The Collapse of a Giant

In about 1 hour it will be 12:01 am in Tokyo; the morning of October 25th, the day that Nova instructors have been promised their pay. Do I expect it? Of course not!

Rumors had been surrounding Nova for the entire time that I worked there. I began in a period of ‘contraction’. The company had expanded too rapidly and was scaling back… but that didn’t mean anything. Still, people hypothesized, conjectured and gossiped about Nova’s viability but every discussion ended with these claims:
*Nova has enough assests to weather any storm
*Nova has such a huge market share that it couldn’t collapse
*Nothing has happened yet…

I’ve talked with some friends still *teaching* in Tokyo, and most of them already ceased going to work. Some decided to call in sick, some just quit outright. One friend gave his business card to the students at his branch in hopes of acquiring some private students. I have other friends who are trying to get home but they can’t because flights are booked solid. Any way you look at it it’s over. Nova is being evicted left and right. Teachers are quitting en masse forcing schools to close. Whether or not bankruptcy is declared, whether or not the faxes promising paychecks keep coming, whether or not a small minority of teachers continue to go to work, Nova is over. It’s over.

The number of mis-steps and management faux-pas that it took to get to this point is staggering. Here are some of the latest stories:

• “A do-or-die situation” - students are confused, schools can’t operate because teachers have quit, and Osaka canceled its ALT contract with Nova.
• the government is finally making Sahashi explain himself. Whether or not this means anything is anyone’s guess.
• “Sahashi has all but signed Nova’s death warrant…” something about stocks…
• Shinjuku Honko closed! A Yakuza connection? And other bad news
• Sahashi readily admits that Nova lost its “cash flow mountain.”
• There are some really shady stock deals being made
• “Nova in Flames”

My question: where was the effort to retain students?? Contract cancellations are a huge part of this mess. Nova might have been able to survive with a significantly reduced cash flow but the loss of contracts put too much stress on the company. So why didn’t Sahashi do anything to keep students from leaving? How about free voice tickets? Bringing a friend to Nova for free? Having a month of free Level-Up lessons? Free special Ginganet lessons? Or heck, a free keitai charm? All these things should normally cost students extra money but in a situation like this is it not better to freeze profit but keep students? Then at least you’re not losing millions of yen in canceled contracts. Rather, Sahashi chose to lose money, lose students, essentially lose everything - and take all his employees down with him.

*all the above links are from Let’s Japan.org. Here are stories from the Japanese media:

• Cash Strapped Nova Fails to Honor Contract to Public Schools After Teacher Exodus - the Mainichi Daily News
• Labor Standard Watchdogs to Question Nova President Sahashi - Japan Today
• Nova Gets the Web Talking - the Japan Times