Personal thoughts on the “Third Way”

“Third Way”, is the title of a recent publication by Eriko Yamaguchi, Founder, Chief Designer, and CEO of MOTHERHOUSE.

For most of you living outside of Japan/Asia, you may know the big multi-national brands such as “Toyota”, but you probably wouldn’t have heard of the brand, “Motherhouse”.

And when you do, you may think it’s a baby/maternity clothes brand, or a charity, perhaps linked to Mother Theresa.

However, it is neither.

It is a completely for-profit company which sources from 6 Asian countries, with 38 directly operated stores and 600 employees across 9 countries, and growing strong.

Yet you would be forgiven for mistaking it for a charity, because the founder, Eriko Yamaguchi, did indeed go to Bangladesh initially, after searching for the “poorest country in Asia”.

But instead of creating a charity, Eriko believed in the power of business, and the potential in the jute fabric, which, at that time in 2006, was seen as little more than cheap strong fabric useful for making big coffee sacks. So she convinced a local factory to make 160 Jute bags which she brought back to Japan in her “hand luggage”, with no idea of how to sell these other than that she would.

13 years on, Motherhouse is now in the midst of building a new factory in Bangladesh which will house up to 1,000 employees. It has worked to find the “best of the country” products in each country they have expanded, which now includes jute and leather goods from Bangladesh, jewelry from Indonesia, Myanmar and Indonesia, silk scarves from Nepal, and fine cotton garments from India for their new brand, “e.”.

Too often, the reason for expanding into emerging markets has been for two main reasons. One, to exploit the rich natural resources they have, or two, to exploit the cheap labour.

Motherhouse’s vision is to “create a globally acceptable brand” that is delivered directly from “developing markets”.

What makes them unique is the fact that whilst most companies may choose to outsource the factory work, or do the value-adding in Japan, at Motherhouse the local fabrics/materials are turned into end products by local craft workers, in company-owned local factories, managed and QC-ed by local management in each of the respective countries.

It is Eriko, the Chief designer and CEO, who does the travelling, and spends up to half of the year within these countries and designs each of the products with her craft workers locally.

Maybe we should call it a “fair trade” company as it has the producers at the heart of their business.

Maybe we should call Eriko a “social entrepreneur”, for the value adding production she has been leading in a number of the poorest countries in Asia.

But what I see really, is what any company should be doing as part of normal good business – creating quality products for consumers that the employees from design, to production, to promotion to sales, and management are all proud about.

Is it a perfect company? I’m sure it isn’t. And Eriko openly shares some of her struggles and mistakes in her new book, as well as in her routine updates.

But whether you are a company trying to go beyond on-the-surface “CSR”activities, or an (ESG) investor struggling to see how to engage with such companies in a meaningful way, or just an individual frustrated in the bipolarised movements across the world now, Eriko’s new book “Third Way” may give you some food for thought.

Hmm… But since the book is only available in Japanese for now, let me give you a little hint, which seems so simple and obvious, but hear me out.

Social purpose or Business? Design or Management? For the individual or for the organisation? Mass production or individual craftsmanship? Global or local?

These are the potentially polarised concepts Eriko tackles in her book. Instead of choosing one against the other, she talks of finding a way to get the most out of both sides – the third way.

Yes, it sounds simple. And the “third way” concept may be more common outside of Japan. But putting it into practice may be another thing, which Eriko explains very nicely in the book, or even better in her own words when you get the opportunity to hear from her directly.

What left the biggest impression on me was her talk at the recent Thanks Event for Motherhouse customers. Yes, there can be tensions within or between the regions where Motherhouse produces or operates. Yet within Motherhouse, they are healthy rivals in the production lines, but also part of one big family that unite in front of their global customers.

Sounds idealistic? Yes, but an ideal that I wouldn’t mind supporting.

If you are intrigued by their brand or their book, do venture onto their website, or visit their stores to decide for yourself. Perhaps its time to look for alternative brands springing out from Japan, which brings with it many other voices from the region.

Note: the link above is to their Japanese site which has more information, but you can then go to “en” link above for some information in English.