The best entrepreneurs are driven by personal experiences

For a total of 10 years, from 2010 to 2020, Nitin Nohria was the Dean of Harvard Business School – an institution at the forefront of global business management that has produced many well-known business leaders. We asked Mr. Nohria what he thinks corporations – which are the main drivers of economic activity – need to do at a time when increasing levels of inequality and the threat of climate change are exposing the limits of capitalism. We also asked him for the details behind his appointment as Chairman of the Board at　Rakuten Medical, Inc.

―― Today, a growing number of people are saying that capitalism in its current form needs to be rethought. What is your opinion?

I continue to believe that capitalism itself is the greatest driver of human freedom and prosperity. It is a system that gives people the freedom to make a life of their own choosing, of self-determination as consumers, as workers, as entrepreneurs, as investors, and in many other roles.
Whether or not people trust capitalism depends on its ability to provide them with opportunity and hope for a better life, and I cannot say that capitalism as it is being practiced today is adequately providing everyone with either of these. The growing inequality we are witnessing today is helping to erode trust in capitalism.

―― Companies play an important role in capitalism. What kind of behavior is required of a company at a time when confidence in capitalism is being eroded?

Capitalism has always required a sensible regulatory framework to define the rules of the game and to ensure fair competition. If companies don’t voluntarily self-regulate to minimize these harms, we may well need some regulation to reign them in. But what I am truly hoping is that companies will take on social objectives—like reducing their environmental footprint or creating jobs that provide a better standard of living.
We need to reinforce a virtuous cycle in which capitalism breeds prosperity while simultaneously paying heed to people’s lives and the sustainability of the earth. This requires innovation. I hope we can harness capitalism to show that reducing climate risk or tackling inequality can be accomplished while sustaining profitability in the long run.

―― In the summer of 2019, the Business Roundtable, an association of chief executive officers from America’s leading companies, announced the release of their new “Statement on the Purpose of a Corporation.” The original statement, which said that the primary purpose of a corporation is to serve shareholders, was revised to include a fundamental commitment to all stakeholders.

The Business Roundtable announcement was a powerful declaration of intent, and it will certainly have considerable influence, but this concept is a work in progress, and it will likely take some time before it is fully realized. Some skeptics think that American companies will not change that easily, but I am hopeful that this statement will be good for both business and society.

The importance of companies being driven by a larger societal purpose has a long history. For example, for more than 30 years now, we have been teaching the Johnson & Johnson case at Harvard Business School. The company’s management concept of “Our Credo,” which was introduced in 1943, summarized what kinds of responsibilities both the company as a whole and each individual employee had towards the company’s stakeholders. In the 1980s, one of the company’s products, Tylenol-branded acetaminophen, was tampered with (laced with poison), and this resulted in several deaths. Immediately upon learning what had happened, the company recalled all of the products at considerable expense and changed the packaging to prevent further tampering. This is a good example of a company that placed top priority on the lives of consumers and sought to restore trust, even if the company itself was not at fault.

We live in an age in which the role of a business in society must be clear. In such an environment, it is encouraging to see that emphasis is being placed on a company’s “purpose.”

―― You studied leadership a great deal during your time as the Dean of Harvard Business School. What do you think constitutes leadership in an age in which “a restructuring of capitalism” is being demanded?

I think that what capitalism needs the most right now is leaders who both have original ideas and also have the will to confront society’s problems. Our students are also interested in careers in "impact investing" that invest in clean energy businesses and corporate activities that make a positive difference (impact) in society. I think you could say that it is the mission of a business school to develop leaders who can change the world.

A leader must be able to gain the trust of others and work with them to accomplish things together that could not be accomplished working separately. Leaders need to be honest and have the strength to be able to put “we” before “I.”

―― What expectations do you have for Japan?

In 1988, when I joined the faculty of Harvard Business School, Japanese companies were driving globalization and this was evident in the large number of people they were sending to business schools in the US, but this trend slowed down considerably after 2000. In recent years, however, more and more young people in Japan are studying at business schools not only for the purpose of working at a big company, but also with the aim of pursuing a career as an entrepreneur.

Many of the best entrepreneurs are driven to do what they do because of challenges with which they have direct, personal experience. They think: “What can I do to solve this problem in society?” Mickey Mikitani, Chairman and CEO of Rakuten Group, Inc. and CEO at Rakuten Medical, Inc., whose father died of cancer, and who has dedicated himself to conquering cancer, is one such example.

Mickey Mikitani and I met with some young Japanese entrepreneurs a while ago. Most of them had started out working at traditional companies, but then pursued their dream of being entrepreneurs, saying that they wanted to create companies that would support Japan’s future. The spirit of entrepreneurship is growing in Japan. At the same time, Japan still has many companies that have been around for a long time. I think that Japanese companies are both resilient and adaptable, and have the ability to respond to change.

―― Could you please share some background on your appointment as Chairman of the Board of Rakuten Medical, Inc. in 2021?

I have been a small investor in Rakuten Medical for many years. The reason I decided to invest had to do with my respect for Mickey's entrepreneurial energy, as well as the fact that I was impressed by his passion for the fight against cancer.

I'd been watching Rakuten Medical grow for a long while, and in January 2021, I retired as dean of Harvard Business School and was able to devote more time to other matters. It was at this time that I decided to invest in Rakuten Medical, and Mickey asked me if I would join the company as Chairman of the Board. I gladly accepted.

―― Please explain why you were the one to receive the offer of becoming Chairman of the Board.

To begin with, I studied chemical engineering, and at that time I also became interested in biotechnology. After that, I got a master's degree in business administration and proceeded to have a career as a business school professor, but even now I am still very interested in biotech-related companies.

Since I first learned of Rakuten Medical, I've been fascinated and impressed by its innovative approach to "conquering cancer," and as Chairman of the Board, I thought it would be very meaningful if I could contribute in some way to the promotion of that mission.

―― So it's safe to say that you sympathize with the company's mission.

Rakuten Medical's mission is to conquer cancer and aims to realize a society where cancer patients and their families can lead fulfilling lives through its technology platform. This is the main reason that I am honored to be a part of this company.

Cancer is a disease that can affect anyone, regardless of place of birth or social status. Although cancer diagnostics and treatment are advancing with each passing day, it will take time to overcome the disease completely, and many people will continue to die every year. I find it very meaningful to be part of a company with the noble mission of conquering cancer and easing the burdens it imposes.

―― After his father's battle with cancer, Mikitani decided to personally invest in and directly involve himself in the management of Aspyrian Therapeutics, Inc. (now Rakuten Medical, Inc.), which was founded in the U.S. in 2010.

Like Mickey's father, my mother fought cancer for more than twenty years. In the end, however, she lost this fight. Though I had personal connections to one of the best hospitals and with some of the greatest researchers at Harvard University, it wasn't possible to save my mother. It is because of this experience that I sympathize so deeply with Mickey's motivation and Rakuten Medical's mission of conquering cancer.

■ Comment by Mickey Mikitani, Chairman and CEO of Rakuten Group, Inc. and CEO of Rakuten Medical, Inc.

“Nitin is like a legend in the business world. He is a leader among leaders and is respected by many around the globe. I am delighted to welcome him, someone I personally admire, to Rakuten Medical so that we can work together to achieve our mission of ‘conquering cancer.’”