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There has been a marked increase in the number of clients asking me to provide training for Japanese expatriate managers in Europe on giving feedback and performance appraisals. I’d like to think this is because our marketing is having an impact – but on talking to the HR departments of our customers, it seems they have become aware of an increasing number of workplace conflicts between Japanese managers and their teams.
European employee dissatisfaction with Japanese managers’ feedback style is not a new issue. Complaints usually include that no feedback is given, or only negative or quantitative feedback. I usually explain that giving feedback is not as embedded in Japanese workplace culture as in Europe. Also, Japanese employees are used to working collaboratively as a team rather than having individual performance evaluated. The best employees are deemed to be the ones who look to improve themselves without having to be told.
I remember when I was working in Japan in the 1990s, many Japanese companies started introducing seika shugi (performance based systems) but often not very successfully. Evaluating individuals ended up destroying the collaborative, knowledge sharing work environment that is one of the strengths of the Japanese workplace.
The Japan HQ appraisal systems that have developed since the 1990s are much more quantitative than European systems. The manager gives numerical scores not just for performance and achievement of objectives, but also of behaviours, mindsets and competences. In Europe, we usually just give qualitative assessments of the latter, such as “meets expectations” or “exceeds expectations” or “below expectations”.
I suppose the Japanese quantitative approach seems more objective, and less personal. Numbers can be analysed across the whole company, and are not subject to interpretation or language barriers.
European managers use qualitative appraisals to stimulate a dialogue about what expectations they have for each individual and then come to an agreement on development opportunities for individual employees in terms of support that they need from the manager, training needs and potential career paths.
The norms of the workplace are rooted in our educational systems
My experience of the Japanese education system is that exams are of factual knowledge and knowing how to do something, often using multiple choice tests. Such exams assume there are clear right and wrong answers.
European education focuses more on critical thinking and understanding the reasons behind something. Exams are essay based, even in science. Scores are partly on getting the facts or the methodology right, but also on the quality of your arguments and the evidence you bring to prove your point.
Consequently, European employees do not unquestioningly accept numerical scores for individual behaviours, mindset and competences. They expect a manager to set clear expectations, give regular feedback and then be able to explain, with evidence, why the employee has met or not met them when challenged. The millennial generation is particularly demanding in this respect. No wonder Japanese managers need training on this – it’s not just a language issue.
The eagle eyed will have spotted that our revised ranking below for the top 30 largest Japanese employers in Europe for the year ending 2016 is not quite in rank order. Only a third of the reports covering the financial year ending 2017 are available but based on what we can dig out, we can say that acquisition hungry Nidec have topped 10,000 employees in Europe so will be higher than their 2016 ranking. Dentsu Aegis have also been gobbling up agencies and Bridgestone has acquired a couple of tyre companies in France.
Some of the more established technology brands have been acquiring around Europe too such as Panasonic (Ficosa in Spain, Zetes in Belgium), Konica Minolta (Mobotix in Germany, Dactyl & OMR in France) and Sony (eSaturnus in Belgium, Plumbee and Ministry of Sound and TruTV in the UK).
At the same time, Japanese companies are beginning to consider exiting investments, which is a relatively new development. Some have had this forced on them of course, like Toshiba selling Landis & Gyr and Westinghouse. Lixil was a new entrant into the top 30, having acquired Grohe, the German bathroom company and Permasteelisa, the Italian construction company but is now in the process of selling the latter to a Chinese company. “It may have been forced to sell assets it had trouble integrating” according to a source quoted in the Financial Times.
Hitachi, having acquired German company Metabo in 2015/6 is now selling it off with the sale of its power tools division to KKR.
Toshiba may well fall out of the rankings as a consequence of selling off its businesses and Takata may no longer qualify as a Japanese company, as it is about to be acquired by Chinese company Key Safety Systems.
For the full report of the M&A activities of the biggest Japanese companies in Europe, please subscribe to our premium newsletter or contact Pernille Rudlin (pernillerudlinrudlinconsultingcom) for details of corporate subscriptions and customised reports.
|Rank||Company||Total EMEA employees y/e 2015||Total EMEA employees y/e 2016||% change|
|1||Sumitomo Electric Industries||56477||56273||-0.36%|
|15||Bridgestone (only for Europe)||12255||12932||5.52%|
*Best estimate as figures not disclosed in annual report
Japanese companies’ investment in their brand marketing, particularly their websites, may have more to do with attracting graduates from Japanese universities than attracting new customers in my experience. Given that lifetime employment is still crucial to the big traditional companies (and still something many graduates aspire to), this is not surprising.
So Toyo Keizai’s survey of how the current graduate job seekers in Japan rate potential employers at the beginning and end of the recruitment process is a good indicator of the health of the brand and how well it was communicated to the job seekers. This year the megabanks such as Mizuho (#1) and MUFG (#3) are still in the Top 3 most highly rated employers even after the recruitment process, along with travel sector companies like ANA, JAL and JTB. Other financial services companies like Nomura, Daiwa and Sompo are also in the top 10 with the other megabank, SMBC at #11. This is much in line with the previous years’ graduates’ rankings.
