Pernille Rudlin - Rudlin Consulting

About Pernille Rudlin

Pernille Rudlin was brought up partly in Japan and partly in the UK. She is fluent in Japanese, and lived in Japan for 9 years.

She spent nearly a decade at Mitsubishi Corporation working in their London operations and Tokyo headquarters in sales and marketing and corporate planning and also including a stint in their International Human Resource Development Office.

More recently she had a global senior role as Director of External Relations, International Business, at Fujitsu, the leading Japanese information and communication technology company and the biggest Japanese employer in the UK, focusing on ensuring the company’s corporate messages in Japan reach the world outside.

Pernille Rudlin holds a B.A. with honours from Oxford University in Modern History and Economics and an M.B.A. from INSEAD and she is the author of several books and articles on cross cultural communications and business.

Since starting Japan Intercultural Consulting’s operations in Europe in 2004, Pernille has conducted seminars for Japanese and European companies in Belgium, Germany, Italy, Japan, the Netherlands, Switzerland, UAE, the UK and the USA, on Japanese cultural topics, post merger integration and on working with different European cultures.

Pernille is a non-executive director of Japan House London, an Associate of the Centre for Japanese Studies at the University of East Anglia and she is also a trustee of the Japan Society of the UK.

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Here are my most recent posts

What will happen to Japan’s supply chains in Europe post Brexit?

I found the lack of understanding of how trade actually works – particularly in regard to the complex supply chains – amongst those campaigning for the UK to leave the EU, really worrying. The idea that you could, for example, say something was a “German car” which the Germans would be desperate to sell to the UK, when it might have been designed, financed and maybe even built with wire harnesses from the UK – and could be a Japanese brand! This worry is confirmed by an article which recently appeared in the Nikkei Online, by Takanori Sakaguchi, a purchasing consultant.

“To be frank, like most of our readers, I was not expecting the UK to vote to leave the EU. Sterling plummeting, the Yen strengthening, share prices falling, this scenario was just a simulation”

Sakaguchi thought it would be like the Scottish referendum, with 55% voting to stay. “Economists warned the economic damage would be unavoidable. Over half of UK’s exports go to the EU. The majority of multinationals’ European HQ are in the UK, where business can be conducted in English.”

The writer’s contacts who were expatriates in the UK all said that if the UK left the EU, then the reason for being in the UK would be eradicated. Employment rights were also protected by being in the EU.

“If the UK left the EU, it will take an extraordinary amount of time and effort to reach free trade agreements with each country. Furthermore, once it has left the EU, it would take 10 or 20 years before it could return.”

“It is unclear what the 2 year negotiation is going to be like, as there is no precedent. It is likely, in order to discourage others from leaving, that EU countries will take a tough stance. It is unclear if the UK will be able to avoid immigration inflows and if that will lead to a reduction in unemployment for its own people.”

“There is a 100 million theory in the automotive industry – if 1 country has more than 100m population then should be able to sustain a car industry – acquiring all parts and technology locally. Japan and the USA can therefore sustain a home-grown car industry. None of the countries in Europe has a population greater than 100 million, so that was a good reason to create the European Union. For it to work, there needs to be standardization of legislation, systems, policies and engineering methods. There is no alternative.”

Short term

“In the short term, there will be a cheaper pound, a fall in asset prices and share prices. There will be those who try to make use of a cheaper pound to “buy UK”. For retailers, it will be beneficial.”

“However, currently companies are cutting back on investing in UK capital investment, and will become even more cautious about this if the UK leaves the EU. It’s likely that those who have invested and have not made their money back, will withdraw.”

Medium term

“Although they may benefit short term from a cheap pound, manufacturers will think about shifting to other countries in order to protect their competitiveness, so in the mid term, jobs will shift. Companies will also be assessing whether to keep factories and suppliers in the UK.”

“Also there will be new UK-only labour laws, which may mean increased costs – another reason to leave the UK.”

“Supply chain costs to the UK are likely to increase as the main labour supporting it is on the continent, particularly if there is a labour shortage in the UK as well. It will make manufacturing in the UK even less competitive.”

“Supply chains are also likely to become more complex if the UK starts to implement its own rules and regulations.”

“The key thing about supply chains is that they are a way of spreading the risk in case one part is affected – as per ASEAN economic cooperation and concerns about tsunami or earthquakes.”

