June 29, 2012

Rudlin Consulting provides expert analysis and consulting to people working in or with Japanese companies in Europe.

We focus particularly on how Japanese multinationals communicate outside Japan—internally and externally—their brand, values and mission.

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April 17, 2014

I was very sorry to hear of the death of Wally Olins on Monday.  Although he was 83, and had recently undergone an operation, it seemed he was recovering well, and I was looking forward to his postponed book launch for Brand New: The Shape of Brands to Come and maybe catching up with him before then as he had said he had wanted to chat further with me about Japan – which was typical of Wally, that despite his immense expertise and experience, he was always curious to know more and very generous and open to relative newcomers to his field.

We had worked together both when I was at Fujitsu for their new brand promise “shaping tomorrow with you” and after that with his company Saffron on another corporate vision project for a Japanese owned subsidiary.  As Ian Stephens, principal of Saffron, has said in their statement about his death, Wally was infectiously charming but also famously impatient – he sometimes sought reassurance from me that his straight talking style was not going to upset Japanese executives.  I understand his impatience now, as he did seem, despite his four score years and more, like a man who still had a lot more he wanted to give and achieve.  The best compliment we can pay him therefore is to buy his new book, and keep the flag flying for his work and ideas.

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April 3, 2014

Fast Retailing, holding company for Uniqlo, Princesse tam.tam (lingerie), Comptoir des Cotonniers, Helmut Lang and other brands probably ought to be in our Top 30 Japanese employers ranking as Princesse tam.tam and Comptoir des Cotonniers have over 2000 employees between them. Both were originally French companies, so presumably the majority of those employees are in Europe – and adding on Helmut Lang and Theory (also both European origin) and Uniqlo’s stores in Europe would presumably bring the total to back over 2000.

However, as a recent Nikkei Business article and interview with Tadashi Yanai, founder of Fast Retailing, points out, Fast Retailing still has a long way to go to catch up with H&M, its avowed target.  Although H&M is Swedish in origin, it has more outlets in Germany (418) and the UK (245) than in Sweden (177) – a factor of population size, of course, but Uniqlo, by comparison in its home region of Asia is overwhelmingly centred on Japan (849 shops versus 39 for H&M) but neck and neck in China (H&M having 205 shops to Uniqlo’s 260).  There are 10 Uniqlo stores in the UK, 4 in Russia and 4 in France.

Yanai is determined that Fast Retailing will become truly global however “by being strongly local”.  He expects that in 20 years time, most of the FR directors will be non-Japanese and wants half the staff in Japan HQ to be non-Japanese. Not only is he ensuring that non-Japanese staff are brought up through the ranks of overseas operations, but also that Japanese who work overseas “become local”  – “I tell those who go to work in New York to become New Yorkers”, he says.  Expatriates from headquarters such as the UK CEO Takao Kuwahara are meant to “transmit my DNA on my behalf”.  Recently, it’s not so much that Japanese expatriates teach local staff, rather those local staff have now become able to teach new hires themselves.  It’s “mass production” of overseas born Uniqlo people, comments Nikkei Business.

Certainly comments from employees on Glassdoor, the jobs and career site, do make reference to  a “cult-like” atmosphere and Fast Retailing has a reputation in Japan of riding its employees hard, even by Japanese standards.  However his recent announcement that the 16,000 contract staff in Japan would be offered permanent status is seen as revolutionary enough to merit being the front cover story of last week’s Nikkei Business, accompanied by a large photo of Yanai himself, of course.

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March 27, 2014

honda_swindonHonda announced on 25th March 2014 that it would be closing car plant 2 in its Swindon UK factory with a loss of 340 permanent jobs, due to slower than expected sales growth in Europe.  This follows on from over 500 redundancies last year, and looks to bring Honda’s total employee level even further below that of Toyota and Nissan in Europe.

Honda’s ranking in the top 30 Japanese companies in Europe (table below is revised from an earlier posting) remains unchanged, but this latest round may mean that Honda loses the #14 spot to Takeda (a new entrant).

Takeda, Japan’s biggest pharmaceutical company, qualifies for the top 30 thanks to its acquisition of Nycomed in 2011.  The other new entrant (thank you to our friends at Lucite for pointing this out) is Mitsubishi Chemical Holding, the parent of Mitsubishi Chemical, Mitsubishi Rayon, Mitsubishi Tanabe Pharma and Mitsubishi Plastics.

