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

Diversity on boards in UK and Japan

The UK business media has paid more attention than usual to Japanese business topics, thanks to the new corporate governance regulations that have been introduced in Japan on June 1^st. Corporate governance is still a hot topic in the UK, 23 years on from the Cadbury Report which made similar recommendations to those being adopted in Japan, and has been influential on EU and US regulations since.

External directors are now a standard feature of British boards, but there is still concern that there is a lack of diversity in the membership of the boards of British companies. What we call in the UK an “Old Boys’ Network” still operates in the appointment of board members. It is a natural human instinct to prefer to hire people who are similar to you and many appointments are made through personal connections rather than publicly advertised.

The most recent update on another corporate governance review, the Davies Report of 2011, which recommended an increase representation of women on FTSE 100 (Financial Times Stock Exchange) boards to at least 25% by 2015, was issued in March of this year. Good progress has been made on having more women non-executive, external directors, but the percentage of executive directors who are women is still very low (4.6% for the FTSE 250).

In addition to the “Old Boys’ Network”, boards want to appoint people with a strong track record in a particular industry or who have financial expertise. Women tend to have more varied, generalist careers or are professionals in areas such as HR or marketing. There is still a lack of women rising up through the ranks in traditionally male industries such as IT, banking or engineering.

Of course the whole point of having more diverse boards, with different expertise and backgrounds, is to encourage debate in board meetings and more transparency of information, which is supposed to lead to better governance, innovation and management of risk. Having to explain issues to people who are not expert in your company or industry can help uncover unthinking assumptions and bring fresh perspectives.

Japanese companies in the UK banking and insurance sectors have come under heavy scrutiny from the UK Prudential Regulation Authority recently. The PRA has the right to interview and approve the appointment of directors to financial sector companies, and also to see the “board pack” (documents for the board meetings) and minutes of the meetings.

Newly appointed Japanese directors have found it very difficult to answer the standard PRA question “why did you choose to take up this role?” when in fact they were simply told to become a director by Japan headquarters. Most board meetings in the UK just rubber stamped decisions made through nemawashi outside the meeting, so the board pack and the minutes were minimal, and in Japanese.

As board diversity increases in Japan, hopefully Japanese companies will become more used to providing a greater quantity of information and more transparency about decision making, which will help the boards of their overseas subsidiaries function better too.

This article was originally published in Japanese on 8th July 2015 in the 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.

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Shazai and the art of being a corporate shame magnet

I let out a quiet cheer recently when Mitsubishi Materials, a sister company to my old employer Mitsubishi Corporation, started down the road of apologising for using slave labour in WWII. I used to be on the receiving end of campaigns for apologies and compensation from British Prisoners of War (PoWs) when I was in corporate communications at Mitsubishi Corporation and had many debates with my Japanese colleagues on what the right response might be.

Mitsubishi Corporation is a completely different company now in terms of ownership and structure to the Mitsubishi conglomerate during the war. The founding Iwasaki family was, however, not only pro-British, but also Iwasaki Koyata, the President during the war, was liberal and progressive in inclination, and rather bravely (given that other business leaders were assassinated for not being supportive of the militarist coup) spoke out against the war. The view amongst many Mitsubishi people after the war was – it was the government that forced these actions on Mitsubishi then, and it was the government that rightly said sorry and paid compensation to the PoWs afterwards. If there was a need to punish Mitsubishi as well, then the fact that the Iwasaki family and most of the senior managers were removed from their posts and the conglomerate was broken up under the Allied Occupation is surely sufficient.

Why apologise when it is not your fault – and wouldn’t such an apology be meaningless, almost insulting anyway? Actually there is a word in Japanese for apologising when it is not your own personal fault, but some kind of collective acknowledgement of responsibility is needed – hansei. It means reflection on what went wrong, an expression of regret for it having happened – “it shouldn’t have happened” and, most importantly, a commitment to take action to make sure it doesn’t happen again. You can see why successive Japanese prime ministers who weren’t personally involved in the wartime government might have thought this word adequate, as it appears to reiterate Japan’s commitment to remain a pacifist nation.