“Yet the UK chose independence and control over any negative economic impact. It is difficult for supply chains to read what is going on, but surely as any country leaves an economic area, they will adjust their strategy. This is a never-ending fight between sovereignty and free markets.”

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A local solution to breaking the Brexit deadlock

The only things we can be sure that the EU referendum was about was that it was a majority vote for leaving the European Union and an endorsement of the main promise offered by the Leavers to “take back control”. However the economically non-damaging options (for example staying in the European Economic Area, the so-called Norway option, which business favours) need the UK to sign up to free movement of people.

My cross cultural professional insight on this being that the French and German leadership are likely to be highly rules/principles – and no exceptions – based about this, as one of the fundamentals of Europe.

So. The bottom line to what I am proposing is – we leave the EU, join the EEA and accept free movement of people between nations but not between regional authorities. We harness the power of Big Data (something the Brexit True Believers like Steve Hilton, Daniel Hannan and Michael Gove – although I doubt he has the faintest idea what that is – should be happy about in their dreams for a digital democratic 21st century nation) to be far more hands on about the movement of people within our country.

I’m thinking that National Insurance numbers should be devolved to a local level. Local communities vote on how many NI numbers they are willing to offer per year, and this should be cross checked against hiring plans, school places, available housing, NHS capacity – and plans/funding made accordingly. There will be no benefits, no school places, no jobs, no housing without an NI number.

It will need an investment in administrative resources to back this up and enforce – it will be like when the national census was first introduced in 1841. And really, the fact that we still only do a national census every 10 years a full 175 years later is quite bizarre in our rapidly changing, globalizing world.

It addresses the issue that the unexpectedly large influx of EU people into the UK since 2004 has been very unevenly distributed, particularly amongst communities that have never really recovered since the 1980s collapse of traditional industries.

It actually may turn out to be unnecessary, as I agree with Jonathan Portes at the National Institute of Economic and Social Research that we might have reached peak immigration anyway. Brexit will certainly help push this trend further. But at least it gives people a sense that they are back in control again.

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Estonia & European identity

I have been wanting to visit Estonia for a while. Although it is a tiny country, with only 1.3 million population, I knew from the research that had been done on my family history in the Baltic region that Estonia’s story would help me understand more about the development of Europe and whether there could be such a thing as a European identity or common culture.

So when I had an opportunity to visit the Estonian capital, Tallinn, for a conference recently, I made sure I had plenty of time for sightseeing. I know Japanese people often think of Europe as having a “stone culture” – buildings built to last, as opposed to buildings made of wood which can be pulled down as needed, and Estonia certainly fits that category, with plenty of beautiful churches and medieval houses built from the local limestone to visit.
However there were other aspects of Estonia which did not fit my usual concept of a European country. For example, Christianity came very late to Estonia, in the 13^th century, a thousand years after it arrived in Western Europe. It was a pagan country until it was conquered by the Northern Crusades, led by the Christian Kings of Denmark and Sweden and the Germany Livonian and Teutonic military orders (which is where my mother’s family had their roots). To this day Estonia is one of Europe’s least religious countries.

The late arrival of Christianity was partly because Estonia was never occupied by the Romans – unlike most other Western and Southern European countries. Estonia was, however, occupied by other countries for the past 700 years; Sweden, then Russia, then a brief moment of independency in the 1920 and 1930s, then Germany and then most recently by Communist Russia, when it was part of the Soviet Union.

The Russians tried to industrialise what was basically an agricultural and trading economy, setting up factories and mines, bringing in many Russians to work in them. Initially Estonia was seen as a prosperous place to emigrate to but the industrialization was not successful, and the Estonian economy suffered, particularly as its usual trade routes to the West had been cut off.

It was when I wandered around the old merchant houses of Tallinn that I felt I was in a recognisably European environment. The merchants of Tallinn were part of the Hanseatic League, a confederation of merchants and towns that stretched across many countries of Northern Europe, from the UK to Russia from the 13^th to the 17^th centuries.

Even now, with the rise of anti-European movements in the UK and the Netherlands, most people would want to stay in some kind of trade federation. The region’s history of trading and shipping, travelling and migrating around Europe and a love of doing deals with each other is still very strong. It’s an identity nobody in Europe wants to lose.

