Yashiro Masamoto

In September 1998, about an hour before Yashiro's flight from New York to Tokyo touched down, a stranger in seat 1C turned to him and struck up a conversation. The man asked the standard small-talk questions, to which Yashiro offered polite replies: he had worked a long time in the oil business, he said, and then in banking, and was now retired and living in London. Suddenly the man exclaimed, "You must be Masamoto Yashiro! I have been looking for you everywhere!" The man excitedly introduced himself as Tim Collins, the head of Ripplewood, a U.S. investment firm that specialized in restructuring distressed companies. Ripplewood, Collins explained, had just begun to explore investing in businesses recovering from Japan's great asset crash. He was engaged in a crusade to help turn around Japan Inc. and, he said, a number of people had told him that Yashiro was the perfect person to join him on this mission.

That chance meeting was the beginning of one of the most dramatic and successful turnaround stories in Japanese corporate history. In March 2000, Collins and his backers paid $1 billion for Long Term Credit Bank, one of Japan's biggest but most troubled lenders. In the years that followed, Yashiro transformed the bank—aptly renamed Shinsei, or "Rebirth"—into one of Japan's most efficient and profitable financial institutions.

With 30 years' experience at Exxon and nine more at Citibank, Yashiro, now 76, wasn't a member of Japan's insular financial community. "I have never followed the traditional Japanese way of doing things," he says. He quickly abolished a host of workplace conventions, and clamped down on deadbeat borrowers.

Yashiro's get-tough policies made him a controversial, even despised, figure in Japan. But even his most vociferous critics could not argue with his success—and the economic revival he helped spark. Thanks to Yashiro's hard-nosed management decisions, Shinsei has been profitable since its relaunch; its performance has set the benchmark for other Japanese banks to follow. And the revolution Yashiro has fomented at Shinsei, where he is now chairman, is increasingly taking root throughout the rest of Japanese society. "Japan is changing," Yashiro says. "It has taken a long time, but it is changing."