SHAMED? RIDICULED? EMBARRASSED?
Often ridiculed and scorned: The language school industry in Japan is one that is looked down upon and often ridiculed, especially by non-teaching foreigners. But for many, it is an industry that powers their lives. When I decided to leave the expat world (in my case, software) and start my own school, everyone I knew in banking, in IT, and in the expat community all said: "Why the heck do you want to become an English teacher?" with a fair bit of scorn.
On many an occasion, I have been asked by other foreigners upon meeting them, "What do you do?" Usually I just say, "I am a teacher," and am quite often summarily dismissed from their thoughts. You can literally see it on their faces as soon as the words leave your mouth. This is the legacy that has been given to us and set for the last 30 years by poor management and uncaring executives. This is an image that leaves some teachers almost feeling embarrassed to say what they do. This must change.
The people who work and make their living in this industry have been sorely disappointed by the direction the industry owners have taken things. This industry in recent decades has been marked by a complete lack of vision and the all important concept of "caring" that should define any good service industry. It is a great industry that facilitates international trade, and increases the joy and security of traveling abroad with increased ability to communicate, and even, dare I say, helps people to realize their dreams on both sides of the teaching desk.
Yes, for many on either side of the student-teacher divide, it is their life. Beyond this, there are many industry suppliers linked to this industry that, according to Yano research, combine to form a roughly $7.7 billion industry. It is neither a small nor insignificant industry, but it is looked down upon because of its relatively poor reputation. There are bright spots in this industry, but they seem few and far between for those of us who work in this industry.
DEAN ROGERS: WHO AM I?
About me and my insights. I own and operate several small language schools under the brands Dean Morgan, SALA, and Hummingbird in Tokyo and Osaka. We have been in business since 2004 and currently have six schools with several thousand students studying at our facilities.
I have been approached by Japan Today to write a bi-monthly article about the state of the language school industry and topics relevant to working at a language school in Japan. I am excited (and in a little bit of a state of trepidation due to the nature of the current state of the industry) about this opportunity to share information that I am able to with teachers and other interested parties. Our articles will include subjects focused on teachers, running and improving your own school, and overall news relating to the language school industry from an insider view.
THE BEGINNING: OUR SCHOOL NEARLY FAILED
The successes and failures that I have had as a teacher, and now also as a school owner, and a businessman, have given me a somewhat unique insight into this industry, and to the process of starting and building a language school company. I hope that it can and will be helpful to others, especially teachers and small school owners.
There were a lot of failures in the early days of our schools. In that first year we came inches away from running out of our seed money (and thus bankruptcy). It was only through the commitment and dedication of a lot of great people (and my not taking a salary for a number of years) that got us through those tough times. We are still a young business and, for sure, not perfect, but we are one of the few companies humbly growing in an industry that has been in a steady state of decline.
Matt Kobayashi, our Namba school branch manager, has coined the term "Thrival" ( "survival" combined with "thriving") to describe those early, earnest days. Those early failures and misguided decisions were lessons hard learned, hopefully to our readers' benefit. In recent years, as we have stabilized and grown, I have endeavored to reach out, together with our management team, to be a resource and support center for other small school owners and independent teachers, providing advice, mentoring, and help wherever and whenever possible.
The articles will also be directed at casual readers interested in business, leadership, and management.
The goal of this column is to be a larger extension of our ongoing effort to reach out and share knowledge together with great organizations like ETJ, and the E-Quality association. We are also seeking to be a meaningful resource to others who have chosen to make their living as teachers or school owners. The upper management and owners of some large language school companies have kept information at arm's length from teachers and front line people for far too long. It is not difficult to find a blog or forum with teachers and small school owners looking for more information on the state of things in the industry and for business related guidance. Transparency is the key to trust and that lack of transparency has lead to often times very valid mistrust.
To that goal, the hereafter articles, resulting discussions, and forums will be shaped around the challenging topics of running a school, and to shedding light on the issues shaping today's language school industry (the largest employer of foreigners in Japan).
On a side note, I will be presenting material at each of the seven ETJ expos in 2010, put together by David Paul and ETJ, and his outstanding team around Japan again this year. I hope in the coming months to have a chance to meet more teachers, school owners, and teachers looking to be owners.