However equivalent words with the same linguistic roots exist in Chinese and Korean languages and consequently, Chinese and Korean activists do not accept hansei as being strong enough. The problem is it doesn’t contain enough shame. Owabi is a stronger word for “apology”, and contains a character which involves the symbol for “household”. This was the word used by previous Prime Ministers Tomiichi Murayama and Junichiro Koizumi, in addition to “hansei”, when apologising for Japan’s actions during WWII. By saying owabi, you are being remorseful and acknowledging the shame brought upon your group – whether it be your family, company or country.

Whether current Prime Minister Shintaro Abe will or won’t use “owabi” in his speech marking 70 years since the end of WWII has added poignancy, because not only will he be recognising the shame brought upon Japan (which could argue with some justification that at least it didn’t vote for its fascistic government in the 1930s, unlike Germany) but there is a family angle too. Abe is the grandson of Nobusuke Kishi, a Class A War Crimes suspect who was never tried for his part in the Japanese occupation of Manchuria and the use of Chinese forced labour, and went on to become Prime Minister himself in the 1950s.

In societies with elements of Shintoism or Buddhism or Confucianism underpinning it, as in Japan, Korea and China, apologizing on behalf of your predecessors or ancestors is hard to do. Not so much out of a sense of unfairness, but because you are visiting shame upon their memory, when they are no longer alive themselves to deal with it, and so the shame will simply be visited upon you and your peers and family. It feels like an unproductive humiliation, to be forced to attack your forebears, whom you were taught to respect.

The more usual pattern in Japan is for the father or elder to apologise for the sins and errors committed by the junior family members. This was seen most recently when Akio Toyoda apologised following the arrest of Julie Hamp, his personal appointment as Toyota’s global corporate communications chief, for illegally importing opiates into Japan. He even referred to her as one of his own children and then apologised for causing consternation to everyone, rather than any breaking of the law. The words used were yet another way of saying sorry – taihen moushiwake gozaimasen – “there is no reasonable explanation/excuse”. With this he became the shame magnet, taking the hit for Toyota not having somehow prevented her from making a mistake.

Universalist Westerners found this apology perplexing. Their view is that she was an idiot for not realising what the law was, or a criminal for deliberately breaking it. She should therefore be punished, and then maybe can rebuild her career after redemption. Universalists believe the rules are the rules and apply to all, without exception, in contrast to particularists, who take each case on its own merits, depending on the relationships of the people involved.

The Judaeo-Christian view as represented in the Old Testament is somewhat confused – both stating that the sins of the fathers will be visited on the third and even the fourth generation, but at the same time making it clear that the person who sinned is the soul that must take responsibility and be punished. Modern Western ethics, while seeing it as unfair that future generations should be punished for past generations’ wrongdoings, also insist that current generations acknowledge the crimes of the past in order not to repeat them.

In this sense, there is a common thread between East and West. Shame and admission of past guilt are both mechanisms for making sure that the sin is not committed or recommitted – because it is not just you, but your sons and daughters who will suffer the consequences.

By choosing to apologise in English, in the USA, Mitsubishi Materials avoided an oriental linguistic and ethical minefield, for the time being. The question of whether or not Mitsubishi Materials should accept shame will undoubtedly come up when, as they have promised, they apologise to Chinese and Korean forced labour survivors. I sense they were able to start with the apology in English as a warm up to this, with coaxing from Yukio Okamoto, a retired diplomat and renowned smooth operator who is now an external director at Mitsubishi Materials. He does not have to worry about the shame brought on his predecessors, as he is not an insider, and he also probably made sure the word “remorse” was used in English. I would imagine he also understood well the Western mentality that it is not about a Buddhist sense of collective shame so much as a Christian individualistic need to confess sins, publicly take the punishment and thereby gain redemption, allowing all to move on. Or as popular psychology would have it, giving the victims a sense of closure, which will make everyone feel better as a result.

