Firm icons Ken Ohmae and Fred Gluck join forces to host a week-long program on innovation and startups

Former Senior Partner and Japanese organizational theorist Ken Ohmae – hailed by the Financial Times as “Japan’s only management guru” – recently brought 81 Japanese CEOs and Presidents to Silicon Valley for a week to learn all about innovation and startups. There he teamed up with former Global Managing Partner (and longtime friend) Fred Gluck to give the visitors a unique insight into how innovation happens at the grassroots level. Our discussion with them ranges from their 40-year friendship to post-retirement entrepreneurship.

Ken Ohmae (TOK 72-94) and Fred Gluck (NYO, FIR 67-95) – two iconic figures in the history of the Firm – have been close friends for the last forty years. In fact, ever since they first worked together here.

Early ties can bear fruit for a lifetime. That is clear from the recent cooperation between Ken and Fred. As part of the Koken-Kai overseas study program for Japanese executives, Ken brought 81 CEOs and Presidents of Japanese firms to Silicon Valley for a week. During that time, they met up with Fred for an afternoon at CytomX Therapeutics, which Fred founded and where he continues to serve as a Board member. The event also included presentations by cancer diagnostics company Cynvenio, also founded and chaired by Fred, and computer-guided surgery experts TrueVision 3D Surgical, co-chaired by him.

The idea of physically taking Japanese top managers to other regions has long been close to Ken’s heart. When he left the Firm after 23 years, he was determined to continue developing the network of top executives in Japan – not just from major corporations but also small- and medium-sized enterprises throughout the country.

With that in mind, he set up a monthly meeting with executives in Japan to discuss current issues.

Over time, that meeting gradually expanded to other parts of Asia, including Thailand, Bangkok, Shanghai, and Korea. Now numbering around 470 members, the Koken-Kai group meets every month to discuss subjects chosen by Ken.

Twice a year, the group takes a trip – in the spring to somewhere nearby, and in the autumn to somewhere further away. “The main purpose of the trips are to find out what's happening at the frontline of technology and twenty-first-century business,” says Ken.

How do the trips influence participants? In two ways, according to Ken.

“One is that it makes them think about their own business – whether or not the business can sustain the current situation, or whether they have to do something fundamentally different from simply continuing the existing corporate direction.”

“The second is to find opportunities to tie up with companies or to find investment opportunities,” he adds. “In that way the participants not only become interested in these companies individually but can also become shareholders in them.”

Relationships are key

In previous years, Ken has also taken Koken-Kai attendees to meet prominent political figures, including the Chinese President (2005) and the Prime Ministers of Italy (1998), Singapore (1995), Malaysia (1995) and Australia (1994).

For example, when Ken was with the group in Italy, he got on the phone to then Prime Minister Romano Prodi. “We’re in Bologna,” he said. “If you have the time, come and visit us to talk a little bit about the Italian economy.”

The next day, Prodi flew in to meet them.

“We had a wonderful time talking about Italian politics and the Italian economy,” Ken remembers.

“Other heads of state we’ve met in the past were people with whom I developed relationships while I was with the Firm. So it wasn’t difficult for me to pick up the phone and call them up and say, ‘A bunch of Japanese CEOs are visiting. Why don’t you make yourself available?’”

Fred Gluck believes the key to the success of the visits lies in Ken’s relationship-building skills.

“In his years of being at McKinsey and writing and speaking around the world, he built relationships that kind of make this a unique thing,” says Fred. “I don't know a lot of people who have that kind of access and the imagination to carry it out. I think that’s what the real key is.”

A lasting impact

The trips arranged by Ken often have a lasting impact on the participants; all of them extremely accomplished individuals working in business or government.

“We have, for example, one of the top producers of consumer packaged goods in the country,” says Ken. “The CEO of this company always sets up a factory and sales distribution in the countries we visit – Indonesia, Russia, Ukraine. It’s very interesting. Now the company enjoys about 40 percent of its sales overseas.”

“When we visit these countries, they get to know the CEOs and business alliances are formed,” he continues. “For example, a Japanese retailer, Hankyu, formed a joint venture with a Taiwanese company that today operates one of the largest department stores in that country – as a result of this one meeting that took place during the Koken-Kai trip to Taipei!”

Why Silicon Valley?