The restructuring at Sony in the past year, globally and in Europe has also had an impact on its ranking, falling from #4 to #5.

One further addition to our statistics, by request from a former colleague at Fujitsu, are estimates of  what proportion of employees are in the Japan organisation.  This is indeed interesting, as it further highlights how global the companies are, and how over or under the average size they are in Europe.

We had already compiled some of this, but such estimates have been made a lot more difficult by the increase in holding company structures in Japan.  Holding companies had been banned in Japan for 50 years after the war, as the Occupation government tried to break up the “zaibatsu” groupings it felt had supported the military-fascistic regime in Japan.

Company groupings did nonetheless re-emerge, and the usual way their financial results and employee numbers were reported was to give figures for consolidated (renketsu, including group companies domestic and overseas) and parent company (tantai).  With individual companies, tantai numbers were a fairly good proxy for how many people were employed in Japan.  However, the holding company structure often means that 99% of the employees globally are in consolidated companies, and the tantai/parent only has a hundred or so staff.

So for example, Fujifilm Holdings covers both Fujifilm and Fuji Xerox, and 60 or so other companies as Fujifilm has diversified significantly from camera film making.  The 18,500 estimate for employees in Japan represents the sum of Fujifilm and Fuji Xerox employees in Japan, so should be seen as the “at least” minimum figure for how many employees actually are in Japan.

So with those further caveats, here’s the new ranking.  Thanks to those who helped, and please keep the suggestions rolling in!:

 

Rank Company Total employees (consolidated) % in Japan % in Europe or EMEA Employees in Europe or EMEA
1 Fujitsu               173,000 62% 18%               31,000
2 Toyota               333,498 21% 6%               20,051
3 Ricoh               107,431 37% 17%               17,850
4 Canon                197,000 36% 8%               16,000
5 Sony               146,600 38% 10%               14,953
6 Nissan                160,530 15% 9%               14,500
7 Asahi Glass                 54,000 12% 26%               14,200
8 Denso               132,276 29% 10%               13,000
9 NSG                 29,300 16% 42%               12,200
10 Toshiba               206,087 55% 6%               11,562
11 Sumitomo Electric Group               206,323 2% 6%               11,500
12 Hitachi               323,000 66% 4%               11,500
13 Panasonic               293,742 40% 4%               10,500
14 Honda               180,000 13% 4%                 8,000
15 Takeda                 30,481 22% 25%                 7,620
16 NTT Data                 61,000 18% 10%                 6,000
17 NYK                  53,192 16% 10%                 5,222
18 Fujifilm Holdings                 80,322 23% 6%                 5,000
19 Olympus                 32,937 9% 14%                 4,500
19 Mitsubishi Chemical Holding                 55,000 78% 8%                 4,500
21 Astellas                 17,454 47% 25%                 4,300
22 Nomura                 27,956 57% 13%                 3,618
23 Sharp                  50,644 48% 5%                 2,674
24 Daiichi Sankyo                 32,000 29% 8%                 2,500
25 Kao                 33,350 66% 7%                 2,400
26 Seiko Epson 73,639 25% 3%                 2,153
26 Omron                 35,411 32% 6%                 2,000
27 NEC               102,375 79% 2%                 1,800
29 Horiba                   5,787 40% 29%                 1,700
30 Bank of Tokyo-Mitsubishi UFJ                 36,499 78% 4%                 1,500
TOTAL           3,270,834 37% 11%             264,303

 

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March 20, 2014

I mentioned previously how so many of the Japanese companies I met with during my last trip to Japan in December 2013 said that the only way they could see to make the radical changes needed to globalize successfully would be to move the corporate headquarters out of Japan.  Of course this would be way too radical for risk averse Japanese companies to try to do in one swoop, however many have been moving the headquarters of some of their business lines or functions overseas, for example to Singapore, over the past few years.

So Hitachi’s announcement that it will move its rail business to the UK is not totally unprecedented, but exciting nonetheless for those of us who think the “transnational” model of running multinationals is the way to move forwards.  Hitachi had already acquired The Railway Engineering Company (and Horizon Nuclear Power) in the UK in recent years, with the result that around 11,500 employees are employed by Hitachi and its subsidiaries in Europe.

This puts it in the top 20 of Japanese employers in Europe, and if it really does add another 1,500 employees to its rail business in Europe as forecast, this will propel them into the top 10.

