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

Takeda’s first year of global openness, after 230 years as a ‘closed country’

I proposed last August that “a charm offensive on the Nikkei group of publications might be advisable” to help new Takeda’s first ever non-Japanese President Christophe Weber gain support, and The Nikkei Business’s recent voluminous special features on Takeda Pharmaceuticals’ globalization in its online and print editions shows I was not the only one thinking this.

The Nikkei’s stance seems broadly favourable, and can be summed up as “this might happen to you too – so you might as well be positive about it”. There will be plenty more cases where a globalizing Japanese company realizes that to expand overseas, they will need executives who have produced results in doing business in other cultures, rather than executives who are well versed on the internal workings of the company but know nothing of the world outside, says the Nikkei.

The key point here is not just “overseas experience” but actually having produced results. And this is going to be a difficult requirement to fulfil for the current upcoming generation of Japanese executives in major Japanese corporations, many of whom, even if they have overseas experience, have mainly been in caretaker and liaison roles, rather than growing new businesses.

The special feature articles go into some interesting detail on the key personalities and what has actually happened at Takeda over the past few years. At the heart of it is Tachi Yamada, brought in by President Hasegawa in 2009 as a member of one of the executive committees and then to head up the R&D function. Tachi Yamada has dual US Japan citizenship and is a well known name in the pharmaceutical industry, latterly heading up the Global Health Program at the Bill & Melinda Gates Foundation. He has also been a board member at GlaxoSmithKline, and it is his network that led Hasegawa to Weber and others.

Yamada saw the need to find new drugs as the Takeda pipeline was thin and many of its drugs were going off patent. So he completely overhauled the structure of the organisation and embarked on some acquisitions. Another key person brought in by Hasegawa was Paul Chapman, also ex GSK, who has taken Japanese citizenship (and has a Japanese wife) and changed his name to Tetsuyuki Maruyama.

Maruyama interviewed each of the Japanese executives asking them why they thought they were suited to the role. As a result of this, 35 younger researchers were promoted to management, including 10 women where previously there had been none. 60 managers left the research function including one of the founding Takeda family members. Of the 6 Drug Discovery Units, 5 are headed by non-Japanese.

Yamada will retire this year at the age of 70 and his successor as Chief Scientific and Medical Officer will also be a non-Japanese outsider – Andrew Plump from Sanofi. Of course, this is causing disquiet amongst the Japanese staff – “Japanese can’t get promoted, if more and more foreigners are appointed. And they are earning many times our salary. It seems like just being Japanese is a minus in Takeda now”.

To counter this, one of the Japanese executives, Shinji Honda, who had been seen as a candidate for next president instead of Weber is now heading up a global leader programme for Japanese employees. “I want them to experience overseas business 5 or 10 years earlier than I did”, says Honda, “then they can be the next leader or the next leader after that, to succeed Weber. This is my last big job.”

But as Akie Iriyama of Waseda Business School points out, another area that will need to be addressed is for non-Japanese to join the company at middle management or lower levels too, and to bring more of the employees of overseas acquisitions to come and work in Japan, otherwise there will be too big a gulf between the non-Japanese executives and other levels of the organisation.

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“White hands, yellow hands” – the early days of IBM Japan

Takeo Shiina became president of IBM Japan in 1974, at the age of 45. He joined IBM Japan just after studying in the US in 1953. “In those days, gaishi (foreign owned companies) were seen as bad. A major newspaper wrote a series called “White hands, yellow hands” basically saying white handed gaishi were “dirty” and that they would disrupt the markets in Japan, make lots of money and take it all back to the US.

“The Ministry of International Trade & Industry also did all they could to support domestic computer manufacturers. They passed a special law so that the amount of tax that IBM Japan paid every year was recycled into supporting Fujitsu, NEC and Hitachi.”