This article by Pernille Rudlin originally appeared in Japanese in the 7th November 2013 edition of Teikoku Databank News and also appears in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.

Top 30 Japanese companies in the UK – Brexit impact

I’d been avoiding doing a Top 30 Japanese employers in the UK ranking to accompany our Top 30 Japanese employers in Europe, as officially disclosed data per country are much harder to get hold of than regional totals. But with Brexit, more data has been disclosed about employee numbers and where there are still no data from the company itself, I took the top figure from publicly available sources.

Credit research agency Teikoku Databank, for whom I write a monthly column, estimate there are 1,380 Japanese companies with operations in the UK, with the manufacturing industry accounting for 40%. The estimate commonly used by the Japanese Embassy in the UK is that Japanese companies directly employ around 140,000 people. Our Top 30 employ nearly 100,000 of those employees, so they represent around 2/3 of the total number who are employed by Japanese companies in the UK.

Manufacturers do indeed represent more than half of the Top 30, although the largest company (12,000 employees), Fujitsu, is an IT solutions and services provider in the UK. 16 of our Top 30 companies have factories in the UK, half of which are automotive related. Automotive factories are part of a highly integrated European supply chain, both exporting a high proportion of their production to Europe and importing parts from Europe. The rest range from food processing to electronics to medical instruments. The automotive factories export more than half of their production to the rest of Europe, and also import plenty of parts from Europe for assembly.

In terms of Brexit impact, most of these companies have other factories in Europe, such as in Spain, Romania, Portugal and Poland, so my guess is that over the next few years, depending on the deal which the UK makes with Europe, some production and jobs might transfer to other locations.

The remaining companies are almost all financial services companies. Again, they all have offices elsewhere in Europe and I have already heard that some of them have opened “European Union” branches and built up capabilities in Amsterdam, for example. If the UK loses its “EU passport” to operate freely across EU financial markets, then undoubtedly more jobs will shift. In any case, just as with the manufacturers, there have been shifts eastwards of middle and back office jobs to Continental Europe, particularly Poland.

According to the Teikoku Databank, 18.7% of the 1,380 companies are wholesalers/sales operations, 17% are in the services sector, and 11.5% are financial/insurance. The biggest group (29.5%) have consolidated turnovers of between £75-£750 million/Y1bn-Y10bn/$100m-$1bn and 22.8% have turnovers of over £750m/Y1bn/$1bn, so the larger Japanese companies are well represented, in contrast to ASEAN, where most of the Japanese companies who have presence there are classified as small-medium size enterprises in Japan. 55% of the UK Japanese companies have their headquarters in Tokyo, 8.5% in Osaka and 5.9% in Kanagawa prefecture (Yokohama and Kawasaki).

But the outstanding feature of the Top 30 that most concerns me, both for my own business and for the future of the UK, is the large proportion of the Top 30 that are the product of an acquisition. Having put a stake in the ground, they may well stay in the UK despite Brexit, but will the UK really see many more major acquisitions from now on? And despite their British roots, might the European HQ gradually shift away? 21 of the Top 30 currently have their regional HQ in the UK, but I have seen many of them become more virtual and integrated in the way they manage the region, so that actual physical location is less important for management level regional executives.

Fujitsu – ICL
Sumitomo Electric Industries – Lucas
Itochu – Stapleton Tyres, Kwik-Fit
Mitsubishi Corporation – Princes Foods
Hitachi – The Railway Engineering Company, Horizon Nuclear Power
NSG – Pilkington Glass
Dentsu – Aegis
Calsonic Kansei – Llanelli Radiators, Marley Foam
Suntory – Lucozade, Ribena
Olympus – KeyMed
Mitsubishi Chemical Holding – Lucite
Mitsui Sumitomo Insurance & Aio Nissay Dowa – Amlin, Insure The Box
Sompo Holdings – Canopius

My sense is, UK based people might want to get ready to move eastwards too in the next few years, if they want to work for the Japanese Top 30. Ironically, Poland looks a good bet, the source of so much immigration to the UK recently and in the more distant past.