Post confession, there is a sense of relief and a way to move on and move forward – and that is why I cheered when I read the coverage of Mitsubishi Materials’ apology – everyone behaved with dignity and sincerity and there was a sense of positivity. The Japanese participants seemed to have overcome the fear that with shame, there is no redemption, it endures, and it affects the whole group.

The worry is that if the shame magnet-father figure is not strong enough, the wider society will keep pressing until a bigger magnet is found. This is currently being played out with Toshiba’s accounting scandal. Despite the top executives resigning, bowing down for a record breaking 15 seconds of shazai (another word for apology, which contains the character for sin or guilt) and using the word owabi, the pressure keeps on. Hardly a day goes by without someone in the media questioning whether the root causes have really been exposed and whether enough has been done to redress them.

When the Nikkei announced its acquisition of the Financial Times, many Westerners commented that the Nikkei gave Olympus too easy a ride for its financial misconduct, unlike the Financial Times’ investigative approach. Compared to Toshiba, Olympus is not as iconic a company in Japan, therefore there was less sense of a wider reaching shame. Toshiba, however, was one of the Denden Kousha ‘family’ (suppliers to NTT when it was part of the ministry of telecommunications) and continues to be very tangled up in government industrial policy – most recently in joint ventures with another shame magnet, TEPCO of Fukushima infamy, acquiring a majority share of US nuclear power company Westinghouse in order to promote Japanese nuclear power capabilities overseas. Hisao Tanaka, the President who led the apologies and resignations, is seen as the fall guy. Even though his predecessors also resigned, the worry is that the shame is not just on Toshiba, but the Japanese political-industrial nexus as a whole. As Mitsubishi Materials has shown, the industrial side of Japan is beginning to find their shoulders are broad enough to take the hit and move on, whether the political side is too, Abe is about to demonstrate.

Do companies have a social obligation to train employees?

I was surprised when the Japanese expatriate manager at a Japanese logistics firm told me recently that he thought British logistics was more advanced than logistics in Japan. When I returned to the UK after working in Japan for four years at the end of the 1990s, I remember thinking that there was a real business opportunity for a delivery service in the UK similar to Japan’s takkyubin. This thought came to me as I watched an enormous container lorry reverse very cautiously up the 19^th century narrow alleyway to my London apartment, when all they were delivering was a small armchair. Surely in Japan this would have been delivered in a much smaller van, and within a much shorter time frame, so I would not have had to wait in all day for delivery.

Thanks to the rise of internet shopping (the British are the biggest web shoppers in Europe, apparently) and also the liberalisation of postal services, takkyubin type services like MyHermes have now appeared in the UK. You can book a time slot for next day pick up from your house, online, and the prices are cheaper than taking it to the post office, for heavier items.

I assume that similar services are available from takkyubin companies in Japan, so I suppose what the Japanese logistics manager was referring to was the higher volume end of logistics in the UK – transporting large quantities of car parts across Europe, for example.

Although it is possible to get qualifications and even university degrees in logistics in the UK, all the British employees of the Japanese firm at which the Japanese manager worked were in agreement that expertise in logistics was only really developed through practical experience, over time, rather than learning the latest theories in the classroom. In that sense, they were much more in alignment with Japanese apprenticeship style “on the job” training approaches.

As the Japanese manager himself pointed out, the firm’s employees were very indigenous British. Normally when I do training sessions for Japanese companies in the UK who are in the financial or commercial sectors, more than half the employees are not British.

Maybe for those types of companies, attitude and ability to learn are more important than local market expertise, skills and experience. But for logistics and other traditional, highly skilled industries such as engineering, it is tempting to choose someone who already has the local understanding and the expertise and skills born of experience, rather than train someone up.

Such people are scarce in the UK and the rest of Europe however, and instead we have a stubborn youth unemployment problem, of young people who would rather do physical work, or work outside an office, but have not had the training or experience and cannot find stable jobs.