Shiina took the brave decision to study in the US, after graduating from Keio University because his father had also studied abroad, in Germany, and so he was not afraid of becoming a foreign student. As for joining IBM, the auditor of his father’s company knew the President of IBM Japan and suggested it to him, He trained at the IBM plant in Canada and was shocked when he returned to Japan, to find that IBM Japan’s main office was in the middle of a bomb site. The factory was also just an old Japanese house, with a strong smell of a cesspit toilet as you walked through the door.

Shiina became head of the factory at the age of 32 and started a new site up as well as inadvertently offering the first ever online system to a steel factory. He assumed that IBM must be doing that sort of thing in Europe and the USA, but actually it turned out there was nothing to copy.

The contract was also tricky, in terms of persuading IBM HQ in the USA to accept it. Due to a mistranslation of “this is no problem in Japan” as “in Japanese this is no problem” IBM HQ finally accepted it, as noone could read the original Japanese anyway.

Shiina is proud that IBM Japan is now seen as a desirable company to work for, particularly in terms of opportunities for women, and having performance based pay. His interview with the Nikkei Online, the basis of this precis, is illustrated by his calligraphy which reads “Building a new country – young people, women, regions, foreigners”.

What I think about Japanese employee engagement – it’s all in the family

Somebody writing a white paper on the reason for low engagement amongst Japanese workers contacted me this week with some questions, which I answered (possibly in more detail than was helpful!) as follows:

As you may have gathered from the articles I have written, I am cautious about applying Western standards, using surveys which are basically translations of (usually American) methodologies and materials, to Japanese companies.

Whenever I find something that is puzzling about Japanese companies – in this case that employees in Japanese companies have consistently lower engagement levels than companies with other countries of origin – then I use the framework developed by Fons Trompenaars and Charles Hampden-Turner, in Riding the Waves of Culture, which classifies Japanese companies as “Family” type companies, as distinct from Missile type companies or Eiffel Tower type companies or Incubator companies. Please see http://changingminds.org/explanations/culture/trompenaars_four_cultures.htm for a summary.

For Family type companies, the primary motivation is to put food on the table and look after the members of the family, and secondarily the long term survival, and therefore the reputation of the family and its acceptance by the community in which it is based. In Missile type companies motivation is more about success – personal and the company’s and therefore being materially rewarded and recognised for your contribution to that success. Eiffel Tower companies are about believing in and executing the strategy and being rewarded through promotion/status. In an Incubator company, your motivation is self fulfilment – to have a job which makes the most of your skills and interests, and make a difference or do something new.

If you think of Japanese employees as members of a family, and replace “company/employer” with the word “family” then you can quickly see that they will have trouble answering questions in employee engagement surveys which are more suited to Missile, Eiffel Tower or Incubator companies. For example, “would you recommend your family to others/are you proud to tell people you belong to/work for your family” – when it would be seen as boastful to tell others what a great family you have, particularly for modest Japanese people – and traditionally it’s been very difficult for people to join big Japanese family style companies later in their careers, so why would you recommend it to your friends? You wouldn’t say – hey why don’t you leave your family and be adopted by mine?

Families all pull together, nobody expects to be rewarded individually, and if they were this would cause big arguments and accusations of favouritism. So again, there is likely to be a negative to neutral response about being rewarded or recognised or able to make an individual contribution/impact.

Families don’t have strategies, mission and purpose other than, as I said above, long term survival and protection of their reputation. So questions about whether you understand the mission and purpose and strategy will be tough to answer. Japanese employees are used to doing what they are told by mum and dad, and the mission of the family is implicit, not explicitly explained.

So if you asked Japanese employees different questions about their motivation, like “do you feel confident or secure that your company will look after you and your family in the long term” or “do you believe your company acts in the best interests of the community and therefore gives you the opportunity to contribute to the community too” then they might be much more positive.

Even questions about teamwork are tough to answer for Japanese employees – you would expect your family to be supportive and work well together because you know each other so well, so Japanese companies don’t spend much time thinking consciously about teams and individual roles within those teams. They are also, like families, very well aware of each others’ flaws and also the flaws of their seniors – mum and dad – who are the leaders but also just ordinary people who happen to be older – you didn’t choose for them to be your parents.

