Yoshiko Shinohara is the billionaire founder of Persol Holdings, one of the biggest Japanese temporary staffing (interim) companies.
She owns 25% of the business and at 87 years old, is the richest woman in Japan.
Persol in 1973 in her 24-meter square apartment at a time when temporary staffing was illegal.
She had no business experience nor any education before starting.
This is her story.
Beginnings
Yoshiko Shinohara was born in 1934 in Kanagawa. She had four brothers and sisters.
She grew up during WWII, a tough time in Japan. Her dad, a school headmaster, died from a disease when she was 8 years old. Her mum never remarried and raised the five kids while working as a midwife.
This had a strong impact on Yoshiko.
She learned the importance of education from her dad and the habit of hard work from her mum. She also saw how the job market constricted women to low-skilled low-paid jobs.
She didn’t know it at the time, but this problem would become the raison d’être for the company she’d found 30 years later.
After Yoshiko graduated high school, she went to work for Mitsubishi in 1953.
She got married that same year but quickly realize she didn’t like it. Despite the disapproval of her brothers and mother, she got divorced.
And then nothing happened, until 1962.
At 28 years old, Yoshiko felt something was wrong. She didn’t want to work dumb jobs forever. So she started taking English lessons at night.
Lesson after lesson, her desire to go abroad grew, and in 1966, she left.
She first went to Switzerland, then spent four years in England. She went back to Japan briefly in 1970 then moved to Australia in 1971 where she worked as a secretary for a marketing company.
In the beginning, she was shocked to see energetic women in executive positions.
When someone came to replace her sick colleague, Yoshiko wondered where that person had come from.
This is how she learned about temporary staffing.
She found it amazing.
Setting Up Persol
Yoshiko left Australia at 38 years old and went back to Tokyo in 1973. She tried to get a job, but the Australian workplace environment she had experienced had changed her forever.
She could no longer stand neither working simple jobs nor the male-led system.
At the time, Japan was a patriarchal society and women had little credibility in the workplace. Since they were considered to be clerks no matter the position they occupied, they didn’t earn much money nor progressed in their careers.
Many women stopped working once they married. Older women felt shame in continuing their job. The ones who stayed struggled to find good opportunities.
Yoshiko wanted to fix these problems.
So, she came up with a mission: improving women’s place in the workforce.
She rented a 24-meter square apartment in Tokyo and launched Tempstaff Holdings (the name changed in 2017 to become Persol) with 1 million yen ($20k with inflation).
Yoshiko never expected Persol to succeed, so she didn’t take the business too seriously at the beginning. She went as far as to call it “a joke” in one of her interviews. After all, “business” wasn’t the goal.
The real purpose was to help women.
Here’s how it worked at the beginning.
Yoshiko would make leaflets advertising her services and send them to foreign companies. She didn’t trade with Japanese companies because she assumed the foreign ones would be more open to hiring temporary staff as they already knew the system.
Persol would then draft a contract and send one of their temporary workers to the company.
The contract was key as both duties and salaries were fixed before the company knew whether the worker was male or female.
This enabled women to take jobs they normally wouldn’t have access to and develop a sense of professionalism.
The idea was brilliant, but the business didn’t work at all at the beginning.
Yoshiko was forced to open an evening English course to pay rent while her mum sent her rice to eat.
Then one day, she received a letter from the government.
Growing and Lobbying
The letter was sent to let Yoshiko know that temporary staffing was illegal, and that she was required to close her business down.
The first idea that came to Yoshiko’s mind when she read the letter was how big the prison cells really were.
The second thought was how stupid the letter was.
Temporary staffing was forbidden because social laws were strong in Japan. Companies, when hiring workers, had to give them a contract for life.
Yoshiko never understood why.
Many companies were desperate for momentary workers and many women were more than happy to be employed as temp staff.
Furthermore, life employment was expensive for companies.
Yoshiko knew she was delivering value. If the law was against what she did…then she’d have to change the law.
She hated losing and intended to win against the government.
So instead of closing down Temp Holdings, she grew it.
Five years after starting, she finally made enough money to rent proper offices and pay herself a salary. No more evening English lessons.
Meanwhile, the government kept on threatening to close her down.
She allied with other temp staff agencies and lobbied the hell out of them.
She eventually won in 1985. The law was changed and temp staff was now legal.
Business kept on growing. Faithful to her mission, Yoshiko only hired women workers to fulfill the temporary positions.
When she needed employees to help her manage the business, she naturally hired her temp workers, but full-time.
The business was exclusively female for 15 years, until Yoshiko wondered if it was a good thing.
She had noticed her company wasn’t growing as much it should, so she investigated.
She asked her employees why they weren’t growing and they answered they had tried everything. Growing had become impossible.
Yet, Yoshiko thought otherwise.
She found out that her execs weren’t trained how men were trained. Women were more defensive than offensive, hence better at keeping existing business than seeking and conquering new contracts.