No wonder then that Hitachi Rail has teamed up with other companies to set up a new University Technical College in the north of England. Apparently they were worried they might have to poach employees from nearby Nissan, otherwise.

This article was originally written in Japanese for Teikoku 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.

Japanese companies need to pull up younger burdock roots if they really want to grow globally

Along with “tako tsubo” (octopus pot), another Japanese concept “gobou nuki” (plucking out burdock roots) used in HR has been deemed harmful to corporate Japan’s global prospects.

The term has been used frequently in the Japanese media recently, according to Masahiro Kotosaka, an ex McKinsey consultant now at Ritsumeikan University. In a recent article in Nikkei Business Online he points out that the recent appointments as President of Takuya Hirano at Microsoft Japan, Tatsuo Yasunaga at Mitsui & Co, Koji Arima at Denso, Tatsuya Tanaka at Fujitsu and Takahiro Hachigo at Honda have all been described as plucking burdock roots, as they are in their 40s or 50s, younger than normal for Presidents in corporate Japan. The average age of Japanese Presidents was 62 in 2014 (up from 61 in 2013), around 10 years higher than the global average.

The older age is of course partly explained by the continuation of seniority based pay and promotion in Japan – although Panasonic, Sony and Hitachi have all recently announced they are abolishing or looking to abolish this system.

The average age in Japan for a “kacho” (section head, the first managerial position in Japanese companies) is 38.6 and 44 for a “bucho” (department head, or General Manager) according to Recruitworks. In India, China or Thailand, the average is 9 years lower for kacho and 10 years lower for bucho. Even the US average is 5 years lower for both positions.

Kotosaka asserts that Japanese companies need to start pulling out younger burdock roots, people who might be future executives, and making sure they have early leadership experience. If this does not happen, the younger generations of Japanese will soon feel a big gap with their overseas peers.

Already Kotosaka has heard (as I have) from Japanese companies that they feel the utilisation of non-Japanese or external executives has increased and the presence of Japanese executives has faded.

The most notable example is of course Christophe Weber, President of Takeda Pharma, and his team of 16 executives, of whom 8 are non-Japanese and have come from outside the company and two are non-Japanese who joined through being executives in a Takeda acquisition. Weber had his first leadership experience at the age of 29 when he became a country manager at GSK. Carlos Ghosn of Nissan also became head of a factory at the age of 27.

My former employer Mitsubishi Corporation is mentioned as an honourable exception to the lack of experience given to juniors, along with gaishi (foreign owned) consulting companies and private equity firms. For such companies, people are the main asset, and it’s true I suppose that trading companies such as Mitsubishi that have now moved more towards acquisitions rather than trading, do afford ample opportunity for younger Japanese to take up management positions abroad. In practice though, I have seen many instances where the acquisition is left to manage itself, and the Japanese expat director mostly stays in the regional headquarters, processing paperwork to send back to Japan HQ, rather than hands on managing the business.

Why Japanese companies don’t use LinkedIn (but should)

I read in the Nikkei newspaper 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 network with 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 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 (in English), 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.

(This article was originally written in Japanese for the 9th April 2014 Teikoku Databank News, and appears in Shinrai: Japanese Corporate Integrity in a Disintegrating Europe, available as a paperback and e-book on Amazon.)

Japanese companies demand too much perfection

Okada Hyogo, senior manager at Microsoft in Singapore, sports what is known in Japanese as the ‘Regent style’ hairdo – apparently named after Regent Street in London, but usually known in the UK as a DA. He is photographed with his quiff, leather jacket and sunglasses for a recent interview with Diamond Online. He has written various articles for the magazine, including one entitled ‘60% is good enough’. The impact of Microsoft on his thinking is clear, in the way he recommends Japanese companies also adopt the “patch” mentality he saw in software development. “Aim for what is feasible, not the best”, was his lesson from his time working for Accenture in the USA.

