Thomas Hoover - The samurai strategy

When I picked up the receiver, waiting at the other end was Mr. Yasuhiro Tanaka, office manager for the New York operation. He chatted a bit about the weather, how nice it was to be working in the U.S., the usual. Finally he mentioned that he needed to meet with me to discuss, among other matters, certain legal questions concerning one of the other leases in their building. Would it be convenient if he came down to my place and we went over the paperwork?

Not necessary, I replied. I just happened to be headed for midtown in the next few minutes. I'd throw a copy of the leases into my briefcase and drop by to see him. Then before he could protest, I mumbled something about the doorbell and hung up. The phone rang again immediately, but I didn't answer it. I was already putting on my jacket.

I scribbled a few notes for Emma, taped them to her word processor, and headed out the door. Minutes later I was in their Third Avenue lobby, greeting the new security staff, several of whom, as a favor to Tanaka, I'd interviewed for their jobs.

Then I took the elevator up to DNI's offices on the eleventh floor and proceeded to have my argyle socks blown away.

First off, top security. The entryway just off the elevator bank had been completely transformed. TV intercom, steel doors-it could have been the vault at Chase. I told the camera's eye who I was and then waited while a computer somewhere gave me a voice-ID check. How they managed to have me in the system already I wasn't exactly sure… maybe they'd taken it off the phone?

After I'd cleared that, the doors slid open and I entered the first chamber of a two-room security check. An electronic voice ordered me to put my briefcase into the X-ray machine while I proceeded through the metal detector.

That cleared, the set of steel panels leading into the next room slid open and I went in… to be confronted by two crew-cut guards who could have been retired sumo wrestlers. As the doors clicked behind me, I took one look at DNI's welcoming committee and realized they were packing Uzis, those Israeli automatics that could probably cut down a tree in about two seconds. No candy-ass.38's for Dai Nippon. Without ceremony they commenced a body search. It was all very polite, but it sure as hell wasn't perfunctory. I just stood there in astonishment while this gorilla roughly twice my size felt me up.

That indignity completed, I was now in line for the real surprise. Yet another set of steel doors opened, and there awaited the man I'd been dealing with over the phone, Yasuhiro Tanaka. Medium build, late forties, cropped hair, automatic smile-he was Noda's chief of operations for New York. He didn't say much, just led me onto the floor, heading for his office. But he was clearly the on-site daimyd: lots of heavy bowing from the young, white-shirted Japanese staff as we headed for the corner suite.

Which brings us to the real shocker. Dai Nippon's floor operation looked like the flight deck of the Starship Enterprise. Let me attempt a brief description. In the far back was a massive NEC augmented supercomputer-a half dozen off-white octagonal units about head high, one the mainframe and the others storage modules arranged alongside in a neat row. Pure power. The whole thing was encased in a glassed room with (I assumed) critical temperature and humidity control. Then out on the floor were lines and lines of workstations. Computer screens everywhere, printers running, stacks of color hard copy-pie charts, bar graphs, spreads-plus terminals carrying every financial service offered by cable or satellite.

This was just the first, five-second glance. Incredible, I thought. There must be a heck of a lot more Japanese investment in the U.S. than anybody realizes.

But something had to be wrong here. Why should…? Finally I slowed down-Tanaka was hurrying me along, clearly annoyed that I'd appeared uninvited. That's when I noticed the rest. Across one wall was a line of projection TVs, on which computer data was being scrolled. As we walked past, I noticed that each screen seemed to be under the scrutiny of a team of analysts, who were intently studying the numbers, comparing notes, running calculations on their individual terminals.

What's this all about?

I stopped before one screen and studied it a second. Beneath it a small sign said simply "Electronics." The one next to it read "Biotechnology." Then I glanced at a couple of others. Each one covered a different industrial sector. Gee, I thought, you're really out of touch, Walton. Who would have guessed Japan has so much investment in manufacturing here. I didn't remember much going on besides a few joint ventures. Sure, they've got a few auto assembly plants, that steel plant they'd bought out on the coast, some TV-tube production, chips, VCRs. But mostly it represented entries into sectors where they're trying to get the jump on protectionism, start a token manufacturing operation here before they get shut out.

"If you have any questions, I'm sure we can discuss them later." Tanaka had taken my arm and was urging me politely toward his office. The whines and hums of laser printers and the beep of computers made conversation all but impossible.

"Well, I was merely interested…" Then I stopped.

Know that test psychologists have, the one where you look at a couple of silhouettes and describe what you see? If you think you're supposed to look at the white part in the middle, then you see one thing-I think it's a vase. But if you concentrate on the black instead, you see something else entirely, maybe the profiles of two human faces opposite each other. Thus what you see is largely a product of your prior assumptions concerning what you're supposed to be looking for. Or maybe it measures whether you view the world as a positive or a negative image, something like that. I don't recall exactly. I do remember receiving a B- in Psych 101, which was generous.

The point is, what I first thought I saw was actually the inverse of what was really there. I'd told myself what it was, rather than believing my eyes.

Dai Nippon was running analyses, bet your ass, but the industries under their silicon microscope weren't Japanese. They'd computerized the financial report of every American company traded publicly and were now in the process of taking those outfits apart.

And I can assure you it was cold-eyed in the extreme, strictly hard numbers: quarterly earnings, long-term debt, inventory, stock outstanding, CEO bonuses. As any professional analyst would do, they'd cut right through a company's glossed-over excuses, phrases such as strategic retrenchment, aimed at the dividend-nervous retirees in Cedar Rapids. They were putting together the real story.

Same with the financial markets. Screens were scrolling up- to-the-second quotes on everything from three-month T-bills to thirty-year Treasury bonds. Computers were running arbitrage spreads on every issue. They knew exactly where they stood with all their futures contracts. I realized my little telephone boiler room had merely been the tip of some awesome iceberg.

"Mr. Walton, it is a pleasure to meet you in person." Tanaka was ushering me into the corner office after our pass through the floor. Unlike most executive suites in New York, its windows were sealed with heavy drapes. Again, total security. "Let me order tea." He waved at somebody out on the floor.

I nodded, still chewing over the setup and trying to understand what in good Christ was underway.

"I'm sure you are a busy man, so perhaps we should proceed directly to my concerns. As you may have guessed, we are almost ready to move into a new phase of our operation."

"Oh." I guess it must have sounded dumb, but I honestly couldn't manage a full sentence. Finally I recovered slightly. "I'm a little surprised by the scope of all this. What's the purpose?"