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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At the beginning of our training sessions with Japanese expatriate managers, I describe to them the positives and challenges Europeans say they face when working in Japanese companies. If I have already done similar sessions with Europeans in that company, then I also highlight those aspects which are specific to the company or were give a particular emphasis.
You can probably guess what the common positives and challenges are. The European employees usually say they find their Japanese colleagues are polite/friendly/calm, take a long-term view and have a high degree of commitment to their jobs and the company. The challenges that they find are communication problems centering on indirect/direct communication styles and attitudes to conflict, and also the long-winded, nontransparent decision making processes.
It is often said that Japanese people are more than usually curious about how they are perceived by other cultures. Certainly my list of common positives and negatives arouses great interest among Japanese participants. However, when I try to turn it into a debate about the company’s culture – asking questions like, “Do you think your company is more or less nemawashi (consensus based decision making) oriented than other Japanese companies in your industry?” – there is hesitation, a few tentative comments, and then thoughtful silence. It is almost as if such questions had never been considered before.
As lifetime employment has been so prevalent in these large companies, and still is for the majority of employees, the opportunity to compare the company you chose to join at the age of 22 with another company only arises once – during the graduate recruitment process. Because this a career-long commitment, both the graduates and the companies put a great deal of effort into the process of finding out whether there is a good fit between the candidate and the company culture.
But the actual nuts and bolts of working in a company – how decisions are made, attitudes to process, risk, hierarchy and so on – are not made so explicit, because the candidates have never worked in a company before and have no way of identifying these characteristics. If you are going to stay at the company for the rest of your career, then you just accept that “this is the way things are done around here.”
Now that more Japanese people are changing employers, and mergers between companies are increasing, it is surely time to be more aware of these differences, so that adjustments can be made by employees and companies.
Some insights will of course come from the job hoppers themselves, but it might also be time for Japanese companies to lose their allergy to using outside consultants. As a consultant myself, I would say this, but consultants who have worked with a range of companies probably have the best overall view of how Japanese companies differ from each other.
As the British writer Rudyard Kipling famously put it, regarding English insularity, “And what should they know of England, who only England know?”
This article by Pernille Rudlin originally appeared in the August 17th 2009 edition of The Nikkei Weekly
I’m a big fan of Japanese monozukuri (“the art of making things ie manufacturing) and said so in a letter published in the Financial Times recently. It attracts criticism for causing Japan’s economy to be too reliant on exports, and there are worries about how an aging population can supply enough workers to man the shopfloor. But I really think Japan should “stick to its guns” in this regard.
Here in the UK we are suffering the effects of having moved too far away from manufacturing. We’ve ended up with a society where everyone thinks they should be highly paid knowledge workers or celebrities. We have failed to give enough status and dignity to making things.
A diverse society like the UK needs a full range of jobs to stay healthy. I am not saying this out of a patronising assumption that manufacturing jobs are necessary for the unskilled and uneducated in society and that such people are somehow not fit for anything else. There seems to be a fundamental human need to see tangible results from our labours.
Besides, a career in manufacturing requires far more than dexterous fingers these days – thanks to Japanese techniques such as just-in-time delivery, visualisation, root cause analysis, multi-skilling and so on, anyone wanting to succeed in manufacturing has to be computer literate, have an understanding of logistics and be capable of rigorous problem solving.
It is noticeable in this recession that many manufacturers have struck deals with their workers on pay cuts or working time reductions. rather than resorting to mass redundancies. There is a high cost to training a fresh set of employees when the economy picks up, so it makes more sense to retain the current workforce.
In fact it is knowledge work that has proved to be more vulnerable than expected. I know of many bankers, accountants and lawyers who have been made redundant, thanks to our British economy based on trading of over-hyped assets such as houses and fancy financial instruments. Ironically, many of them are now turning to “manual” work; cookery, gardening, farming, starting a vineyard and so on.
One problem I have noticed with monozukuri, however, is the assumption that making lovely things is somehow enough. At a seminar I facilitated recently, several senior salespeople, in electronics, sanitary ware and banking, all noted that their Japanese companies did not seem to have any understanding of the basics of marketing, particularly in the current highly competitive climate. “My bank doesn’t even have a pitch book!” the banker told me. I pretended to know what he meant, and later found out that this is a fundamental marketing tool for any Western investment bank – containing all the profiles and experience of the proposed team.