He echoes a point I often make in my seminars about the Japanese pursuit of perfectionism, which is that the 80/20 rule kicks in when it comes to costs of making an effort. It can take 80% of effort, resources and time to achieve the final 10 or 20% to reach 100% perfection.

This might work in Japan where it is normal to work through the night to achieve “the best” but of course this kind of behaviour is not so well accepted outside of Japan. As Okada says, in some cultures a person who works late is regarded as someone who is not self disciplined. “They have a much stronger sense of priorities than the Japanese do.”

“Japanese are lacking individual ‘core values’. At Microsoft we have 6 core values upon which we base our daily work. They are ‘Willingness to take on big challenges’,’Integrity’, ‘Openness’, ‘Constructive self criticism’, ‘Accountability’ and ‘Passion’.” Akiyama Susumu, the interviewer and President of Principle Consulting Group responds that it helps to define your own core values if you interact with people who are different to you.

As for being able to speak English, Okada believes it’s not enough by itself – an open and forward looking mindset is needed. “You need to be interested in the other person, and be prepared to engage in discussion.” Akiyama says it’s tempting to become silent if someone else in the meeting speaks better English than you do”. Okada responds that he got over his own English complex when his boss said “you already speak English. What’s important is knowing what you want to say, and how you want to progress the discussion.” Okada’s recommendation, to those who are not confident about their English is to get to a meeting 10 minutes early and greet the other participants as they arrive with “nice to meet you!” or “Good morning!” – that way you get warmed up for communicating and also you ensure that you have a presence at the meeting.

Even in teleconferences he recommends getting a question in early like “when can I expect to finish this meeting?” as a warm up, otherwise you end up not saying anything. For presentations he uses physical warm ups like a few squat thrusts and also practicing his “Rs”.

Another tip for meetings is to get near the whiteboard and offer to write up the agenda and minutes on it. “That way you look intelligent and hardworking!”

He also recommends saying “Let me finish” and using your hands to signal this. “Japanese tend to preface their requests too much”.

He finishes by saying that Japanese companies don’t have a very good image in Singapore as employers, and this has an effect on the brand too. Japanese employers are seen as only promoting Japanese people, and demanding a lot of unpaid overtime. Products have too many unnecessary features which only appeal to Japanese, rather as Japanese companies unthinkingly promote uniquely Japanese ways of working – such as chourei (daily morning team meetings). There is not one Japanese company in the Singapore Top 100 employers chosen by students.

“Locally hired Japanese don’t last long. After 6 years I felt I was turning into an idiot, so I left”

A new employment category, the ‘limited permanent employee’ has emerged in locations such as Singapore, where there are many locally hired Japanese employees, according to Diamond Online. They feature an interview with an anonymous former ‘limited permanent employee’, Mr A, of a major Japanese securities house’s Singapore subsidiary. According to Mr A, the category was somewhere between a contract worker and a permanent employee, and involved being treated in a way that resulted in him leaving.

Diamond journalist Norifumi Yoshida believes this category looks like to catch on in Japan too, to keep a cap on the ever expanding, insecure and badly paid “contract staff” category, in accordance with the government strategy for revitalising economic growth, while at the same time being easier to lay off than the traditional permanent, lifetime employee.

Mr A had been working for a major Japanese manufacturer, and was posted to their Singapore operation. He left the company while still in Singapore. He tried to start up his own IT company, but that failed. Then he heard that the Japanese securities company was looking for an new IT manager so interviewed for the position and was appointed. He was 35 when he joined the company, on around Y3.5m (US$28K) which was at the higher end for Singapore. However the Japanese expatriate IT manager, also 35, was earning around 3 times this.

There were around 150 expatriates from the Japan headquarters, including around 20 general managers who were in charge of the front and back offices, aged around 35 to late 40s.

These 20 had graduated from Japanese universities and joined the securities house straight after graduation. They had worked in Japan for 10 or more years and spoke good English. They initiated sales of securities or bonds and negotiated with local Singaporeans. They were also in IT or accounting or finance. They were good all round players but not professionals or specialists.