Ken gives a lot of thought to deciding where to take the group. “We’ve been to the United States four times over the last 20 years,” he says, adding that they’ve also visited Australia twice, as well as many countries in Europe.

“Last year, we went to Italy,” he says. “Italy is a country where the small towns are flourishing – becoming very global through their products and brands. This is what we need in large cities and municipalities. So we spent a week visiting places like Parma where they make prosciutto and cheese. We were very impressed with the global activities of these small Italian towns.”

Over the last year, the Koken-Kai group have studied high-tech issues such as global positioning systems and fintech. By physically traveling to the Bay Area, they were able to meet many of the companies on the front line of such technology – 23 such firms in total.

The choice to visit three firms with which Fred Gluck is involved was an obvious one. “All three of the companies were basically started with angel money," says Fred. “And now they’re all just about ten years old.”

“CytomX is public. TrueVision is now cash flow positive and has great distribution agreements, and is very likely to be highly successful. And Cynvenio, which started when liquid biopsy was thought to be inconsequential, is now emerging as one of the key enablers of precision medicine,” he explains.

“The purpose of Koken-Kai visiting Silicon Valley was to learn how innovation gets done at the grassroots level,” Fred continues. “The companies are quite successful – and they’re not finished being successful yet. These are fast-moving industries but right now, things look good.”

What do the attendees take away from their travels? “One thing they took away is that you don’t have to retire when you’re 65,” Fred laughs.

“They also took away some of the natural lessons,” he continues. “It isn’t easy. You need to have a big idea. You need to have good technology. You need access to capital. You need staying power. And most of all, you need very talented people.”

From left: Andre De Fusco, CEO of Cynvenio; Ho Young Huh (SEO, SVO 97-05), Chairman of CytomX;
Fred Gluck; Ken Ohmae; Sen McCarthy, CEO of CytomX; Forrest Fleming, CEO of TrueVision

Lifelong friends

Ken and Fred’s friendship stretches back over four decades.

Fred is quick to point out some of Ken’s achievements: “Ken was one of the prime movers in the globalization of the Firm – one of the great innovators.”

Ken – “Mr. Strategy,” as he is also known – has a long and impressive résumé. “But the résumé is not as impressive as the person,” says Fred.

“Ken was a keynote speaker at Stanford’s 100th anniversary. And at Dow Jones’ 100th anniversary. While he was at the Firm, he wrote quite a number of books, including “Triad Power,“ which was the first articulation in book form of the idea that the world was evolving into three major industrial regions: Asia, Europe, and the Americas,” says Fred.

“He followed that with “Beyond National Borders,” “A Borderless World,” “Mind of a Strategist,” and on and on. Many of his books have been translated into English,” he adds.

The admiration is mutual.

Ken: “Fred is so impressive. The Koken-Kai group were lucky enough to hear how the three companies were formed, how they are doing, and how CytomX has IPO'd already.”

“We had the fortune of having Fred share his personal perspective on the development of these companies – companies that he founded or reoriented after the age of 70,” Ken adds. “And also of hearing his perspective on retired life. Entrepreneurial retired life.”

“When we did the final questionnaire after visiting 23 companies, number one was Fred’s talk at the dinner about his personal journey post-retirement,” says Ken.

The McKinsey connection

What did Fred and Ken learn during their many years at the Firm? Ken: “I was very lucky to be thrown into many situations. I would say many difficult situations. But that's where I started my business career.”

“Before that, I was an engineer struggling with nuclear plants,” Ken adds. “Everything I know about business, relationships, and networks was formed during my Firm life. It’s everything.”

Fred’s story is similar: “I’m also an engineer. I’m not an M.B.A. I don’t have any business training – I came directly from Bell Telephone Lab. So I learned all my management at McKinsey as well. Ken and I are similar in that regard.”

Fred says that the McKinsey connection is invaluable. “Ken calling on me when he was bringing his group to California is another example of how long-lasting relationships can be and frequently are,” he says. “I value him as one of my closest friends anywhere.”

Message for alumni

Ken’s message for alumni? “They need to continue to strive as entrepreneurs,” he says.

Fred points to Ken as an example of people who left the Firm moving on and doing interesting things. “There’s an important lesson here: There is life after McKinsey,” says Fred. “Coming out of McKinsey you’ve got a lot of useful talents – skills that have been developed while you were there. There’s lots of problems out there – go help solve them.”