My current estimation (with many caveats) of the top 30 Japanese companies in Europe in terms of employee numbers is as below.  Many of them have reached this size through large scale acquisitions (Fujitsu, Ricoh, Asahi Glass, NSG).  They represent around 250,000 (minus Africa/Middle East employees) of the 437,000 or so employees JETRO estimates are employed by Japanese companies in Europe.  (This list has been subsequently revised – please see later posting)

 

 

Rank Company Total employees (consolidated) % in Europe or EMEA Employees in Europe or EMEA
1 Fujitsu               173,000 18%               31,000
2 Toyota               325,905 6%               17,941
3 Ricoh               107,431 17%               17,850
4 Sony               162,700 10%               16,100
5 Canon                197,000 8%               16,000
6 Nissan                157,365 9%               14,500
7 Asahi Glass                 50,000 28%               14,200
8 Denso               130,000 10%               13,000
9 NSG                 29,500 42%               12,500
10 Toshiba               210,000 6%               11,598
11 Sumitomo Electric Industries               206,323 6%               11,538
12 Hitachi               323,000 4%               11,500
13 Panasonic               330,767 3%               10,500
14 Honda               190,000 5%               10,000
15 NTT Data                 61,000 11%                 6,800
16 Fujifilm                 81,691 6%                 5,000
17 NYK                  55,000 9%                 5,000
18 Olympus                 32,937 14%                 4,500
19 Astellas                 17,454 25%                 4,300
20 Nomura                 27,956 13%                 3,618
21 Sharp                  56,756 5%                 2,674
22 Daiichi Sankyo                 32,000 8%                 2,500
23 Kao                 34,069 7%                 2,449
24 Omron                 35,411 6%                 2,000
25 NEC               102,375 2%                 1,800
26 Seiko Epson 73,639 2%                 1,727
27 Horiba                   5,530 31%                 1,700
28 Bank of Tokyo-Mitsubishi UFJ                 36,499 4%                 1,500
29 Terumo                 19,261 6%                 1,125
30 Murata                 36,967 3%                 1,093
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March 13, 2014

I alway find the rankings published each year by various organisations in Japan of which companies are most favoured by university graduates fascinating reading, giving insights into how the economy and societal trends have impacted the reputation of Japan’s blue chips.

The Nikkei Business magazine has focused on the rankings produced by Rakuten’s social networking site for graduates, the biggest of its type in Japan, this year.

Travel companies seem to have done particularly well this year overall – All Nippon Airways is top of the rankings (up from #2) Japan Travel Bureau at #3 (up from 8) and JAL resurgent after its successful restructuring in at #4 from no rank last year.  Maybe this is due to the high profile activities of these companies in trying to get more tourists to Japan, especially in light of the 2020 Tokyo Olympics.

Advertising agencies are also back in favour – Number 2 is Dentsu, the mammoth advertising agency (up from #3), Hakuhodo is at #6 up from #14 and ADK has risen from 112 to 78.

Banks have lost ground -  Bank of Tokyo-Mitsubishi UFJ has dropped to #5 from #1, Sumitomo Mitsui Banking Corp slipped from #6 to #9 and Mizuho is down to #13 from #9 but insurance companies seem to be popular again – Sompo Japan is up to #65 from 128 and Sumitomo Life also rising from 151 to 68.

Other big fallers are Ajinomoto (down to #23 from #11), Mitsubishi Corporation (down to #26 from #13), P&G Japan (down from 10 to #39, whereas domestic rival Kao has improved from #23 to #11) and Canon (down at 94 from 54, presumably following some disappointing financial results in 2013), Lotte (down to 89 from 56), NTT Docomo (86 down from 52).

Graduates from the top ten universities heavily favoured trading companies (Mitsui, Mitsubishi Corp, Itochu, Marubeni and Sumitomo Corp all in their top 10) and advertising agencies (Dentsu and Hakuhodo)

Reasons for favouring certain companies:

I could become President, have authority to make decisions – trading companies ranked highest

I can become a specialist in a certain field and lead projects – Toyota, Kawasaki Heavy Industries

My seniors recommended it – Tokio Marine Insurance, Yokohama Bank, Bank of Tokyo Mitsubishi UFJ

My parents/teachers recommended it – All Nippon Airways, Japan Rail, Mitsubishi Corp, Bank of Tokyo Mitsubishi UFJ

 

 

 

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March 10, 2014

takotsuboOnly 17% of CEOs in Japan have worked outside Japan, according to a survey of 2500 listed global companies in 2012 by Booz & Co.  This compares to the overall global average of 45%, and is barely higher than China’s 15%.  25% of Japan’s CEOs have worked in another company (and I bet many of them are related subsidiaries or joint ventures of the Japan parent) whereas 86% of North American and 88% of Western European CEOs have worked elsewhere.