Toyo Keizai notes that food and beverage companies seem to be increasing in popularity – Morinaga, Kagome and Kikkoman have all become more popular during the process and compared to last year. Other major companies whose ratings improved dramatically over the recruitment process (so people got to like them once they met them) and are also more highly rated this year than by the previous year’s graduates include Panasonic (up to #39 from #156 last year at the beginning of the process), Mitsubishi Electric (#41 from #154) and Toyota (#35 from #57) and Fujitsu (#47 from #210).
Trading companies such as Mitsubishi Corp, Mitsui, Sumitomo Corp and Itochu whilst still in the top 50, seem to have lost popularity compared to last year.
“Don’t give up on expressing your concerns to the British government, but also start putting your contingency plans into action now” was the response from Haruki Hayashi, CEO of Europe & Africa for Mitsubishi Corporation to a question at the end of a lunch seminar in London I attended earlier this month, along with 150 mostly Japanese business people. The question had been “if we won’t know until October 2018 the likely shape of the agreement between the UK and the EU, won’t it be too late to put our contingency plans into action by then, in time for March 2019?”.
To another question regarding the possibility of a second referendum, Hayashi responded – “however desirable, might it not have the same result? And aren’t the British too proud to have a second referendum?”
Hayashi’s speech was a geo-political, economic and risk analysis of the impact of Brexit. He started by hinting that the meeting between Ambassador to the UK Tsuruoka (who was present at the lunch) and the Japanese Chamber of Commerce and Industry in the UK (JCCI UK) that morning had been encouraging – that the ambassador said Theresa May’s visit to Japan had been fruitful in the sense of being a reaffirmation of a common vision on security, economic issues and global partnership and also that there was clear agreement that the EU Japan agreement would be the basis for a quick agreement between UK and Japan.
But then he shared a classic Mitsubishi Corporation political (including security, business environment) risk versus economic impact matrix, plotting the key countries in the EU along with Japan. Unsurprisingly, he predicted the UK economic impact to decline and political risk to increase from its current position clustered with France, Germany, Japan, Italy, Spain and Poland.
“London is the UK”- and up until now, the UK was the EU for Japanese expats
Nonetheless, from Japan’s perspective, the UK is currently so dominant in terms of Japanese presence in the EU, it will take a while for this to unwind. I hadn’t realised quite how dominant in terms of where Japanese themselves are located – there are around 207,000 Japanese living in the EU, and around a third of those are in the UK, with 90% of those in England and over half in London. “London is the UK for Japanese” said Hayashi. There are around 1000 Japanese companies in the UK, around a third of them are members of the JCCI UK. This represents 15% of the 6465 Japanese companies in the EU, which is not far from the 16% of EU GDP that the UK economy represents or the 13% of the population of the EU that the UK represents.
But as I have blogged elsewhere, it is the size and function of these Japanese companies, and also I now realise the density of the Japanese expatriates in them, which is where the UK has been dominant – many of the Japanese companies in the UK are the regional headquarters, and most of their Japanese expatriates are located there.
The UK also took the lion’s share of Japanese investment into the UK. Hayashi pointed out here was a big increase in Japanese acquisitions in the UK from 2010, particularly in 2016, with Mitsui Sumitomo Insurance acquiring Amlin and Softbank acquiring ARM (although I see the latter as an investment rather than an acquisition in the sense of integrating or accessing a market).
Japan’s soft power – more British visit Japan than Japanese visit the UK
Japan’s soft power in the UK is very apparent too – Hayashi listed up all the British brands that aren’t Japanese, but are Japanese influenced, like Yo! Sushi, Wagamama, Wasabi, Itsu and Superdry. And I can testify to his point that the Mitsubishi Corporation sponsored Hokusai exhibition at the British Museum was completely sold out. More British people now visit Japan than Japanese visit the UK – the cross over being in 2011 – 292,000 visited Japan last year, 75% of whom were tourists, whereas Japanese visitors have been at a fairly stable 220,000 to 240,000 a year to the UK. And British tourists spend more than Chinese tourists – because they stay longer and spend more on accommodation.
Japan’s voice is being heard more than a few years’ ago
Hayashi pointed out how the share of global GDP has shifted over the decades from the traditional West to China and India, and that EU integration seems to be losing pace. Japan can take leadership, to continue to support globalization and rebuild it to include China and Russia. Hayashi says he was initially rather embarrassed at the coverage his comments about Brexit got in the Guardian newspaper, but now he thinks it was fair, and that as British people do read the newspapers, it’s important for Japanese companies to have their voices heard in the media – for which they need to have a focused message. “Write to UK ministers about your concerns. Don’t give up. Start now”.
I’ve uploaded a rather wobbly recording of my interview on Sky News regarding Brexit, Theresa May’s visit to Japan and Japanese business in the UK here.
I still get the impression that gender diversity is regarded by Japanese companies as a Japan-only issue, even though our researches show there is still a gender diversity issue for Japanese companies in their European subsidiaries too.