STATE OF THE LANGUAGE SCHOOL INDUSTRY
Facts and Figures:
Population of Japan: 127,076,183
Percentage of the Japanese population that has had some exposure to the English language: Best estimate, in excess of 85%, likely closer to 95%, if not in fact more
Foreign Residents: 2,500,000 (approximately 2% of the population)
English Natives: Approximately 1–1.5% of the 2% English Teachers: Best guess, tens of thousands
A small group to be sure, but with a wide-reaching and influential voice. So, what does the future hold for them and the industry they work in?
TOUGH TIMES FOR EIKAIWA
Difficult straits: The language school industry in Japan is without question in difficult straits at the moment, most clearly exemplified by the well publicized bankruptcy of NOVA two years ago, and the ongoing saga of its ousted CEO. The Ministry of Economy, Trade and Industry (METI) recently published data that showed over the last three years a roughly 50% decrease in attendance, and a dramatic drop off in sales (link to data download given here). Even if this information is not 100% accurate, the obvious fact is that things have been in decline. Yano research data has also shown a similar drop off, but not as severe as the METI data. The Yano Research institute data is a bit broader, and they state that in 2008 sales were 767.2 billion yen, down by about 45 billion yen from 2007.
OLD NOVA IS NOT ALONE
The Pink Bunny is not the only school to have gone bankrupt in recent times. Over the last few years, there have been Grandom, Britannica, and more recently during my tenure as a school owner, Lado, NCB and others.
The bankruptcies left many students without refunds on their lessons, and teachers unpaid. In the years preceding the end of the old NOVA, there was a steady flow of these schools going bankrupt. I and our team have closely watched the flow of schools coming and going. For us and other small school owners, it has at times made for rough sailing, due to the negative publicity and thus, insecurity of students, caused by these failures.
EMOTIONAL TIMES: REAL PEOPLE IMPACTED
My first experience with watching a school go bankrupt was in 2005. I watched the local (in Shinjuku) bankruptcy of NCB (we interviewed and hired a few teachers from NCB, so I heard a fair number of first hand stories), a school chain with over 5,000 students. 2006 saw the bankruptcy of Ecole de Paris, a three-school chain in Tokyo with 500-1,000 active students at the time of the bankruptcy.
I personally attended the meeting put on by the French CEO at the time, as our schools teach both English and French. It was a pretty morbid and vicious affair. There were nearly 500 students and teachers, sullen and justifiably angry, who attended that final meeting at the local city office. To be honest, it left a strong impression on me that stays with me even to this day.
On July 23, 2007, ABC Language School based in Osaka, with four locations and nearly 1,000 students, went bankrupt. It had outstanding liabilities, according to covering news services, of about 100,000,000 yen, about half of which was lost student tuition, and half of which was teachers' unpaid salaries.
This was followed by LADO (again we hired a number of their staff during this time) which had four locations, several hundred employees, and 5,000-plus students enrolled, and reportedly hundreds of millions of yen in liabilities. Apart from ABC, all of these schools were well established, and many had been in business for over 20 years.
Back to the present, the reports of other schools going through unmistakably lean times continue. As a school owner, I can fully attest that the market has slowed down from a few years gone by, and that patterns continue to repeat themselves in a broken unhealthy cycle of decline.
PAINFUL FOR STAFF AND STUDENTS
The subject of bankrupt schools is obviously an emotional and personal one for many, especially those who have been personally impacted by the bankruptcies of the old NOVA and other schools. With each bankruptcy, the stories of lost money in one form or another, as a teacher, as a student, or as a vendor to those schools, continue to be heard.
This regular commentary on Japan Today allows us for the first time to share relevant insight on the industry, and provide useful information to teachers and school owners.
In the first three articles, I should like to discuss the business models that currently exist and the way in which the market itself developed. This will provide context in order better to understand the current state of the language school industry as it finds itself today.
When I meet teachers at the English expos put on by ETJ and by others, I am regularly asked about this. I hope this series will provide meaningful information that will help put into perspective the articles relating to our industry. In this first four-part focus series, I shall identify and elaborate on the three most impactive parts of the industry that have led to the current state of matters, separate from the GFC (Global Financial Crisis).
Article #2 The Financial Business Model
Article #3 Package Sales System
Article #4 Management of Foreigners
Beyond this initial focus, the series will turn to other aspects of the language industry in Japan.
I look forward to this opportunity to discuss real and meaningful topics and ongoing issues in the industry, from a business point of view.
The Japan Today commentary system allows for responses and input from readers and I ask and encourage you all to contribute and add to the quality of this series with your meaningful comments and insight. I will endeavor to respond to responsible questions and commentary placed here, and will welcome other relevant topics suggested by our readers for future articles.© Japan Today