The Nikkei Business magazine quotes this survey, in an article (Japanese, subscription) speculating as to whether a new CEO can really help Japanese companies compete globally.  The positive side to hiring from within, it points out, is that it encourages a competitive but also united spirit within the company, but the negative side is that it leads to a reluctance to make risky decisions such as undertaking M&As or restructuring unprofitable businesses.

Booz & Co also comments that “it will be difficult for a company headed by a senior executive who has not had to make tough decisions about subsidiaries and overseas operations to compete globally”.  There are some signs that Japanese companies are aware of this judging by the appointments being announced for this April – for example Konica Minolta’s next President headed a US acquisition.

This “takotsubo”  (literally “octopus pot” – a way of catching octopus by trapping it in a pot) management selection style means that Japanese companies are also not very adept at bringing in outside management experience.  Shiseido has just hired the former chairman of Coca Cola Japan as its President and LIXIL has hired executives from Misumi and Calbee, but these are rare examples.

Similarly, most instances of hiring foreign executives (Sony, NSG) have not gone well.  Only 1% of CEOs appointed in Japan over 2009-2012 were “foreign” compared to 17% in North America and 30% in Western Europe.  As noted previously, it is not surprising there is much doubt as to whether Takeda’s new President, Christophe Weber, from GSK, will be able to buck the trend.

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March 3, 2014

I’m one of the interviewees at the Japan Intercultural Consulting “Succeeding in a Japanese Company Telesummit” – a series of interviews broadcast over the internet over March 4th-20th.

It’s free to register and listen during that period, and downloads can also be bought as a package later,

More details here.

My topic is “Profitable Relationship Building with External and Internal Japanese  Customers” and the other topics are:

    • Working with Your Japanese Boss
    • Understanding and Influencing Decision Makers in Your Japanese Company
    • Becoming Part of the Team in Your Japanese Workplace
    • Relationship Building with Japanese — in Person and From Afar
    • Skillfully Interfacing with the Parent Company in Japan
    • The Influence of Cultural Differences on Business Processes and How to Improve Your Performance
    • How to Keep Japanese From Falling Asleep in Your Presentation
    • How to Give and Receive Feedback with Japanese
    • How to Avoid Meeting Madness in Your Japanese Company
    • Same Words, Different Meanings — Effective Communication with Japanese
    • Getting on the Same Page in Your Japanese Company
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Diamond magazine has countered Nikkei Business’s report on the “Great Places to Work” survey with its own report, in conjunction with Vorkers, a Japanese site similar to Glassdoor, which collects employee’s ratings (48,000 of them so far) on their employers in areas such as motivation, remuneration, corporate culture, career development and work life balance.

Despite the different methodology, the surveys share the same conclusion, that foreign owned firms in Japan seem to have happier employees than Japan-owned firms.  Magazine publisher Recruit Marketing Partners is the top rated company, followed by Google Japan, then the US measurement instrument company Agilent is at #3 and US automated test equipment company Japan National Instruments is at #4.

Diamond adds some interesting analysis of its own, grouping the top ranking companies into several categories. Firstly the “Recruit” group, Recruit being a major Japanese recruitment company which has diversified into all sorts of areas including publishing.

Secondly the “Carnivore group” – up or out type companies such as Goldman Sachs, Boston Consulting Group, McKinsey, GE Healthcare and P&G.

Then comes the “go-go” group – rapidly expanding companies such as CyberAgent and Softbank.

The herbivore group (dull but “feel at home”) include Agilent, Japan National Instruments and Boehringer Ingelheim.

Finally, the “old school” but “unexpectedly global” group which include Komatsu, Idemitsu, Chiyoda, Teijin and Mitsui OSK.

Actually I had fun at lunch last week with one Japanese executive from Mitsui OSK (shipping company) and Mitsui Shipbuilding – teasing them as to how close the Mitsui keiretsu relationship was.  They were adamant they were far less in each other’s pockets than their Mitsubishi equivalents.  The Mitsui group is definitely “old school” in ethos, but has been global for over a century now.

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