Few know the story about the unknown florist from Kumamoto, Kyushu who came to Tokyo and became a big success. What made the difference? Was it good fortune or dedicated diligence? Did he possess some inimitable technology? Was his thinking of a different vein? Probably all of these apply. A regular commonplace florist who came to Tokyo, defined his company’s corporate organization, and listed his company, Beauty Kadan – the market leader in funerary flowers.

There is always a dramatic story behind the founder of a company, usually because of the great struggles he or she underwent upon founding the company. In the case of Beauty Kadan, however, such trials and tribulations were borne by the Senior Managing Director, who was a mid-career hiring.
Keishi Oda, the president of Beauty Kadan, was originally a graduate of the National Defense Academy of Japan and a career self-defense force member. However, he wanted to go into business and left the self-defense forces at 30. Unfortunately, he had no money and no idea where to go next.

When he returned to his hometown of Kumamoto, a former senior of his at school introduced him to Misao Mishima (present day Chairman), who was running a large flower shop known as Beauty Kadan that specialized in funerals. Oda was invited to join the company but was not inspired to do so at the time and refused the offer.

After two or so months had passed, Mishima called again to invite Oda to join him as he started another company. This time, Oda jumped at the chance.

Five years passed and again Mishima came with a request. Of the original company’s twenty or so employees, four people – numbers two through five – had quit and he needed Oda to run the company. Mishima was convinced that Oda’s experience in the self-defense forces would help him successfully organize the company. Since the new company had been helped along for five years by Beauty Kadan, Mishima felt convinced that Oda should help. The year was 1996.


Organizing a Disorderly and Non-Functioning Unit

This is where the drama in Oda’s life first unfolded. The production of funerary flowers requires certain skills. However, “Once I arrived, it was apparent how disorganized the company really was. Though we had people, none were skilled. I had no idea where to begin,” reflects Oda.

The company also hadn’t been incorporated and was just an individual proprietorship, so he had no capital to grow. Banks also don’t generally lend significant amounts of money to such proprietorships. Three years of financial data were required to even apply for a loan, and trying to do that presented other problems for the company. There was seemingly nothing that could be done.

Knowing he had to start from somewhere, Oda began by training engineers and introduced a skills-based salary system, in which some salaries were raised by 40,000 or 50,000 yen while others only increased by 1,000 yen or so. Some employees complained but Oda was resolute in seeing the new system through.

However, the problem remained that they did not have the three years of financial records required to apply for a loan. The people who had quit the company had gone to Fukuoka, the largest metropolis in Kyushu, and launched the same business. There was no question it was bigger than Kumamoto, but any attempt to enter a new market requires money.

Oda comments, “I talked to a friend who graduated after me from the same school and was a deputy branch manager of a bank. He told me to prepare an annual business plan and to properly make monthly reports (he laughs).” After doing so for one year, the junior alum lent 30 million yen to the company. Unfortunately, their attempt to enter the Fukuoka market ended in failure. They were close to breaking even, but the business itself is not an easy one for late entrants to post a profit.

Hellish Days Following Failed Tokyo Entry

It was at this point that Beauty Kadan decided to enter the Tokyo market. Oda, who wanted to get something going, studied the Tokyo market firsthand while on personal trips there. He discovered that funerals in Tokyo tended to use plain wood for the altar, and hardly ever were natural flowers being used. He thought long and hard about whether or not this represented an opportunity. He concluded that there was no reason why the natural flower altar would not become popular. The funerals of entertainers and company funerals all used natural flowers, and surveys of consumers pointed to an interest in real flowers. He found out that it was the funeral firms that had created the barrier to real flowers. They used the plain wood because it could be used repeatedly. In contrast, real flowers could only be used once and thus cost money each time. He decided that all he had to do was convince the funeral firms of the value of using real flowers, and hinging on this judgment Beauty Kadan entered the Tokyo market in 2001.

Beauty Kadan set up its first shop in Ota Ward, but this was only the beginning of the daily hell that was to ensue. He called the sixty or so funeral parlors in the area, with nearly all replying that there was no need for the company’s services. The results were almost nil, and even the office staff began to notice a depressing air hanging over the company.

One of the staff asked, “Are we going to give up on the market?” Oda decided to make his sales calls from public phones rather than from the office so he wouldn’t damage staff morale. Once he began doing so, he realized that the public phones all had phone books that listed the funeral parlors in the area and he has since followed this method. There is a Japanese proverb that describes how some people will not succumb to failure and simply fade away, but rather will learn and apply some lesson from their experience with failure and come roaring back. Oda himself has this relentless drive.

As he continued to struggle, he came to a sudden realization as he was looking at a list of funeral parlors. Small funeral parlors had nothing to differentiate themselves from their larger competitors. Then and there, Oda decided to focus on small parlors rather than large ones.

Reputation Spreads from Buzz Created by a Small Funeral Parlor

Oda began his sales calls with the challenge, “Have you differentiated your services from the competition? Let down your defenses and try it just once.” This approach began the trickle that led to a flood of orders.

As for smaller cities, he will use the wholesaling business that Beauty Kadan started when it entered Tokyo and will build a network based on this to supply local florists. He is convinced that demand will increase hereafter. The future of Beauty Kadan will indeed be an interesting one to track.