There was a second group of people amongst the 150 or so ‘permanent staff’, the front office people – 40 or so traders. They were ‘Anglo Saxon’, types who had worked for American or British firms previously, usually having been transferred to Singapore with those firms. They frequently changed employers, in some cases up to 10 different employers. There were a few Japanese traders, but most of them were not, and they were mostly rewarded through commissions and were often paid more than the Japanese expatriates – several hundred thousand dollars on average.

Mr A is not against this as such – in fact he points out that without these kinds of salaries, it would not be possible to hire highly skilled people, and if the company tried to stick to old ways of equal pay for all, it would surely collapse. Yoshida wondered whether Japanese companies aren’t using this as an experiment, and soon this system will be imported back into Japan.

Mr A felt the unfairness was more around how the third group of ‘permanent staff’, the ‘limited’ permanent staff, were treated. These people were mostly locally hired Singaporeans, on low level jobs, and accordingly paid low wages, with no prospect of promotion or transfer. At such low wages, it was not possible to hire high quality local staff anyway. The head of the IT department was Singaporean, and of the 12 staff in the department, 2 were Japanese expatriate staff and of the remaining 10, Mr A was the only locally hired Japanese. “Locally hired Japanese don’t last long. After 6 years I felt I was turning into an idiot, so I left”.

Both Mr A and the interviewer agree that treating all limited permanent staff the same way, without opening up any opportunities or pay rises to the more high potential or high performing staff will result in more dissatisfied and overworked locally hired specialists, who will keep quitting their Japanese companies. Mr A clearly feels very bitterly about generalist lifetime employees, who have no specialist knowledge of IT, being paid three times as much as him, plus expatriate allowances. “Globalization means the company has to become more focused on competency.”

Personally, I’m not so sure this is a new thing for Japanese companies in the global financial services sector. I remember a friend of mine from university being warned after he joined a Japanese securities house in London in the late 1980s, that locally hired staff were either “whores” or “coolies”. And locally hired staff in Japanese companies in quite a few sectors will ruefully recognise the “no prospect of promotion or transfer” limited permanent staff category.

The most popular location for a European HQ

I’ve just been updating our Customer Relationship Management (CRM) database of Japanese companies and their suppliers in Europe. I recently shifted the database to a new cloud-based provider, which enables me to cross reference our customer data with social networking sites such as LinkedIn – a very popular business networking site across Europe and the USA. The way our new CRM interface works has also forced me to focus much more on how our Japanese corporate clients are organising their operations across Europe, including where they have placed their headquarters.

My conclusions are not entirely scientific, as my own business is based in the UK and therefore biased towards UK based Japanese companies, but it does seem that the UK is the most popular base for European headquarters of Japanese companies. Of the 96 European headquarter companies I have identified in my database, 53 are in the UK, 24 in Germany, 10 in the Netherlands, 5 in Belgium, 2 in France, 1 in Switzerland and 1 in Poland.

Of course there are many Japanese companies who do not have a European headquarters, but the trend among those who have been in Europe for a longer period is unmistakably towards consolidating across Europe in terms of functional areas such as purchasing or HR or finance. This seems to be to the benefit of the UK, which is the undoubted European if not world capital of professional services – with many globally capable financial, marketing, legal, consulting and HR firms in London.

The UK has long been a favourite destination for Japanese foreign direct investment, for various reasons ranging from the English language, to golf to the UK’s open economy. Germany has also been very popular, particularly with Japanese engineering companies who feel an affinity with German process orientation and risk aversion, as well as having historical ties such as Fujitsu with Siemens or Denso with Bosch. The North Rhine Westphalia region was particularly active since the 1960s in encouraging Japanese companies to set up there, although Sony decided initially to set up in Berlin, largely, it was rumoured, because of Norio Ohga’s love of the Berlin Philharmonic.

