Nova burns out

The tragedy of the English-teaching company Nova is a gripping and revealing one. That students should have their fees returned and teachers and staff be given their salaries should go without saying. That the company had serious management and leadership problems should be equally obvious. Still, the Nova episode is reason to consider several aspects of Japanese society that shaped the rise and fall of one of Japan’s best-known companies.

Before the revelations of so many problems, Nova seemed a clear example of the best side of Japanese economics. The company started with little more than rent for “ekimae” (station-front) office space and a cute pink bunny icon for advertising. That a multibillion yen business could still be built from the ground up seemed to show that Japan’s system was not too rigid to allow innovation. Yet, the sad ending shows that the system is not so lax that improprieties can continue forever.

Apparently, Nova’s rise depended on alleged high-level contacts with various ministry-connected foundations and large investments by risk-taking entrepreneurs. Without that, and a reputedly autocratic management style, Nova could not have expanded so rapidly. The company, however, seemed unable to transform its initial pride and appeal into consistent strength and lasting quality. Ultimately, a combination of a good product, competent management and consumer-friendly attitude is the best business model.

When things go wrong for companies without those qualities, consumers are especially unforgiving. Nova did not endanger the health of children or potentially poison anyone, but their betrayal of trust is inexcusable. The outrage of students, who handed over their hard-earned money, and teachers and staff, who gave precious work hours still uncompensated, seems more than justified. As if acting out some ancient tragic drama, excessive pride blinded the company’s management to internal problems that were obvious to everyone else.

The estimated figures splashed across front pages are startlingly high. The outstanding debt stands at ¥40-plus billion. The language learning industry in Japan is a highly profitable one. People are willing to pay, but usually seek a balance of price and value. Surely the wiser students must have tried to find the best teachers and arranged their schedules accordingly. Yet, even these savvy consumer/learners were cheated in the end. Discount education simply does not work.

The figure of 300,000 students nationwide is almost as staggering. That number means Nova is perhaps the largest language-education provider in Japan. Ironically, most of the students attending Nova had already received the mandatory six years of English language education through high school, and either wanted more or needed more instruction. The education ministry should be reminded that something in language education is sorely lacking. It seems almost as if the public schools have simply been prepping students for Nova!

Beyond the problems of one company, these student numbers reveal how strongly people want to speak another language. Studying a language requires time and money, and clearly, people were ready to invest both. The broad awareness of the linguistic demands of globalization and the desire to get beyond the boundaries of Japan, if only for a couple class hours per week, are remarkable. Students genuinely put their money where their mouths were.

At the same time, this episode has revealed the large number of foreigners willing to come to Japan. As they go about the difficult task of recovering their wages and start to look for other jobs, they will be deciding whether to stay longer or give up and go home. One imagines them all listing their phone numbers outside the scores of now-closed schools to arrange private lessons. At the high point, over 6,000 foreign teachers were recruited to work at Nova. They may have come as a lark, but formed part of Japanese society for the time they were here. In this regard, Nova was a powerful force for internationalization.

Whatever the future holds for Nova after its bankruptcy filing and management restructuring, the need for English lessons will not disappear, nor will the push for internationalizing somehow reverse. Some students may give up, but most will continue to study in other ways. That English language study has become such an important part of Japanese culture is no surprise, but its vast scope, not to mention its profitability, still amazes. Nova may have exploded, or imploded, but the positive reasons for its rise will remain and begin to establish new and better approaches to learning English in Japan much sooner than we might imagine.