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN THE UK 2021

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Balkanizing Europe – in a good way

On the way to the stunning Krka waterfalls in Croatia, from where we staying on the Adriatic coast for our holidays last summer, our tour guide suddenly said “we are now in the Balkan part of Croatia”. The term Balkan has many resonances for Europeans who know their history. Not only is it 20 years since the war in the Balkan peninsular, but it is 100 years since WWI, which was thought to partly have been the result of “Balkanization”, whereby the countries, formerly ruled by the Ottoman Empire or the Austro-Hungarian empire, fragmented into warring states. Clearly our guide wanted us to appreciate that Croatia was not just Balkan, but also Mediterranean, and therefore part of modern Europe.

The warring Balkan states were in part reunified under the Soviet Union after WWII and most Western Europeans of my generation remember the Adriatic coast as being part of Yugoslavia, and a cheap but pleasant place to go on holiday. Yugoslavia was meant to be one of the more benign and successful Soviet satellite countries, so it was a shock to Western Europeans when it collapsed into a bloody civil war.

Croatia became the most recent member to join the European Union, in 2013. Other Balkan countries such as Former Yugoslav Republic of Macedonia, Serbia and Montenegro are official candidate countries, with Bosnia and Herzegovina being considered a “potential candidate”.

With the European Union in danger of falling apart itself, thanks to the Eurozone crisis and the UK referendum on exiting, the Balkan candidate countries must wonder what exactly the benefit of joining the EU might be. For them, the original aim of the European Union, to prevent outbreaks of further wars through economic cooperation, still has meaning, of course, given their recent history.

The benefits of economic cooperation are less obvious. It is clear from Croatia’s recent accession that joining the EU later on means missing out on the big regional business investments by multinationals. Balkan state populations and economies are relatively small, so there is not much incentive to invest substantially in opening a subsidiary in such countries – the markets could probably be easily covered through a local agent, or from a regional base in Germany or Poland.

Croatia still has a shipbuilding industry, representing 10% of its exports but clearly it has had to concede that a major economic driver is going to be tourism, as it was in the past. I saw plenty of Japanese tour groups there, and I expect, like us, they were impressed by the beauty and history of Croatia’s old towns, the delicious seafood and how clean and well looked after the streets and buildings were.

Above all what really struck me was the hardworking, efficient, polite, honest, well educated, excellent English ability and cheerful nature of all the Croatians we met. Although the Croatian market may not be attractive to foreign investment, the Croatian workforce certainly is.

I only hope that Europe can work towards a future where Balkanization has a new meaning – that people from the Balkans contribute to and benefit from the European single market – and not the old definition of a disintegration into hostile, ethnically cleansed states, yet again leading to the kind of war that the European Union was meant to prevent from ever happening again.

This article first appeared in Japanese in the Teikoku Databank News and is also in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.

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East meets East #3 Pork, guns and the Galapagos

My fantasy local start-up idea is a tonkatsu (Japanese deep fried breaded pork) restaurant, using outdoor bred Norfolk pork and Colman’s mustard (manufactured in Norwich) with a side order of locally grown shredded cabbage. *

Although tonkatsu is now viewed as a typical Japanese dish, in Japan it was originally a yoshoku “Western Style” dish, introduced into Japan in the 19^th century, when Japan began to open itself to foreign influence and trade again. Japan had cut itself off for the best part of three hundred years, with no foreigner able to enter or any Japanese leave the country under pain of death.

This law was put in place by the Tokugawa shoguns in the 17thc, to end the colonial and religious influence of Spain and Portugal and also to help the Shogun to gain more control over the foreign trading of other feudal lords, preventing them from building up military strength.

Trade did not cease entirely during this time – it was just heavily controlled – with Dutch and Chinese merchants being allowed to live on an artificial island off the coast of Nagasaki. Western scientific ideas also trickled into Japan, but largely undercover.

Consequently, when the Americans finally forced Japan open in the 19^th century, the Japanese found themselves far behind in military strength, still using matchlock guns from the 16^th century. Japan had also missed out on the industrial revolution, but quickly caught up, sending many of its brightest and best to Europe and the US to study technological developments, and bringing foreign experts back to work in Japan.

Post war Japan offers a more modern day insight into what happens if a trading nation like, oh, let’s say the UK, chooses to shut its borders to migration (98% of the Japanese population are of Japanese nationality) but tries to export as much as possible to the rest of the world. Initially, Japan won through with cheap, increasingly well-made products. As the pound is already falling with the threat of Brexit, presumably there will initially be some positive impact in terms of British exports becoming cheaper. Imports will however be correspondingly more expensive.