More recently, the Netherlands became popular because of the tax advantages offered, and also, along with Belgium, was an obvious logistical centre for Europe. Lately, however, there seems to be a shift of these headquarters to the UK. Canon has moved from the Netherlands to Uxbridge, near London. Denso and Bosch recently announced their break up, and although Denso continues to be headquartered in the Netherlands, there seem to be several senior managers with European roles based in the UK. Fujitsu and Siemens parted ways in 2009, with the Fujitsu European operations being split between Continental Europe, the Nordics, and UK and Ireland.

Sony sold its Berlin headquarter building in 2008 and is currently in the process of consolidating its sales and marketing across Europe, to be based in Weybridge, a few kilometres south west of London. However, it seems to be shifting towards a “virtual” European structure, with shared HR services now set up in Turkey, and individual senior executives with European remits being based in whatever location they prefer. This pattern has also become evident in other IT and telecoms companies such as NTT Data.

Even this virtual European company structure seems to benefit the UK the most, as senior executives of all nationalities are can be found in, or seem relatively happy to relocate to, London and its suburbs. With more than 40% of London’s population were born outside the UK, London has truly become a global capital and a place to develop global careers.

This article by Pernille Rudlin originally appeared in Japanese in the 10th April 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.

Famous in Japan, utterly unknown in Europe

25 years ago I became one of the first ever graduate trainees at the London office of the US public relations consultancy Burson Marsteller. Burson Marsteller told me they were starting various joint ventures with Dentsu in Europe, so it seemed like a great opportunity to use my interest in Japan and my communication skills to support Japanese companies who had been arriving in Europe in increasing numbers in the past decade.

PR in Europe at the time was mostly staffed by ex journalists, focused on producing press releases, and wining and dining journalist contacts so they would write favourably about clients. Changes were in the air, however, which is why major PR consultancies like Burson Marsteller were starting to hire and train new graduates to be “communications professionals”.

In the late Eighties, the Big Bang revolutionised the City of London’s investment banks and stock market, and nationalised industries were being privatised. I was assigned to a corporate PR team, looking after British Gas (which later became Centrica) and a building society, which was thinking of floating on the stock exchange.

They were both facing the new pressures on companies to communicate to stakeholders. Not just to their new shareholders, but also to the communities in which they operated. They needed to show they could still be trusted, even if they weren’t owned by the state, or by account holders. There was also a need to polish their reputation so they could attract high potential graduates.

Japanese companies in Europe have the same needs – now as they did then – but unfortunately I do not think much progress has been made these past 25 years. There are so many companies which are famous in Japan but are either utterly unknown in Europe, or the name is familiar, but there is no notion of what they do, or whether they are good corporate citizens.

Nothing came of the Dentsu joint venture twenty five years ago, but I see now that Dentsu itself has started acquiring companies in Europe and other Japanese PR and advertising companies are strengthening their presence here.

Not only do Japanese companies have foreign shareholders to keep happy, but if they are to succeed in overseas social infrastructure projects, they must ensure that the communities affected are informed and welcoming, and that the best overseas graduates view them as a prestigious place to work.

This is not just a Japanese problem – I recently participated in a survey which I assume was commissioned by Siemens. The survey asked whether I knew that Siemens had been in the UK since 1843, was one of the largest graduate employers in the UK, with 12 factories, and involved with all kinds of sustainable energy and infrastructure projects. I was ashamed of my own ignorance of this, but amused to see that one of the competitors they were benchmarking themselves against was my old client, Centrica.

This article was originally written in Japanese for Teikoku Databank News and also appears in Pernille Rudlin’s book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.

Power harassment in foreign owned companies in Japan – “irresponsible egotism”?

‘Power harassment’ is a term that has been coined in Japan, in English (as ‘pawahara’ for short), to describe the kind of psychological bullying that may happen to junior staff in Japanese companies, primarily because they do not have the protection of a clear job description that outlines their duties and working hours.

Consequently, you would not expect to find it in Western owned companies (known in Japan as gaishi) where there is supposed to be a clearer set of expectations, job descriptions and performance based evaluations.