So Japanese do tend to be highly critical of each other and their companies in general – but just like families, are extremely defensive if someone outside the company/family tries to criticise it.

Overall, I would say, even if you asked more culturally sensitive questions in an employee engagement survey, (by the way, even the word ‘engagement’ has no direct translation into Japanese), you would probably still uncover a motivational problem. Japanese companies have gone through a very tough 20 years. Many of them are still struggling to find their “raison d’etre”, and are having to make unpleasant decisions about axing businesses, which means that their employees do not feel as secure and protected as they used to, nor do they feel that their company is making the contribution to society it used to. Plus the number of “contract” staff has increased to over 30% of the workforce now – these are not members of the family, and have none of the benefits the family members do.

Even the family members are being forced into taking very early retirement (basically redundancy) and the younger family members are wondering whether staying inside the family until retirement is quite as attractive as it used to be – as so many are not getting married or having children, they have less need for a secure and protective employer.

What we did at Fujitsu was to refresh the values and vision, to try to come up with something that made sense inside and outside Japan. We communicated them internally and externally, with a new visual identity and some very emotionally driven advertising about contributing to society through supercomputers etc. Interestingly, the Japan side of Fujitsu were not so keen to have workshops about the values and vision but the one thing they did do was to compile a book of stories of individual employees, – called something like “the power to challenge” in Japanese, translated into “Fortune Favours the Brave – the Fujitsu Way”. So it was celebrating individuals, but again in a very family type way, which is to create some new inspiring family myths/stories.

I think this is what Japanese companies have to do – they usually have some great stories about what the founding fathers did – they need to revisit these, but also develop some new stories about the younger generations. That should help employees feel more motivated – about their ability to contribute individually but also that the company/family can do great things as a whole – in the future, not just the past.

Families like to tell good stories!

If you want a different perspective on this, you may want to speak to my US colleague, Rochelle Kopp, the founder of Japan Intercultural Consulting – she has just published a book in Japanese on why Japanese employee motivation is so low, and I think an English version is due soon. She takes a more HR systems approach – her basic point is that “jinji idou” – the rotating staff system whereby employees have no say in where they are posted – is a key demotivator.

Japanese corporate vision – pointing at the moon or a finger in air?

We are coming to the end of the final quarter of the financial year for most Japanese companies. There will be a greater sense of urgency than in previous quarters, not only to make the numbers, but also to find tangible proof that the strategies in place are the right ones, or if they are not, to draft some radical proposals for the President to make at the end of April, when the year’s results must be declared.

It’s a predictable part of the annual cycle, but I sense that in recent years, the feeling of crisis is stronger than ever. So many Japanese companies understand that their very existence on the global stage is under question and the cheaper yen will only provide temporary respite from this.

The usual bottom up accumulation of midterm plans, based on projections of the previous years’ sales, a chat with customers and ”putting a finger in the air”, all jammed into several A3 sized sheets of paper, won’t do this time.

Some companies will announce, or already have announced, radical restructuring plans, but behind such plans is still the huge question of why the company exists at all – a question that most Japanese companies take very seriously, as so many believe that contributing to society, not just by keeping people in employment, but by making a positive impact on the future shape of the world, is at the core of their being.

This means they have to venture into the touchy feely territory of vision, values and corporate culture. Something which I believe they are pretty good at communicating to customers and employees in Japanese, but not outside Japan.

Words and numbers are not enough – there need to be stories, heroes and artifacts. Japanese companies have plenty of these, the question is how to communicate them globally.

One example is Alpine Electronics, the Japanese car audio manufacturer. The current chairman, Seizo Ishiguro, talks of how when he headed up the US operation, a cassette deck was returned to the company riddled with bullet holes by an unhappy American customer. The cassette deck is now in Alpine’s museum, as a reminder of how the key to Alpine’s survival in global markets is the highest possible quality and customer satisfaction.