If houses prices weaken and the FTSE falls post Brexit, because of foreign investment pulling out of UK assets, then we might be faced with an asset price crash similar to when Japan’s economic bubble burst in 1990. In the years after, a large number of basic manufacturing jobs in Japan went offshore, to Asia. After a decade or so of deflation and low growth, some higher end manufacturing moved back, but factories are far more heavily automated, and robot driven than before.

Even though the UK is increasingly exporting more services than manufactured products, the same offshoring and automation threats will apply. In fact, we are already seeing this happening – recently HSBC announced that 840 IT back office jobs will be moved out of London to Poland and China and RBS have also announced similar reorganisations.

Other jobs which cannot be offshored (for example, warehousing, food harvesting and processing) – which were being done by immigrants – are also threatened by automation. My old employer Fujitsu has been pioneering an agriculture “cloud” which uses supercomputing and Big Data to allow elderly farmers to capture and automate their knowledge on when to sow, fertilise or harvest.

Where automation is impossible, Japan has also let occasional groups of immigrants in to do what are known as the 3 K jobs – Kitanai (dirty), Kitsui (hard) and Kiken (dangerous), such as in construction and nursing.

It’s possible British employers will also improve wages and conditions to attract indigenous British employees to our 3K jobs. However, as we are quite close to full employment already, this will in turn push prices up (and as noted, prices of imports are likely to rise too), so overall, people will not feel better off.

Japan used to be very expensive, but the 20-year stagnation has resulted in deflation, with 40% of its workforce in badly paid, insecure jobs and the other 60% with the secure jobs have seen their take home pay fall in real terms, despite deflation.

Innovation should be the way out, but actually Japan has a nickname for innovations that only sell well in Japan, because they were designed by Japanese for Japanese – the Galapagos syndrome – after the isolated islands where flora and fauna developed to fit local conditions, but die in the world outside.

*if anyone wants to take up this idea, I’d be delighted to act as advisor, for equity and a lifetime supply of meal vouchers (however, if the UK leaves the EU, starting in the Netherlands or Denmark might be preferable)

Over half of Top 30 Japanese companies have their European HQ in the UK in 2016

A regularly cited statistic in the current EU referendum is that 60% of non-European companies have their European HQ in the UK. I have just revised our Top 30 Japanese companies in Europe and found that 16 out of the 30 biggest Japanese employers in the region (some companies cover Africa, Turkey, Middle East, Russia from their European HQ) have their regional headquarters in the UK – which is 53%, so slightly under the overall average. Together they directly employ nearly 420,000 people in the region.

I added Yazaki (a privately held, relatively unknown but huge automotive components supplier) – straight in at number 2. Their European HQ is in Germany, covering Europe and factories in Africa. The factories do of course bulk out the total of 45,200 employees in the Europe and Africa region.

If Brexit does happen, the UK could still cite historical and Commonwealth ties as a case for locating a Europe & Africa or EMEA (Europe, Middle East and Africa) HQ in London, but clearly for the automotive industry this is not a significant factor. Only Honda has their European headquarters in the UK, and automotive parts suppliers tend to follow their customers.

Most of the brand name electronics companies have based their European headquarters in the UK. The financial companies do not have such large numbers of employees, so whilst nearly all of them have their headquarters in London, they are not in the Top 30.

Adding Yazaki has pushed out electric motor manufacturer Nidec – but I suspect Nidec will soon be back in, given how acquisition hungry it seems to be.

For reports, profiles and other research on the Top 30 largest Japanese companies in Europe, Middle East and Africa please contact us.

Mitsubishi Motors & Nissan – Is Ghosn prepared to try to nail jelly to the wall?

When it comes to the Mitsubishi group of companies (keiretsu), I did almost literally write the book (A History of Mitsubishi Corporation in London: 1915 to Present Day), although my focus was more on the way the pre-war Mitsubishi Goshi evolved into Mitsubishi Corporation, the trading company, and more specifically, its London office.

It’s generally perceived in Japan that the Mitsubishi keiretsu has been the most cohesive and robust of all the keiretsu (Mitsui, Sumitomo, Fuyo being the other main ones) but as you might imagine, the current Mitsubishi Motors fuel economy data manipulation scandal has put this to the test.