In the past, Japanese companies could rely upon relationships and their reputation for quality to sell their products and services. Now they need to think long and hard about differentiation and value added. Why do we make this product and not that one? What makes our product or service better or different? Should we be making this product at all? When they have answered these questions, their sales people can sell more convincingly, and the Japanese economy can pick up again.
This article originally appeared in the June 8th 2009 edition of the Nikkei Weekly
Maiko Tajima, formerly of KPMG, now working for the World Food Programme, explains in Diamond Online why the rest of the world does not understand Japan’s so-called “black” companies. As she points out, if a native English speaker heard “black company” they would probably think “black enterprise” was meant, ie a company run by someone of what in the UK would now be called “black or minority ethnic” origin. Apparently there’s also a series of novels written by an American author called The Black Company.
Anyway, the closest translation would probably be “sweatshop” but most in the West would think of this as referring to factories, or workshops, in the US or Europe in the 19th and 20th centuries, and more recently in developing countries, and find it hard to believe Tajima when she explains that such conditions are occurring in a developed country such as Japan, in the 21st century. A recent survey of its employees by Sukiya, a late night restaurant labelled a “Black Company” revealed comment such as “regardless of night or day, put all your life into your work, and if you survive, then you get to give the orders next time” and “work until your nose bleeds and you faint. Then you won’t be able to say anything is impossible any more”.
She explains how this occurs by contrasting her experiences as a member of the boat club in Oxford and also of a fencing club in a Japanese university. In the Japanese university club, the concept of “sempai” (seniors) was strongly adhered to – she calls it a “caste system”. You could not eat before your coach and your seniors started eating. Practice was to see how much you could endure. If they felt you lacked “konjo” (guts, willpower), it was the collective responsibility of the rest of the club too, so you all had to sprint around the sports hall. Tajima did get results in her matches, but she is not sure to this day if the “guts” she had at that time has really helped her in her life since.
As a member of an Oxford University Boat Club, there were of course the early morning, 5:30am starts on the river, that had to be endured over several months, but the reason behind this was “doing what we had to, to win” – starting with the desired outcome and working backwards.
The team was multicultural – American, British, Indian, Chinese and Taijma herself, and teamwork was heavily emphasised, but only in terms of getting the team to be a winner – there were no bonds outside the boat club. You were also allowed to make suggestions as to what should be done. “It was not what you could or could not endure, just what was the most rational course of action in order to win.”
As she points out, in European countries such as the Netherlands, there is the right to leave work 2 hours early, if the previous day you worked two hours overtime, and plenty of maternity and paternity leave. The focus is on trying to have a “good life” both in work and home life, as part of government policy.
She thinks that the roots of the 21st century Japanese “black companies” lie in the kinds of behaviours described by Ikujiro Nonaka in his book “The Essence of Failure” – an organisational study of the Japanese armed forces in the Second World War – emphasising human relationships over rationality, and to strive for spiritual virtue, no matter what had to be endured.
Japanese Prime Minister Abe’s appointment of 5 women to his cabinet yesterday, over the heads of more senior male colleagues has been presented in the Western newspapers as an attempt to appeal to women voters, and also to show leadership over his commitment to improve career opportunities for Japanese women.
Diamond, the Japanese business magazine, has an interview today with Naohiro Yashiro (in Japanese), Visiting Professor at the International Christian University and formerly of Japan’s Economic Planning Agency, where he explains why despite Abe’s pressure, the proportion of women in Japanese management positions is stuck around 11%, compared to 43.7% in the US, 39.4% in France and 47.6% in the Philippines.
Even fewer women managers in large companies
Yashiro first of all highlights the fact that larger Japanese companies (over 5000 employees) have even fewer women in management (4%) than smaller companies of 10-29 employees, where 16.5% of managers are female. According to a survey by the Ministry of Welfare last year, this is not due to discrimination in larger companies, rather that there is a lack of women candidates in the management track.