According to Diamond Online, however, there are cases of power harassment in foreign owned companies in Japan. Diamond journalist Norifumi Yoshida interviews a 50 year old IT manager, Mr A, who left his foreign owned finance company through power harassment arising from being caught in a battle between a Japanese and an American executive officer (director).

Mr A joined the finance company at the age of 45, having worked for four other foreign owned companies in the past. The first few years went by without incident, but then he found himself the target of attack by the Japanese director. Apparently this director had failed in his original intention to become an actor and was bullied by the troupe he had entered. Then thanks to his politician father’s connections he was able to join a financial services company, but was teased there too for having reached middle age without any competencies and left that too. Again through his father’s connections he found a post in the foreign owned company. Through assiduous sycophancy he managed to jump from team leader to director without going through the usual route of General Manager (GM).

Mr A was GM of the IT department and reported into an American director so should not have had to cross paths with the failed actor, who was responsible for 15 staff in PR, HR and General Affairs. However there were overlaps between the departments, so whenever Mr A’s work affected the payroll or accounting systems, the failed actor would complain in front of everyone that he had not been informed and Mr A was ‘out of order’. In fact Mr A was just doing what he was told by his American boss, but clearly the American boss had not gained consensus from the failed actor.

The American boss was more concerned with doing what he had been asked to do by the President of the company. When Mr A was scolded, 10 or more times a week, for 20 minutes at a time in front of 30 or so employees, and made to apologise, for petty things he had no recollection of doing such as not greeting the director properly, he did not intervene.

The American director probably wanted a quiet life says Mr A, and not to fight with the ‘pawahara machine’ as the Japanese director was known. The Japanese director was on good terms with the President, and was widely thought to be in line for promotion to managing director/board director in a few years, says Mr A.

The President was a Chinese American, who had been brought in by a foreign venture capital company to restructure the company. Mr A says he did not intervene because he preferred to back the winning horse when there was trouble and Mr A’s boss was somewhat of a yes man to him, and probably hoped to get on the board himself.

Yoshida comments that most Japanese would think Americans are open minded, frank and fair, but in his experience “Americans who come to work in Japan can often be rather cold and dry – egoists, to put the worst slant on it – in some ways almost scarily so”. Mr A says he has experienced plenty of upstanding American bosses in his career, but there is definitely a tendency towards egoism and a lack of compassion. “Many of my Japanese friends tell me Europeans are better. I think Japan was a bit brainwashed about America these past 60-70 years but now we have suddenly woken up.”

“Just being able to speak English is not going to be enough for Japanese people to succeed in a globalizing world” says Yoshida. “There are more wily foxes amongst Americans than amongst Japanese. Japanese are too trusting of people and do not know to be suspicious.”

Mr A points the finger at the executives of the company having no understanding of how to look after or create a structure that looks after mid career hires. “They have no sense of responsibility to the people below them, and just insult those employees who leave by saying that they ‘weren’t collaborative’ or ‘she was more suited to housework’ That way they can justify their own management style, if they say it was the fault of the people who leave. Performance based systems (seikashugi) are just a tatemae (a front) for an irresponsible egotism.”

Clearly Mr A is still very traumatised by his experience – still refusing to go anywhere near his old employer. To me, it seems less about whether the company is foreign owned or some difference in character between Americans or Japanese. I certainly recognise those kinds of selfish management behaviours, but usually they are kept in control by HR systems which result in negative consequences for those bosses who do not make efforts to develop a supportive environment for their employees. Western bosses often have employee engagement, retention and training and development targets as part of their annual evaluations. Also HR departments usually conduct exit interviews with staff who resign, to make sure there is not a major problem that had not been aired before. I suspect the foreign financial services company was actually too old-fashioned Japanese, not too American, in not having those mechanisms in place for its own management team. But as it was the ‘pawahara machine’ that was heading up HR, maybe that’s not surprising.

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