According to Nikkei Business magazine (April 22^nd edition, not available online), the cracks are appearing. Whereas in the previous Mitsubishi Motors crises (recalls for various defects in the 2000s) Mitsubishi Heavy, Mitsubishi Corporation and Bank of Tokyo Mitsubishi UFJ all stepped in and financial support came from Tokio Marine, Mitsubishi Electric and Mitsubishi Materials as well, this time seems different.

Even now, having been hit by the commodity price slump, the automotive sector remains an important profit generator for Mitsubishi Corporation as it is involved in the sale and financing of vehicles in Asia and Europe as well as engine manufacture. Mitsubishi Corporation also seconds quite a few employees to Mitsubishi Motors, including the current Chairman and CEO Osamu Masuko.

Other Mitsubishi companies do not have such ties. Even though Mitsubishi Chemical Holdings supplies products to the automotive sector, its main customers are Toyota and Nissan. Mitsubishi Paper also said “we are busy with our own affairs”.

It’s not just about whether the companies have business together, points out the Nikkei. It’s also an issue of corporate governance. The Mitsubishi UFJ Financial Group has been reducing cross shareholdings, where appropriate. Mitsubishi Corporation is also checking shareholdings regularly for rationale and yield and disposing of them as necessary. Presumably it is hard to justify “Protecting the Three Diamonds” as the sole reason for support, to external directors and shareholders.

The Nikkei sees this as a chance for the Mitsubishi group to embark on a delayed restructure [the article was written before Nissan stepped in to acquire a 34% share]. In previous restructurings, there was a discussion about selling off the largely domestic ‘mini-car’ business, so this might be finally realised.

A more recent article in the Nikkei Asian Review points out that a key question is whether Nissan’s CEO Carlos Ghosn’s aggressive brand of reform will suit the corporate culture at Mitsubishi Motors “where change is not exactly a buzzword”. The question I have is what the corporate culture of Mitsubishi Motors actually is, other than a reluctance to change. The lack of a clear definition of values and vision may indeed be one of the causes of the repeated scandals. There are the Mitsubishi Three Principles, but not all Mitsubishi companies showcase them, and they lack the strong philosophy and toolkit of something like the Toyota Way.

Along with my official book on Mitsubishi in London I wrote a further unpublishable chapter, called “The Vague Company”. It talked about the benefits and difficulties of having a vague, unspoken corporate culture. Employees can enjoy the sense of being treated like adults, to work out for themselves what the right “way” is, but it makes global expansion – particularly post-merger integration – highly frustrating, when new, hybrid cultures need to develop. As one frustrated American employee at another Mitsubishi group company said to me the other day “I can’t get a handle on what the Mitsubishi Way is”. It is, as we say in British English, like trying to nail jelly to a wall. I suspect Ghosn may quickly tire of this and use his hammer in more brutally effective ways.

For more on Mitsubishi Motors’ future, I recommend this blog post by my old friend and former head of corporate communications at Mitsubishi Motors in the Daimler Chrysler days, Jochen Legewie: http://www.cnc-communications.com/blog/the-future-of-mitsubishi-motors/

For more on Mitsubishi corporate culture, I have gathered some resources on Pinterest here

East meets East: East Anglia to East Asia (via Europe)

When I first moved to Norwich, just under two years’ ago, my new bookkeeper unnerved me by saying “we don’t do euros in Norfolk”. A third of my turnover is in euros, so I wondered whether I had chosen the best location for my business.

It’s true that there aren’t that many Japanese companies – my target customer group – locally in East Anglia either. However, those that are here reflect the regional strengths in food processing and energy. Mizkan owns Branston Pickle, which is made in a factory in Bury St Edmunds and Marubeni is the owner of Seajacks, a Great Yarmouth based offshore wind power engineering company. Although car companies such as Toyota and Nissan are probably the most famous Japanese investors in the UK, Norwich-based Lotus is owned by Proton, a Malaysian company.

More recently, Japanese insurance companies have been on the acquisition trail, and this has an East Anglia angle too, as the companies they have acquired have offices in the region and are keen to shift more personnel out of the expensive City of London. One such client, as well as asking me to do some training for their office in Chelmsford, Essex, also sent me to their branches in Zurich, Amsterdam and Brussels.

