Corporate Governance

Sumo or Judo: how Japanese firms embrace or exclude diverse staff

I miss not being able to see the hatsu basho (January sumo tournament) that is now under way in Tokyo, as they don’t show sumo on the television here in the U.K. anymore. It would be great if Harumafuji, the new Mongolian second ranked ozeki, does well*, but it seems this year will be another challenging one for sumo’s credibility, particularly in the way it deals with the foreign rikishi wrestler.

When I was still working at my Japanese company in Japan, trying to develop and implement policies to improve the career opportunities for our “foreign rikishi,” in other words our non-Japanese employees, we had many discussions about what we nicknamed “sumo vs. judo” problem.

The sumo vs judo problem

In a “sumo” company such as ours, the traditional view was that in order to become a senior manager, you needed to join the company (the “sumo stable” or beya) at an early age and spend several years doing menial jobs, pouring the beer for everyone and living in a company dorm.

The sumo equivalent would be cleaning out the sumo beya stable, making chanko nabe stew and undergoing grueling training. So if any foreigner wanted to become a manager, that was fine, but they had to have undergone the same process as other Japanese employees.

Learning the “kata” – knowing the form

As for training, this was mostly on the job, learning from your seniors, as indeed in sumo, where the kata, or form of sumo, is learned by observing others rather than through any formal guidance or manuals. In fact, there weren’t many manuals or formal appraisal processes at all in our company. People just “knew” how to behave and what was expected of them.

For many Japanese companies, this changed in the 1990s. This was partly due to the restructuring needed to deal with the slowing down of Japanese economic growth, but also a recognition that the Japanese company had to become more diverse, not only in terms of nationalities, but in the gender and career background of its staff. It was not only the foreigners that objected to being treated like sumo, but other Japanese people, particularly in the younger generations. Also, the vagueness and lack of transparency often led to cover-ups, verging on what could be deemed corrupt practices.

No point in forcing conformity to the Japanese way on diversity

If you force diverse groups of people to conform to one mysterious way that can only be learned through many years’ apprenticeship, a way most easily learned by a group who share one particular cultural background, then those who deviate from this norm will find that, despite their best efforts, they are only a pale imitation of the mainstream group.

In other words, if you want all employees to behave like traditional Japanese salarymen, then hiring people from nontraditional groups is pointless, because they end up being unhappy, fake Japanese salarymen, or, more likely, quit.

My colleagues and I contrasted sumo with judo, which is also a Japanese origin sport, and has much of the same Japanese ethos regarding the importance of kata and diligence through practice, but is much more transparent in its rules and its teaching methods, a prerequisite, I assume, for it becoming an official Olympic sport for the 1964 Tokyo Olympics. I have to say though: I find sumo more charming and fascinating than judo.

* Unfortunately he didn’t. He made a majority of wins 8 to7, and did better in the March tournament that has just ended – 10 wins to 5 losses.

This article by Pernille Rudlin originally appeared in the Nikkei Weekly.

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Subtle factors that motivate workers differ in Japan and the West

Every time a Japanese company acquires a Western company, there is a concern about how the Japanese organization will deal with the “high risk, high reward” culture that is prevalent not only in the financial industry but across many Western business sectors.

Actually, Japanese multinationals have been dealing with this issue for some years, and the solution has usually been to pay the local market rate. It does, of course, result in some anomalies. Presidents of Japanese blue-chip companies are paid only around 10-20 times the salary of the lowest paid worker, whereas at Fortune 500 CEO can earn anywhere from 300-500 times a junior employee’s salary.

So it may turn out that the Japanese president is earning significantly less than the foreign directors reporting to him from the acquired company. Lower down the ranks, more junior Japanese find that when they are posted overseas, they are having to manage locally hired hotshots who are earning salaries and bonuses that add up to the equivalent of an extra zero on the end of a normal Japanese expat salary.

Many Japanese working for foreign banks and consultancies in Japan have also been making 10 times the average salary in Japan. Of course, Japanese on traditional salary packages can comfort themselves with the thought that they have more secure jobs, especially given what has been happening recently. But I think there is a danger in oversimplifying this risk/reward trade-off.

