion that she would need to hire foreign people not just as token copy-editors, but to work closely with the rest of her Japanese team. Essentially, two people were needed to come together to make one bilingual “person.”
“The major challenge was changing the Japanese mindset, the fear of dealing with their foreign counterparts,” Sato explains. It would take years. One of the first things Sato did was to ban the use of the expression “in Japan” from the office. It’s an example of one of the small – but necessary – little changes that can provoke a big mental shift.
“You can’t say ‘in Japan’ because the world is going to go more and more global and, yes, we understand local sentiments, but we’re in the service business so you can’t use ‘in Japan’ as an excuse. You always have to come up with a constructive solution – and that was the culture I began, which is always to provide solutions.”
Walking through the Cosmo office, Sato emphasizes the open layout: one big room with clusters of desks facing each other.
“I make them sit next to each other,” she says with a laugh.
Of all her successes, it is clear that her cosmopolitan team is among the dearest.
“One of the things that I felt really proud about this company is that, if a foreigner walked into Cosmo 25 years ago, they’d be treated as a foreigner – as okyakusan. But now when they come in, our people are so used to working with foreigners that immediately they’re on a first name basis,” she says.
“I changed the company from being insular to being natural. There is an ease that carries over into the workplace, an ease to work with new people from different countries. This is very important because Japanese companies don’t have that.”
Importance of Specialization
One of Sato’s other critical moves was to specialize. After the boom years, Cosmo rode out the 90s downturn by helping companies navigate the thorny language of mergers, downsizing, and “refocusing.” With the new decade – and new market and economic realities to face – Sato felt that it was time to move forward again.
company,” explains Sato.
This was how she decided to focus on the healthcare and food industries, and decided to build up a knowledge base by adding doctors and scientists to Cosmo’s advisory board. It is also her favorite way to make decisions.
“The best way for me to envision which way the company is going is trotting around the world. I want to see what’s happening. What are the leading companies doing? I spend about a hundred days out of the year outside of Japan really talking to different firms.”
Talk about a global strategy. It helps that Sato has an international network of friends that began with her student days (she earned a BA in East Asian studies at Wellesley in Massachusetts) as well as a global family (her husband works in Hong Kong and her children study and work in the US and Singapore). She’s also a self-professed information junkie and even admits to reading celebrity gossip rag Radar online.
Increasingly, Sato is looking more and more towards Asia and expanding her network there.
“I go there, find out what’s going on and then I come back and share it with my people. It’s not like the CEO is off doing their own thing,” says Sato, who also notes that Japanese companies, in general, would benefit from a more open policy towards sharing information.
“That is the message I want to send to the heads of big companies in Japan: don’t underestimate your staff.”
The latest project from the globetrotting CEO is a book on communication tools and strategies due out later this summer from Nikkei. In it, Sato hopes to distill some of the lessons learned at Cosmo, turning it into useful advice for a larger audience.
And while, as always, she’s wondering about what will come next, Kumi Sato is also happy where she is.
“I like running Cosmo more than I did ten years ago,” she says. “One of my mentors said to me years ago that if you want to create a great firm, hire people who are smarter than you. I truly believe this and it’s exactly what I did.”
Photography by Benjamin Parks