I decided to take the opportunity of the Belgium trip to visit Bruges, intrigued by its similarities to and influences on Norwich. Flemish weavers, masons and goldsmiths settled across East Anglia throughout the Middle Ages, when Norwich and Bruges were Hanseatic League outposts. Bruges, like Norwich, was a thriving river port, trading in locally made cloth. Like Norwich, Bruges was largely bypassed by the industrial revolution and trade declined after its river silted up.

Now Bruges is mainly a tourist destination as well as home to the College of Europe. With the EU referendum going on, it seemed an appropriate time to visit the place where Mrs Thatcher made her famous 1988 speech against further European integration, which inspired The Bruges Group, many of whose members are behind the current campaigns for Britain to leave the EU.

The Bruges Group flavour of Brexiteer sees exiting the European Union as a means of ending European political and regulatory interference. However, talking to people in Norwich, the argument that obviously most resonates is that of getting back control of the UK’s borders, and preventing further immigration, particularly from Europe.

Other former Hanseatic outposts on the UK’s east coast have not fared as well as Norwich. There are unemployment hotspots yet large numbers of Europeans come to the region to help with the harvesting and production of food. Recent polls show the region overall is in favour of Brexit.

So what will Japanese companies do if the UK does leave the EU? I expect that those that have already invested – either because the UK had a strength in a particular industry, or they wanted to access the UK market – will stay. But those who use the UK as a coordination base for the rest of Europe, may well consider relocating or shifting any further investment into continental Europe.

This is really bad news for my business, as my best clients are the European HR departments of the regional coordinating headquarters of Japanese companies. One such client integrated all their back offices functions a couple of years’ ago, which meant they shifted their HR back office to Turkey, managed by a team in Portugal, and I have not had any business from them since.

The common market and free movement of people over the past 40 years in Europe has brought about a more integrated structure for most multinationals. The UK has benefited from this by becoming the main host of European headquarter functions – headquarters which generate direct and indirect employment. This has made London an expensive place to operate, so jobs are moving east, not just to the east of the UK, but to countries like Poland. I am also now looking to recruit a consultant in Poland. Ironically, most of the candidates have had experience working in the UK.

One of my other Japanese clients has started shifting personnel from London to Amsterdam. London will continue to be the EMEA (Europe, Middle East and Africa) HQ and Amsterdam will be the European Union HQ. So maybe that’s the way to go for British businesses, if we do leave the EU.

I already have had some business in the Middle East, and was recently asked if I could find consultants in Morocco, Tunisia and South Africa. It’s something I could do whether or not the UK is in the EU, so ultimately, I think we British businesspeople should be asking ourselves, is it really worth going through all the uncertainty, cost and bad feeling of negotiating our way out and then re-negotiating our way back in to trade deals, to be pushed into doing something we should be doing anyway?

I visited Great Yarmouth (another former Hanseatic League outpost) recently, to see an excellent production of the Tempest at the Hippodrome. It was part of the Norfolk and Norwich Arts Festival – which benefits from EU funding. I noticed that most of the cafes were run by Portuguese immigrants and as the one we wanted to go to for lunch was fully booked, we ended up in a local pub.

Initially, the atmosphere and menu brought me back to when I was a child in the early 1970s, before we moved to Japan and the UK joined the European Union. The UK seemed to be in permanent decline – shabby, with awful food and if you wanted olive oil to cook something better at home, you had to buy it at a chemist.

However, it turned out the pub stocked good local cider and beer and the food was well cooked and promptly served. On the way back from the toilets (spotlessly clean) I realised that quietly and efficiently running the whole operation was the Thai wife of the British owner.

This article appears in “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” by Pernille Rudlin, available on Amazon as a paperback and ebook.

Why is there no Japanese word for ‘risk’?

Listening, or rather looking at the presentation of Kazumasa Yoshida, the CEO of Emergency Assistance Japan, I was yet again struck by the fact that there is no direct translation in Japanese for the English word “risk”. Yoshida even had a slide to define “risk”, with “risk” written as “リスク/risku” in katakana, which is the Japanese alphabet used for borrowed, foreign words. His definition of risk was the potential for a crisis to occur, which if then becomes reality, is a threat, and then when there is harm, is a crisis.