Change to the labour market needed before mindsets can change
But as Yashiro points out, this theory is based on traditional Japanese employment practices, of internal promotion. If only internal promotion is relied on, then it will be very difficult for firms to reach Abe’s target of 30% female managers in 6 years. Japanese companies will have to hire from outside the firm. This would link to hiring all kinds of people, regardless of gender, age or nationality. The government has a role to play in changing the labour market – compensation for dismissal and rewards based on time put in rather than results all covertly protect male dominance, says Yashiro. “It’s argued that male managers need to change their mindset, but really, until the number of women managers increases, mindsets will not change.”
3 root causes of why there are so few women managers
1. Seniority based promotion, assuming lifetime employment with the same company
2. Assumption that there is a full time housewife supporting the long hours that the salaryman works
3. Tax and welfare system favourable to full time housewives
It’s the male working pattern that has to change, more than the female.
If it became the norm to switch companies, then there would be less of a gap between male and female managers, because the length of time with one company would no long be a criterion. Definitions of management also have to change – so that not everyone expects to become a manager. The management role should become tougher, and only for those who really want to be managers. It’s not just about helping women, says Yashiro, but about making the management of people more efficient in general, improving profitability and corporate governance.
Kenji Momota, a former racing driver who now writes on the car industry for Diamond and other business publications, believes that Japan’s car industry is facing defeat because of the lack of a car culture in Japan.
He muses on how the only proper car museum in Japan is actually privately owned (founded by the owner of a concrete product sales company) and several hours away from Tokyo, in Ishikawa Prefecture. There are several corporate car museums (Toyota’s in Aichi prefecture, Honda’s in Tochigi, Mazda’s in Hiroshima, Suzuki in Shizuoka and Daihatsu in Osaka) and there was a state museum of transport, founded in 1936, but since 2007 it has focused on the rail industry.
The lack of a national car culture has its roots in the beginnings of the industry after the war, when joining the car industry was seen as a high risk, equivalent to joining a start up venture, by top graduates. Many employees were transferred over from the zaibatsus’ heavy machinery and shipbuilding companies. These employees felt they really didn’t really understand cars. An inferiority complex persisted until a couple of decades or so ago, with even Toyota calling itself “a country bumpkin company” or Honda saying “a small company like ours”.
Then along came the post war baby boom generation, to whom car ownership was the ultimate dream. The older generation were happy to defer to them, believing it was good to have cars made by those who loved cars. The baby boomers made cars for their own generation, during the economic boom time, and that was fine until recently, when the baby boomers have started to retire, and are buying their final cars.
The younger generations are not so fixated by car ownership, with the improvements in public transport, those living in cities can be car free without too much inconvenience. Running a car company has become more about management ability, and understanding finance. Apparently many executives that Momota has spoken to have confessed “we don’t really know what to do next” in the face of a major structural change in the motor industry, with US IT companies such as Google entering the industry via telematics.
Momota recommends constructing a culture from a zero base, as a new industry – which will be a service industry. He points to Mercedes’ “mercedes me” as an example of the future. However Mercedes have been able to do this because they have such a strong brand in the first place. He worries that if Japanese car companies team up with US IT companies, their brand will be lost in a bland global one size fits all. “Japanese car manufactures must review the past and present of their industry, and quickly, in earnest, take the first step into the future”. Judging by a conversation I had recently with a US brand consultancy, at least one Japanese car company is looking to take such a step.
Japan’s annual shareholders’ meeting season at the end of June went relatively smoothly for most companies, as their results had improved, in part due to the impact of a cheaper yen. Takeda was one of the exceptions, however, with the new President, Christophe Weber, facing protests from a 100 or so shareholders, more than half of whom were ex-Takeda employees.
Their 7 point letter claimed that the acquisition of Nycomed and Millennium Pharmaceuticals were failures, that the way Takeda was globalizing and the low morale of scientists in Japan called into question management effectiveness, that the way Weber was appointed as Hasegawa’s successor was questionable, that the focus on the executive management committee, largely peopled by “foreigners” was causing the board meetings to become a mere formality, that it was not clear why high dividends should be paid out when the financials were worsening, and finally that responsibility was not clear for the fine of $6bn in the US for concealing the risks for Actos, a diabetes drug.