It’s good therefore to see that Hitachi (disclosure – one of our clients) which has been proactive in gender diversity initiatives in both Japan and Europe is the only Top 30 Japanese company in Europe to also feature in the Nikkei Woman rankings, at #10.
According to the Nikkei Woman survey, as in previous years, the top ranked companies for women, based on male/female ratios, utilisation of women in management positions, work life balance etc are the life insurance companies such as Daiichi Life, Sumitomo Life, Meiji Yasuda Life and Nippon Life. As explained in a previous post, the sales forces of life insurance companies have traditionally been a female preserve, so this is no surprise.
Similarly, beauty and healthcare companies such as Kao and Shiseido feature in the top 10. Other companies in the top 30 are in the other traditionally female dominated sectors such as retail or travel or are foreign owned – Johnson & Johnson and Accenture.
Toyo Keizai has also published its “great places to work” for women rankings. The criteria are pretty similar to Nikkei Woman – more criteria and more specific but covering a broader range – such as childcare/elder care provision, but also employee satisfaction levels.
Although the traditionally female sectors still dominate, Fujitsu, one of the biggest Japanese companies in Europe (disclosure – also a client), is at #1. Fujitsu in the UK has been very active in gender and LGBTQ+ diversity initiatives too, so again the dots seem to be joining up there.
Other Top 30 European companies featuring in the Toyo Keizai Top 20 rankings are Fujifilm, Sony, Mitsubishi Chemical Holdings and MS&AD holdings (insurance). Hitachi does not feature in the Top 100, for some reason (although Hitachi Systems does).
Pernille Rudlin is interviewed by BBC World Service Business Matters on Theresa May’s trade delegation visit to Japan and the likelihood of being able to get any kind of commitment to a trade deal. You can hear it or download it here There’s a clip in the introductory news headlines and the actual piece starts 6 mins 38 seconds in on the podcast, 3 minutes 50 seconds in if you are listening to the streaming version.
The number of articles I have seen in the Japanese media full of complaints about the “work style reforms” announced by the Abe government last year seems to have shot up, particularly since the introduction of “premium Friday” in February of this year, when everyone was supposed to leave work at 3pm on the last Friday of each month and go shopping.
The Nikkei Business magazine’s 24th July 2017 edition has highlighted 3 kinds of behaviour attracting criticism in an article entitled “That’s not work style reform!”
Dumping work on overseas subsidiaries…
Mr A, a 30 something manager in a famous Japanese electronics company, is well known for producing great reports and yet somehow always managing to leave work on time, claiming he needs to pick up his kids from school, or do the housework. He goes on business trips to Asia twice a month, as his area of responsibility is global sales, and is meant to meet customers to understand their requirements for automotive and electrical components. However according to the young staff (presumably either Japanese or Japanese speaking) in the Asian offices, he mostly gets them to write the reports.
This behaviour started when the work style reforms began to be implemented, such as receiving warnings the next morning if your PC was still on after 8pm. Mr A said he couldn’t take his laptop home because his young children make it hard to work, so asked the Asia office staff to draft reports for him. “If you try to refuse he starts talking about his kids. how he has to take them to hospital or it’s their birthday party”. I wonder though, unless he’s wrongly claiming credit, isn’t this just good delegation?
…and other complaints
Other behaviours which complaints have been received about include – refusing to read customer emails after 4:45, just moving the mouse around to show that you are working from home, lights going out in the middle of important meetings, “last orders” being 2 hours before the end of business.
Nikkei Business lists up the initiatives which have been taken:
- Ajinomoto: changed the official end of the working day to 4:30 from April 2017 and shortened the working day from 7 hours and 15 minutes by 20 minutes
- Honda: Introduced a “working interval system” whereby there must be a minimum of 12 hours break between two work periods
- Fujitsu: Authorised unlimited working from home (but only twice a week maximum after the end of the working day) for around 25000 of its employees
- Calbee: Has a bi-annual “get rid of unnecessary work” drive
- Sony: promotes a “flex holiday” system of 16 day consecutive holidays including Saturdays.
- Astellas: Introduced a “Family Friday” system where work finishes each Friday at 4:30
What Japanese companies should do instead
Nikkei magazine asked the Chinese founder of Japanese software company Softbrain Song Wenzhou what he thinks Japanese companies should do instead. “It’s pointless to expect Japanese people to become more efficient by themselves. Even if you start an initiative to get everyone to observe 9-5 working hours they will still stay in the office even if they don’t have anything important to do. Being more efficient is seen as leading to sloppiness and if you just do the essentials of your job this is seen as bad!”
- The whole organisation – not just the individual – has to focus on how to improve productivity. I totally agree – leaving it up to the individual will not work in a collectivist, collaborative workplace.
- Then you can reduce working hours
Mitsuo Sekiya, the founder of Disco Corporation, a Japanese manufacturer of precision machinery, led a true reform of work style, resulting in three consecutive quarters of highest ever profit this year. Sekiya’s view is that true work style reform requires a radical restructuring of the company and that the problem is that employees who increase their productivity are not rewarded either financially or in terms of evaluations.