This is a very tangible artifact, and a great story. Somewhat gentler is the brush painting bought by Sazo Idemitsu, the founder of the Idemitsu petroleum company, when he was 19, at an auction, of Hotei (often known as the Laughing Buddha) pointing to the moon. Apparently he often told employees to “look at the moon” (the big picture) not at Hotei’s finger (the details). In other words that Idemitsu was in the petroleum industry not just to make money, but to benefit society.

Intriguingly, in the painting Idemitsu bought, the moon is not depicted at all. It’s as if the artist is telling us to go and look for the moon for ourselves. The challenge Japanese companies face is ensuring that this kind of subtlety does not get lost in translation.

This article by Pernille Rudlin originally appeared in the Nikkei Weekly in January 2013 and also appears in Shinrai: Japanese Corporate Integrity in a Disintegrating Europe, available as a paperback and e-book on Amazon.)

A truly global HQ, where Japan is just one of the regions?

I mentioned in a previous article in this series that Japanese companies such as Fast Retailing and Rakuten are adopting English as their corporate language. In reaction to this, various surveys of Japanese employees’ attitudes to speaking English appeared in the media, including one that showed that 73% of Japanese are reluctant to have English as a corporate language.

Adding to this, another survey just released by the Sanno Institute of Management found that 67% of the businesspeople it questioned did not want to work abroad. The conclusion drawn by many Japanese commentators is that this is all part of Japan’s withdrawal from the globalized world. In particular there is a worry, shared by the Japanese government, that the younger generation have become more inward looking and cautious, and this will have a negative impact on the economy. My personal conclusion is that these reactions show that Japanese people rather enjoy agonising over surveys about themselves, particularly if the results show how different Japan is or are in some way a cause for gloom.

It seems to me any such trends are more related to economic factors than anything peculiar to Japanese society. There is not the urgency to rebuild the Japanese economy through export led growth that there was in the post-war decades. The slow death of lifetime employment means that younger people are less loyal to their companies and therefore less willing to go wherever their employers tell them.

Japanese companies have adapted over the past twenty years to the changing global environment. They expatriate fewer staff to the expensive developed world, relying on local managers instead, and have turned their attention to investment of capital and personnel in emerging markets.

The same trends can be found in the matured economies elsewhere in the world. The US used to have a mobile workforce, who would pack up and move state in search of a job, but apparently this is less true now, despite the persistent unemployment problem there. And although Europeans love pointing out how only 20% of Americans have passports, compared to 70% or so of the British population for example – it is noticeable how most of the migration within Europe is from Eastern Europe, rather than from Western Europe.

Rather than force reluctant Japanese employees to transfer abroad or adopt English as a corporate language, many Japanese companies are trying to globalise by encouraging employees from Asia to transfer to Japan or hiring Asian students who are studying in Japan. I suspect the expectation is that these employees will have to blend in as much as possible, however, so the impact on the Japanese staff in the headquarters will be minimal.

The worry then is that the non-Asian part of the business will become increasingly disconnected from Japan and Asia, with very little exchange of staff between the two regions. A radical solution might be to accept that the majority of Japanese staff prefer to focus on Japanese domestic sales, and split the Japanese domestic side from the global headquarters. This headquarters could be situated anywhere in the world, and yes, the working language will probably be English.

This article originally appeared in the Nikkei Weekly

“Japanese managers have been brainwashed by the West” and should aim to be ‘virtuous companies’ instead

An interview with George Hara, currently Chairman of Alliance Forum and former board member of various Silicon Valley start ups as a venture capitalist kicks off Nikkei Business’s attempt at finding a new standard for evaluating Japanese companies, beyond the shareholder capitalism model.

Instead of “Good/Best company”or “Great Place to Work” and all the other awards you can get, the Nikkei proposes ‘Yoi‘, which can be translated as ‘good’ but is probably better translated as ‘virtuous’. They even deliberately write the headline ‘Yoi kaisha‘ (‘Virtuous company’) in Japanese brush stroke calligraphy.