Diamond Online analyses why Takeda is being criticised “from within”. Takeda was at a high point in 2006, but in decline since then, as four of its blockbuster drugs came off patent in the US. The search for new hit drugs led down the path of M&A. Takeda was the dominant Osaka pharmaceutical company, squaring up against Sankyo the Tokyo-based pharmaceutical giant. Behind the scenes, however, there were merger talks between the two. In the end Sankyo chose to team up with Daiichi.
So Takeda embarked on overseas acquisitions – Denmark’s Novo Nordisk and then Millennium in the USA in 2008, and finaly Nycomed in 2011. These acquisitions required substantial post merger restructuring, however there was noone capable of this in Takeda. The management layer below Hasegawa was “thin” ( a problem common to many Japanese companies, who cut back hiring of that cohort during the first oil shock). Hasegawa appeared isolated, and reliant on foreign executives and Japanese executives who had worked in foreign companies (in other words, not including the indigenous Japanese within Takeda)
Weber’s recent interview in the Japan Times, in which he emphasises that Takeda will remain “Japanese” is an attempt to reassure the Takeda founding family and domestic Japanese management, but whether an interview in English in Japan Times (an English language daily) is sufficient is doubtful. A charm offensive on the Nikkei group of publications might be advisable.
Takeda is #15 in our Top 30 Japanese companies in Europe, with around 7,600 employees in Europe.
When asked about whether Nomura’s focus on Asia was a turning away from the direction that led them to acquiring Lehman Brothers in 2008, the CEO of Nomura Holdings, Koji Nagai, responded “It’s not a reverse, just a rethink that happened two years ago. Before, we thought we wanted to be global, therefore we should do global business. Now we think about the customers’ needs first, and where we are competitive and can add value, which is why focusing on Asia makes sense.”
However he is very cautious about China, saying it resembles Japan around the time of the economic bubble bursting in 1990. Abenomics is providing a tailwind for Nomura at the moment, but as the Nikkei journalist comments, Nagai clearly still feels a strong sense of make or break, for Japan and for Nomura.
Nomura is #20 in our Top 30 Japanese companies in Europe, with around 3600 employees.
I read in the Nikkei recently that Panasonic, Mitsubishi Estate and Rakuten are planning to make use of social networking site LinkedIn for recruitment outside Japan, including Europe. LinkedIn is the world’s largest professional networking site, based in California, with more than 270 million users worldwide, so it certainly represents an effective way to identify and attract new recruits.
I have been a member for more than 10 years, not to find a job, but to find and keep track of my European contacts in Japanese companies. It has been noticeable, however, that Japanese employees and Japanese companies in general are not very active on LinkedIn, even though LinkedIn launched a Japanese version and set up an office in Tokyo in 2011.
I assume this is primarily because LinkedIn is used for mid-career hiring and job seeking, which is still not a popular activity in Japan. Indeed, many Europeans dislike to display their skills and experience publicly, and signal thereby that they may be “for hire”. Based on my own analysis, the British and Dutch are not so cautious, whereas the privacy conscious (and possibly less comfortable in English) Germans and French hold back.
Many of my German contacts use Xing, a Germany based social networking site instead. However all Europeans (and people in multinationals in emerging markets such as Turkey) are aware of LinkedIn, and will take a look at it when they are considering moving to another company.
In other words, from an employer perspective, LinkedIn is a tool not just for searching for recruits based on skills and experience, but also for the company to present an attractive profile.
I recommend that any Japanese company reviewing their LinkedIn presence first of all ensure that the “official” company LinkedIn page is clearly labelled as official (to distinguish it from an alumnus/OB site page run by an individual), and employees are encouraged to link their personal LinkedIn profiles to this official page.
More often than not, there are several pages already existing for the Japanese company. This needs to be tidied up, so that there is a headquarters page, and any regional company pages are clearly identified as such. It is possible to interlink the regional company pages to the headquarters page, to show they all belong to the same company family.
These official pages need to be managed by someone either in marketing or HR at the headquarters and regional subsidiaries. They need a description of the company, including size, activities and a link to the correct website. The pages also need to be “branded” to look visually appealing and reflect the company image. Use should be made of the facility to add descriptions of products and services and add news about the company.
If this is done correctly, then “followers” of company will swiftly increase, both from potential recruits and also current employees, who will feel much happier now their employer has a clear and attractive LinkedIn presence they can associate themselves with.