Crisis is “kiki/危機” in Japanese, and “kiki” is sometimes used instead of “risku”. This causes problems when trying to distinguish between risk management and crisis management in Japanese. Risk management then becomes two borrowed foreign words “リスク・マネジメント/risku manejimento” and crisis management is the entirely Japanese “kiki kanri/危機管理”.

I asked Yoshida why there was no word for risk in Japanese. He said it was indeed puzzling, when you considered how prone to natural disasters Japan was. His view was that it was something in the Japanese mind-set, that cannot deal with a crisis in advance, only if it happens in front of their eyes. This, he added, is why Japan has not coped so well in terms of preventing natural disasters from turning into wider crises, as with the Fukushima earthquake.

This kind of explanation can shade into the Myth of Japanese Uniqueness/Nihonjinron school of thought, which I am not so keen on. My preferred explanation is a mix of more universal psychological, geographical and religious influences. Most humans are bad at assessing and dealing with risk, vastly overestimating the probability of facing situations they cannot personally control (airplane crashes, terrorist attacks) and vastly underestimating the risk posed to them by situations they think they can control, such as crossing the road, or skiing. So it’s the very fact that Japan has had a history of massive and regular natural disasters such as earthquakes, volcanoes and tsunami, that causes a numbness to set in. The Japanese expression “carp on a chopping board” springs to mind. Apparently carp, when faced with a chopping board, know the end is nigh, so stop fighting it and face the inevitable.

This kind of acceptance of fate, and seeing struggle as a waste of effort, is very much a Buddhist teaching. And yet, looking out of the window of a bullet train in Japan, you can see the enormous but often useless efforts being put into preventing a disaster from occurring or having an impact in Japan – the concreting of the bottoms of mountains and the sides of rivers to prevent landslides and flooding and the huge concrete boulders and walls that cover the coastline. But the markers left by previous generations who survived tsunami, warning that houses should not be built beyond that point, were ignored.

Japanese companies are riddled with processes for double and triple checking, imposed after a mistake has happened. When a mistake does happen, it is usually covered up rather than dealt with. A participant in one of my seminars told me how a misdirected client confidential fax, which ended up on the private fax machine of an elderly Japanese lady (fax machines are still quite common in private homes in Japan) resulted in the old lady ticking off a senior director, who then immediately imposed a “fax buddy” system on the entire company – Japan and overseas. Any employee sending a fax must be accompanied and monitored by another employee.

This story found its way into an article in the Nikkei Asia Review, by Michael Stott, a Financial Times journalist who heard it at one of our Japan Intercultural Consulting seminars in Japan. As his article observes, “the painstaking decision making processes, the elaborate corporate hierarchies, the extreme fear of failure and the entrenched conservatism have not changed much” for Japanese companies over the past couple of decades.

Yoshida had a clear recommendation for what Japanese companies should do, namely, appoint an executive to be responsible for “risk”. They should not be someone who has been moved horizontally away from business line management because they are deemed to be no longer effective (which would be a classic Japanese corporate resolution). They need to have the ear of the President and be able command business units on what they should do. It should therefore be an important and recognised role – either for a specialist, or be made as a precondition that any President should have occupied the role. And they should be someone who, as he put it, “doesn’t run away.”

Yoshida said the question he usually gets asked is how he ended up founding the company – which, as the name suggests, provides assistance to Japanese overseas who find themselves in life threatening situations. It would seem in itself to be a risky venture, given that Japanese notoriously won’t pay for something which is simply a service. As a consultant to Japanese companies, I do indeed recognise this problem. He said when he was working for Yamaichi Securities in Paris, he came across a similar French company and thought Japan could do with such a service and then what with one thing and another…

He did not need to specify – the name Yamaichi Securities alone tells the story for Japanese business people. It was one of the most famous casualties of the 1997 Asian financial crisis and the uncovering of illegal trading which in turn was covering up losses made on client accounts. The company’s last president made a famously tearful public apology on television. Unfortunately, lessons in managing risk do not seem to have been learned twenty years’ on, with a seeming procession of Japanese Presidents bowing their heads in shame at unanticipated risks and covered up mistakes which escalate into full blown crises. Judging by the other reactions to Yoshida’s presentation, the audience at least will be lobbying their companies to appoint a senior risk executive as a matter of urgency.

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Why is there no Japanese word for ‘risk’?

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