Hara doesn’t think the term ‘stakeholder capitalism’ quite covers what he and the Nikkei are getting at, even though he says the company should be measured on the benefit to employees, customers, partners and regional society as well as shareholders. He prefers ‘shachu‘ (which my dictionary translates as clique or troupe) or public benefit capitalism – meaning that all the concerned parties have a common objective.

He particularly criticises the way companies in the US – the home of full blooded shareholder capitalism – such as Hewlett Packard or Dupont find that putting shareholder interests first means firing people even when there are record breaking profits, or not being able to invest in long term projects to develop technologies which will benefit society.

Japanese corporate leaders used to be much more inclined to public benefit capitalism, and the cause is not lost yet, says Hara – citing that when he showed the great and the good of the IMF around Tokyo’s underground system recently they were full of praise for how clean, orderly and busy a city supposedly suffering from a 20 year recession was. Japan should be setting its own standard for the rest of the world, he feels.

Following on from this, Nikkei Business have come up with a Yoi company metric, based on profit, changes in employee numbers, corporate tax contribution and share price over the past 10 quarters for 3841 Tokyo stock exchange listed companies and the top 10 are:

Softbank
Fast Retailing* (Uniqlo) (Yanai, the founder and also board member of Softbank is quick to throw this back in the face of those who have termed Fast Retailing a “black company”)
Keyence
Fanuc (the current target of shareholder activist Daniel Loeb)
Yahoo
Aeon Mall
Rakuten
Mani (medical devices)
Japan Tobacco
Takeda Pharma *
Central Japan Railway
KDDI
ABC-MART
Sumitomo Real Estate
USS　(car auctions)
Astellas Pharma*
Toyota*
SMC (automatic control equipment)
Nakanishi (motor spindles, micro grinders)
Trend Micro (security solutions, founded in the USA, HQ in Japan)
Sysmex (healthcare)
Hisamitsu Pharma
Komatsu*
Terumo
Canon*
Honda*
Makita
Nitori Holdings (furniture)
Shimano
J Trust

Other of our Top 30 Japanese companies in Europe* in the top 100

Bridgestone #41
Denso #46
Sumitomo Electric Group #51

In our Top 30 in Europe but not in the Top 100 Yoi companies:

Fujitsu, Ricoh, Sony, Asahi Glass, NSG, Toshiba, Hitachi, Panasonic, NTT Data, NYK, Fujifilm, Olympus, Mitsubishi Chemical Holding, Nomura, Nidec, Sharp, Daiichi Sankyo, Kao, Seiko Epson

Germans, Japanese and Americans work the way they drive

Ulrike Schaede (Professor of Japanese Business at the Graduate School of International Relations and Pacific Studies at the University of California, San Diego) confirms something that I had wondered about a few years ago when I facilitated management development seminars for Japanese and German managers, in her comparisons of Japanese and German driving styles. As is well known, there are no speed limits on German autobahns. At the same time there is another well known aspect of German culture, that rules are obeyed to the letter – perhaps due to a fear that without rules, mayhem results. Yet fatal car accidents are relatively few in Germany – particularly relative to the US, which has by far the highest number of fatalities on the roads.

Fortunately Germans obey other rules on the roads, such as no undertaking, which keeps the accident rates down, but Schaede confirms that generally speaking, Germans are impatient and aggressive drivers. Rather like Germans you might come across in the service industry she remarks. The Japanese managers in the management development seminar had also observed this when they undertook some field observations in Stuttgart. Why, they asked the German managers, when Germans are normally so orderly and obedient, was there pushing and shouting amongst a group of waiting people, about who should be served first? The Germans considered this for a while and then asked “Was there a sign anywhere explaining how to queue?” Apparently there wasn’t. So chaos ensued.

Japan has the lowest rate of fatalities (and the UK is not far off from this either), and like Germany and the UK, there are plenty of rules and regulations which have to be learnt in order to pass a test to obtain a driving license. In the USA however, it is possible to drive at the age of 16, without much knowledge of the rules and regulations of the road.

She draws parallels with American entrepreneurialism – anyone can start a company in the US if they have an idea. So some succeed but many fail too.