So Yoshiko felt the need to hire men.
She discussed the idea with her team which strongly opposed it.
Yoshiko still went ahead and hired the first men in 1988. Results came fast and the company grew at a speed unseen before. It was a turning point for Yoshiko.
She understood that men and women had their strengths and weaknesses and that both were needed for good company management.
This revolution wasn’t easy, as many women were reluctant to change to protect their line of business. Yoshiko did what she had to until the culture in the company changed.
After she built the initial male exec team, seven of them made a list of reforms to implement and delivered it to Yoshiko. To show how serious they were, they threatened to quit if the reforms weren’t implemented, and they signed the list with their blood.
Yoshiko, impressed by their dedication, implemented the reforms.
She kept on growing the business by delivering what customers wanted.
When she realized workers did a better job when they knew what to do, Yoshiko started training them, which pleased the companies they were sent to.
The Lost Decade
The beginning of the 90s signed off the start of the Lost Decade, a catastrophic moment for the Japanese economy.
The Lost Decade started in 1991 after the burst of the asset prices bubble that had begun in 1986. When it blew up, the Japanese economy stopped growing for 10 years (most economists have agreed that Japan has not grown at all since 1991, making the decade a 30-year long period).
Ironically, the economic crisis was a great opportunity for Persol. Companies sought to cut costs as much as they could. Replacing employees with temporary staff was a great solution.
Seven years later, Persol went public.
In 2007, the company had consolidated sales of 228.8 billion yen ($1.9 billion), 42 group companies, 252 service networks in Japan, and 9 locations overseas.
In 2010, Persol purchased 4% of Kelly Services, a US temp staff company. In 2012, they built a joint venture to focus on Hong Kong, China, and South Korea.
Finally, in 2013, at 79 years old, Yoshiko retired exactly 40 years after starting Persol.
One year later, she sold 5% of her shares and established a foundation to help students studying healthcare and social services.
In 2017, Yoshiko became a billionaire.
The company predicted further growth as Japan will keep on missing an increasing number of workers whose demand could be met by Persol.
Style
Yoshiko credited her complete lack of skills and experience for her success.
“Had I had experience, I would have been too scared to start”.
She made plenty of mistakes, and succeeded only because she refused to quit. “Failure is the mother of success”.
One day, the tax office called her about some taxes she hadn’t paid. When she asked what these taxes were, the officer on the phone was laughing.
Yoshiko highlighted the need to take care of the people around her because these people helped her and supported her.
The most important qualities for leaders are to be humble, honest, passionate about the work, and doing your best.
The first piece of advice she has for aspiring entrepreneurs is not to be selfish.
“We wanted to be a company needed by society by providing job opportunities that bring joy to those who want to work, not self-interest”, she said in an interview.
Companies that last last because they seek to have an impact and deliver value to society.
Yoshiko didn’t build Persol to become a billionaire. In fact, she had never desired to have a company.
She built Persol because there wasn’t any other great place to work at. She wanted to have a cool job and give the same opportunities to other women.
She wanted to make a mark through a business that “is needed in the world at large. I want to contribute to society through business.”
She was mission-driven. Good businesses are built on top of the founder’s passion and aspirations.
“What impact do you seek to make? Have big aspirations, this is how you build a great business”, she said.
One of Yoshiko’s observations is the theory she called “hermit-crab management”.
A hermit-crab starts in a small shell and changes shell as it grows. Persol evolved the same way. They continually changed their management practices as they grew.
Yoshiko further described Persol’s way of growing as “cell division”.
Cells split in half, then grow to make more cells. Persol grew in the exact same way.
As we can imagine, Persol did not stay in its line of business. While temp staff still makes the bulk of their income, they also moved into outsourcing, bought other companies, and they are now doing recruiting, consulting, and systems development.
The company has contracts with 27,000 companies in Japan and 13 other countries, including the U.S., China, India, and Australia.
Conclusion
Yoshiko has always declared she was the most average of normal people. She has no special skills, no special talents, no specific abilities.
She built her business because she was driven by the desire to change the workplace for women.
Her distaste for losing and stubbornness not to give up helped her build Persol into the giant company it is today.
Yoshiko Shinohara embodies the difference between millionaires and billionaires.
Millionaires make money because they want to.
Billionaires make money as a consequence of fixing a problem they’re passionate about.
Millionaires retire when they can. Billionaires work because they enjoy it.
The only difference, ultimately, is their purpose.
Yoshiko relentlessly focused on hers.
And this is why she succeeded.
For more billionaire stories, head to auresnotes.com.
Sources:
Subscribe to my monthly newsletter and I'll send you a list of the articles I wrote during the previous month + insights from the books I am reading + a short bullet list of savvy facts that will expand your mind. I keep the whole thing under three minutes.
How does that sound?
