Ten Rules for Building a Good Company

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Today, I stumbled upon a book – “Tree-Ring Management” by Hiroshi Tsukakoshi. Hiroshi san is the Chairman of a kanten manufacturer far from the bustle of Tokyo , amid the natural beauty of Nagano prefecture in Japan.

In the book, he argues that the primary purpose of a business is to make its employees happy. Their management philosophy also indicates that slow, controlled growth is better than rapid growth and in fact fast growth is the enemy. Their philosophy is so unique that there is an HBR case study for on this management model. 

I did write about a model called as the “Heartbeat Model” for sustainable growth sometime back. 



In the book, Hiroshi san clearly lists down rules for building a good company. These principles help a business achieve steady and reliable growth, similar to the layering of tree rings. Hence the name of Tree-Ring  management. 

Hiroshi san clearly lists down rules for building a good company. These principles help a business achieve steady and reliable growth, similar to the layering of tree rings. Hence the name of Tree-Ring  management. 

I find these rules to be great principles by which we can run our businesses for long term success. So, here are the ten rules that he lists down and which makes the operating philosophy of Ina Food Industry. 

Ten Rules for Building a Good Company: 

1. Always produce good products. 

2. Do not produce too much or sell too much just because you can. 

3. Seek whenever possible to see at a fixed-price without offering discounts. 

4. Seek to produce products and services from the customer perspective. 

5. Create beautiful factories, shops, and gardens. 

6. Develop refined packaging and advertisements. 

7. Give back to the community by volunteering and by supporting culture and the arts. 

8. Take care of suppliers. 

9. Improve the company image by ensuring that everyone understands management policies. 

10. Carry out the above faithfully over time. 

From the book Tree-Ring Management by Hiroshi Tsukakoshi

As you can see from the list, none of these is a ground-breaking new concept. However, most of these practices, I would argue are grounded in good principles. 

These 10 rules cover all the different constituents that a business is responsible for – Customers, Employees, Suppliers and the Community. Simple rules that everyone in the company can understand and operate accordingly. 

Though I am not sure, how well Ina Food Industry is doing right now, I believe that the principles that the company was organised on are simple and powerful. 

With all the talk about startups and the unicorns, the idea of rapid growth has taken over our conscious minds. Not all businesses are built for rapid growth. Not all businesses can achieve rapid growth. Not all businesses need rapid growth and not all businesses can survive rapid growth.



There is a need today to bring this out in public consciousness and underscore the importance of steady growth, with the profits from the growth being re-invested in both the company and the community that it serves. 

The rhetoric of growth hacking and growth at all costs is not good for the society at large and we would be better served if we can understand and plan our businesses accordingly. 

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