Knowing that you won’t be laid off when times get tough, or conversely that you are being paid handsomely, is not sufficient for most people, Japanese or Western, to feel completely fulfilled and motivated in their work. These factors may ensure people stay in their jobs but not that they perform those jobs to the best of their abilities.

High salaries and bonuses are in some ways proxies for the things that really motivate people to work. Being paid well should indicate that an employee is doing something that has had a major impact on the company. It should also reflect the employee’s authority and responsibility to make an impact. Getting quick raises should show that one’s career is advancing and that one’s skills and capabilities are developing.

These are all drivers of engagement – pride and motivation in work – for people working in Western companies. Surveys show that the drivers of engagement for Japanese people working in Japanese companies are subtly different. Career advancement opportunities and ability to make an impact are important, but so are other factors – immediate personal relationships, having input to department decisions, and having a manager who understands what motivates each employee and who has good relationships with them.

All people, regardless of nationality, want to feel recognized for making a positive difference in the world through their work. For many Japanese, the traditional way to do this has been through becoming a longtime respected member of a major company. For many Westerners, this route does not exist, so impact on society has to be more visibly rewarded through pay or status.

Japanese and Western companies need to avoid two extremes when trying to combine corporate cultures. Paying people well but not giving them the authority to make an impact and advance their careers will eventually lead Westerners to leave a company. Offering lifetime employment but without good, enduring personal relationships and mutual respect may mean that although Japanese employees stay, their morale is low.

This article by Pernille Rudlin originally appeared in the Nikkei Weekly.

This article appears in Pernille Rudlin’s latest book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” available as a paperback and Kindle ebook on Amazon.

In Japanese business, apologising for others can be sincere

A manager in charge of the customer call center serving North America, told me last week that she trains the call center operatives not to say ‘sorry’ when they respond to complaining customers. I assumed this was because in the US, saying ‘sorry’ would be seen as an admission of fault, compromising the company in any future law suit. It turns out this is not the only reason. “American customers don’t want to hear ‘sorry’,” she said. “They think it’s not sincere, and in any case, it is not the operative’s own fault, so why should they say sorry?” “What do American customers want, then?” I asked. “Resolution” she said, and added that operatives are also told to ‘acknowledge’ the complaint, and make some kind of empathetic statement, to show they realise that the customer has had a bad time.

This discussion of the American approach to customer complaints came up because I was describing in a training session what I thought was the right approach to dealing with mistakes in a Japanese context: say sorry, don’t make excuses (iiwake) and describe how this mistake is not going to happen in future (hansei, which literally means ‘reflection’). I was contrasting this with the British approach, which is to say sorry, but in a transparently insincere way, and then to go into lengthy or pointless explanations of why the error occurred, which usually sound like iiwake to my and most Japanese people’s ears. An infamous example is the pre-recorded announcement you hear all too often British railways; “We would like to apologise for the late running of this train, this was due to the lateness of the incoming train”.

Often British customer-facing staff won’t say sorry at all, for the same reason that the American customer service manager gave, which is that they feel that because the mistake was not their fault, or in their control, they do not need to apologise. This is very different to the sense of collective responsibility that customer-facing staff have in Japan. They will say sorry, very sincerely, even if it is not their own individual fault, because they feel that they are part of the company that made the mistake, so they do have responsibility and could have had some kind of control or influence on the outcome. They also wish to say sorry for the customer having had a bad experience.

A few weeks after I took over a sales role in a Japanese company, we lost some business from an important customer. It turned out that over the course of at least a year, we had been delivering raw materials to the customer out of sync with their production schedule, and at a price much higher than our competitors. Instead of blaming me, my team leader (who was also new to the job) went with me to the customer, and together we bowed deep several times, said “taihen moshiwake gozaimasen” (literally – “there is absolutely no excuse for this”), promised to lower our prices and deliver at more convenient times. The customer let us have 20% of the business back, on a trial basis.

This article by Pernille Rudlin originally appeared in the Nikkei Weekly. This and other articles are available as an e-book “Omoiyari: 6 Steps to Getting it Right with Japanese Customers”

Category: Corporate Governance