There are 4 other driving styles she believes relate to business approaches:

1. Safety First

Just as fatalities in road accidents are low in Japan because of the “safety first” mindset, so Japanese companies with any reputation to protect will be very reluctant to take any risks which will jeopardise their name. The downside is that, just like Japanese traffic, things move slowly.

2. Reverse parking

I’ve noticed too, that in Japan, almost everyone reverse parks their car, even into the narrowest of gaps. Schaede says this is indicative of a mentality that says put the hard work in first, so things are easier later. Japan is a nation of savers for a rainy day [although this is increasingly less true according to statistics I’ve seen]. Japanese companies also put as much effort as they can upfront, in case hard times are around the corner.

My aunt and uncle, veterans of an army life in Northern Ireland, teased me mercilessly about my dislike of reverse parking – it had become second nature to them, I suspect because of the need to make a quick getaway in a dangerous situation. So it is risk aversion at work again too I would say.

3. Shut that door!

Japanese have an expression “handoa”, meaning half door, or in other words, a door not closed properly. Japanese take great pains to shut doors firmly in cars, so as not to cause irritation to the driver. According to Schaede, one of her Japanese friends was told by an American driver that he would not be allowed to get in the American’s car again if he slammed the door so hard in future. In Germany, slamming a door so hard would be seen as a criticism of the car’s quality. It’s the Japanese need to “be sure” – as Schaede says, there are some untranslatable Japanese terms for this like “chan-to” – children are often told to “chan-to” – in the way that Western parents might say “behave”, “sit up straight” or “pull yourself together”. It also leads to over-specification in business – good enough is not enough.

4. Self service

As Schaede points out, it took a long time for the concept of self service petrol stations to be accepted in Japan. It was as if even the highly educated, skilled Japanese population could not be trusted as individuals to safely fill their own cars up by themselves. Schaede thinks this is like the current wave of Japanese deregulation – everyone has to move together, no one company should make the change by itself, so everyone moves at the pace of the slowest, to avoid one person being sacrificed. I am not sure this is entirely true – if you look at the actions of Hitachi, for instance.

“Japanese employees must become faithful to their profession, not company” – Hitachi’s Kawamura

Maybe he was being spurred on by Chinese consultant and Softbrain founder Song Wenzhou, but Takashi Kawamura, former President and Chairman of Hitachi makes some startlingly radical statements in a dialogue in the Nikkei Business magazine.

Both agree that in 2015 major Japanese companies must grow for Japan to get back on its feet, particularly so they can pull Japan’s small-medium enterprises along in their wake. But although Kawamura maintains the traditional Japanese line that companies exist to add value to society by paying wages, taxes and dividends (in that order), he asserts that Japanese employees must learn to become “faithful to their profession” rather than faithful to their companies as they have been up until now.

This includes company Presidents, who can no longer be “the person who happens to be in the position of President” and use their status and personal influence to get things done, but instead must be judged on their results, and their professionalism as a manager. “Management has become more transparent, and the responsibility to explain has become greater” says Kawamura.

As blogged previously, Hitachi hit the headlines for abolishing seniority based promotion for its Japanese managers recently, with commentators speculating that this would spread to other companies, and may even mean the end of other sacred cows of Japanese corporate life, such as lifetime employment. Kawamura openly says other Japanese companies will have to adopt the same approach and that this will result in greater labour mobility – not just in the Japanese labour market, but also for swapping people across national borders within the company.

However “moving people is tough” and it will take time, with other aspects of Japanese society also having to change, such as education and social mores, Kawamura acknowledges. Hitachi itself is facing the challenge of ensuring it does not devolve back to a ‘village mentality’.

Song remarks that he tried to get a Japanese friend of his who was a General Manager in a major electronics firm to take up a better remunerated position at a start up but his friend refused, saying his daughter was getting married soon, and he wanted to be introduced at the wedding as “General Manager of XXX company” – the status he would lose if he joined a start up was too much to contemplate.

