Educated in Japan and the United States, Kiyo Sakaguchi, president of Prudential Japan, Ltd., was the first Japanese national to become a certified actuary (Fellow of the Society of Actuaries) in the United States. Sakaguchi grew up in a small town called Sasebo, located on Kiushu the southernmost island in Japan. After studying the American insurance business, he opened a small actuarial consulting office in Los Angeles. A client, The Prudential Insurance Company of America, asked Sakaguchi to help Prudential study the feasibility of entering the Japanese market. Research showed that the Sony name would be helpful to market Prudential’s products in Japan and that Prudential’s insurance expertise and selling know-how could be very successful in Japan. In 1979, Prudential formed a partnership with Sony called Sony-Prudential. In March 1980, Sakaguchi moved back to Japan with his American wife and three children to become Prudential’s representative in the joint venture.

The Japanese insurance selling system was shaped by Nippon Life when, after World War II, the company recruited young widows who depended on sales commissions to pay their bills and feed their children. Although most customers bought insurance policies more out of obligation than real need, Nippon Life became the world’s largest insurance company with 80,000 part-time salespeople who worked only on commission. To this day, most insurance policies sold in Japan are more a result of dispensing a neighborly obligation than the result of a need-satisfaction sale.

In studying the Japanese insurance selling system, Sakaguchi immediately found a major opportunity for transplanting American selling know-how to Japan. Between 1980 and 1987, Sony-Prudential recruited male college graduates, educated them to understand the customer’s needs, instructed them to pursue upscale markets and offered a wide portfolio of insurance products. In 1987, Sony and Prudential agreed to set up two independent companies. Sony bought out Prudential’s stake in the seven-year-old insurance company that employed about 500 people and, in October 1987, Sakaguchi was named President of the brand new company, Prudential Japan, Ltd. The new title included a staff of 14. After an intense period of preparation and negotiations with the Japanese authorities, Prudential Japan wrote its first insurance policy in August 1988. Today over 500 life insurance agents (called life planners) and 200 staff members generate annual premium revenues of over $100 million.

Prudential’s sales organization is a tightly structured machine that hums smoothly along. The productivity of a Prudential Japan life planner is about two and a half times higher than the average American counterpart. “Our life planners sell between two and two and a half insurance policies a week, while many U.S. agents sell only one life policy per week,” says Sakaguchi.

Recruiting a successful insurance salesperson is as tough a challenge in Japan as it is in America. Sakaguchi explains that most college graduates in Japan view insurance selling as a part-time job. Based on his extensive experience in the business, he and his team have developed a near perfect system to recruit, select, train and motivate new agents. Prudential benefits from the readily available mailing lists of university graduates and regularly invites prospective employees for career seminars. Prudential measures potential recruits on a 15-point personal and professional attribute scale, shows videos illustrating the key tasks performed by a life planner and offers all candidates a dual career path where they can pursue either insurance sales or agency management.

Sakaguchi describes the key benefits to the Japanese recruit: “Our system combines the job security benefits of the Japanese salaryman and the income opportunity benefits of an independent entrepreneur.” A poster in the training room shows the formula: C = C which stands for Compensation equals Contribution. Sakaguchi adds proudly, “We have many agents who earn over $200,000 a year. Last year, Kiyoshi Ishii, an insurance agent in Hiroshima set a new record with over $800,000 in personal income.”

The K.A.S.H. formula for sales success means company-wide opportunity for big rewards. While many insurance experts predicted little success with recruiting college graduates, Sakaguchi says, “We came over 10,000 miles from the U.S. and we are more committed to succeed than the Japanese. Our method of need-satisfaction selling to the educated, upscale client is our biggest strength.” He cites Prudential founder John Fairfield Dryden as a source of inspiration: “He pioneered an idea that was based on making a meaningful contribution to society. We tell people that we are creating a brand new profession in Japan. I am very happy about being able to help Japanese society.”

Sakaguchi introduced a memorable formula for sales success in Japan. K.A.S.H. stands for Knowledge, Attitudes, Skills and Habit. “Knowledge,” he explains, “is a passion with Japanese. Our agents take advantage of the Japanese CLU programs and there are many excellent teaching resources available. We want our life planners to learn from the market, the industry and our in-house training programs.”

In order to start each life planner with the right attitude from the first day on, Sakaguchi invites each new employee to attend a special employment ceremony. In the presence of all senior officers who form a receiving line, Sakaguchi hands each new employee a certificate of employment that begins solemnly with “From this day on, you are an employee of Prudential Japan, Ltd.” After a presidential handshake, the new employee advances to the deputy president and receives a Prudential lapel pin. Each senior officer in turn officially welcomes the new employee. This symbolic gesture communicates that, as in a marriage, both parties pledge to help each other grow.

As an illustration of the work attitudes at Prudential’s Tokyo headquarters, we found during a brief tour of the facilities at 7:30 p.m. that most employees, including secretaries, were still at work. When asked about their dedication Sakaguchi explains, “Japanese workers take their jobs very seriously. When you love what you are doing, you don’t count the hours you’re working.”

On the subject of selling skills, Sakaguchi explains, “Skills have to be honed on an ongoing basis. All our agencies are equipped with closed circuit TV systems for role-playing and training.” Agency managers monitor the skills development process and assistant managers take part in the coaching process.

The fourth ingredient in Sakaguchi’s K.A.S.H formula stands for successful habits. Based on the wisdom that success breeds success, Prudential encourages life planners to pattern their habits after the best producers in the business.

Since growth depends on quality Sakaguchi feels he has been fortunate in twice starting a company and learning how to harness business growth by creating a sales quality control system. No agency manager can increase his business unit beyond a certain level, unless and until certain quality criteria are met. Sakaguchi describes his basic system: “Quality drives profits. Agency managers can add up to five assistant managers to their teams. Each assistant manager works with a group of eight to twelve life planners. For agency managers to increase the size of their teams, first, every life planner within the group has to maintain a minimum level of sales and policy renewals. Second, the agency manager has to show us that he has developed sufficient manpower in his agency by continually recruiting, training and retaining the life planners in his agency. Third, in order to earn the right to increase the number of assistant manager units, the agency manager will have to produce one agency manager. In other words, their right to grow is contingent on making a quality contribution to the company.”

Sakaguchi’s quality growth system is working so well that his life planners outproduce Nippon Life’s part-time agents by a ratio of five to one.

Sakaguchi’s driving force may be his humanity. Not only a remarkable manager, Sakaguchi is also a remarkable human being. He takes a great deal of personal interest in the welfare of his employees. He often attends weddings and congratulates the couple and attends funerals leaving the customary money in an envelope. Sakaguchi’s ability to assimilate the cultural advantages of the United States and Japan and his skill at integrating Prudential’s U.S. know-how into a brand new system have become the foundation of Prudential’s selling success in Japan. Sakaguchi feels that the core ideas of the tested and proven American system didn’t need much adaptation to succeed in Japan. He feels that the trust and support of the U.S. headquartered company have been keys to his success.

Sakaguchi is comfortable with living in Tokyo. He says, “In Japan, as a consumer you get very good products and very courteous service. In the U.S. you can get what you want, but you often have to put up with reluctant attitudes.” Sakaguchi feels that the Japanese have a cultural advantage in that area because children are taught from a very early age that they should be courteous to other people. In Japan people don’t question that the customer is king.

To serve his Japanese customers even better, Sakaguchi plans to further expand the range of insurance products offered while improving customer service and upgrading the productivity of his organization. By the end of this decade, Sakaguchi predicts an annual premium income of one billion dollars. A remarkable achievement for a new kid on the block.