I hope the choice isn’t as stark as Kawamura and Song make out – an adapt or die dilemma between the mutual loyalty of the company and its employees resulting in stagnation, or ruthless professionalism and mobility, resulting in growth. Not everyone can or should want to work for GE.

“Without competition, people will not develop”

Japanese construction materials and sanitary fittings manufacturer LIXIL is an example of a Japanese company that has deliberately tried to introduce a spirit of competitiveness into the company, following its acquisition of American Standard and Grohe. A German now runs a division, and many Japanese now have foreign bosses. LIXIL’s CEO Yoshiaki Fujimori says in a recent Nikkei Business article “There is no real competition inside Japanese companies. The benchmarks for evaluating employees are vague, and people are assessed on whether they are good relationship builders or come from the same background. At the very least, with a foreigner as a leader, baseless evaluation criteria will no longer be accepted.”

Fujimori is himself unusual in that he started out at Nissho Iwai (now Sojitz) and then became the first Japanese to be an EVP at General Electric, before joining LIXIL in 2011. He underwent a typical egalitarian Japanese education, graduating from Tokyo University in 1975, but even at Nissho Iwai he thought he could beat most people in terms of performance. However when he studied for an MBA he found out what real competition was like. He found it painful that other students could express their opinions so easily when he could not say anything. So he devised a study routine of making himself review the day in 1 minute every day, and then listen to himself, 30 times a day. It was even worse at GE, he claims, where you always have to win every battle. “If you lose once, you lose your job.” At LIXIL he has tried to quantify job roles in order to set performance evaluation standards and introduced Executive Leadership Training.

Another executive in the same mould as Fujimori is Yoshiaki Itoh. Born in Thailand, and a graduate of Thunderbird Business School, he has worked at Dell, Lenovo, Adidas Japan and Sony Pictures Entertainment, before becoming CEO of Haier Asia. At Haier he was shocked to find that the Sanyo (their white goods business in Asia was acquired by Haier) ‘super egalitarian’ legacy lived on – there were 14 grade levels, and everyone took an exam every two years in order to be promoted. It was not possible to jump a grade, so to get to a management position would take nearly 20 years, no matter how good you were.

Itoh cut the 14 levels to 5 and made it possible to become a team leader without any reference to age. He also went round South East Asia, and sent 20 of the 40 Japanese expatriates back to Japan. He also intends to make the R&D centre stand on its own two feet. “Japanese companies have not grasped the fact that competitiveness is necessary to win on the global stage” Itoh says. He is intending to further clear out remaining notions of “competition avoidance” and “everyone the same”.

The Mitsubishi thoroughbred who was called an alien

“When I was called ‘the alien’ I was resigned to it, realising that the people around me didn’t understand what I was trying to do. However, recently it seems as if what I was saying then is gradually becoming understood.” Minoru Makihara, former President of Mitsubishi Corporation, recollects the time when he tried to make English the second corporate language in 1992 and was criticised from within and outside the company [disclosure – I had just been posted to Mitsubishi Corporation Japan HQ at the time, and later worked with Mr Makihara to deal with the fall out from these policies]. “It was partly a misunderstanding – I was saying that ‘Bad English’ should be the corporate language. Because if you do not express yourself, no matter how poor the English, then you cannot have a dialogue.”

“English is the international language of business, not just because it is widespread, but because it is most suited to business. English can be vague when necessary, and precise when needed. Nobody thinks Japanese is suitable for business – it’s far too implicit. However, even though English is a necessity, it is not sufficient for listening globally. You need a sense of your own roots, your own “-ism” to understand someone who speaks a different language to you.”

“I have proposed a third ‘Opening up’ for Japan to the government. Japan is lagging behind in globalization. By ‘Opening up’ I don’t just mean the issue of whether there should be more immigration, but that we Japanese are the problem.”

“Ultimately it comes down to education – a liberal arts type education. To work globally, you need be able to gather data and knowledge for yourself, and make your own independent judgement. So to open up Japan again, you need to start from there. Without this, Japan will be isolated in the world.”

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