Human resources – Rudlin Consulting

Learning from lockdown: What entertainment at a distance taught me about teaching at a distance

I’ve often felt that what I do as a trainer was similar to a stand-up comedy routine. Not so much that I try to make people laugh (although I do) but that I use the same tricks of the trade as a stand-up comedian – a core idea running through, the seemingly irrelevant anecdote that ends up making a key point, the call back at the end that reassures me and the audience they’ve been paying attention. I know I’ve had a good session if I’ve hit my marks – not in the literal meaning of standing in the right spot, but getting the rhythm and timings right, covering all the material, sensing the key messages have chimed with participants.

Watching some of my favourite entertainers cope with social distancing has been illuminating. It has shed light on the dirty secrets of how far entertaining or teaching at a distance can replace getting together in germ filled rooms.

The five dirty secrets of education and entertainment

I knew, but had not articulated, these dirty secrets to myself. I have struggled for around 20 years to make online learning and knowledge sharing work, believing it to be the future, but at the same time I kept having misgivings.

One of my favourite stand-up comedians, Stewart Lee, toured a show a couple of years ago called Content Provider – the brutal digital term for entertainers and teachers. As Lee pointed out in that show, the main way entertainers make money these days is by going on tour delivering the content in person, not from digital or hard copy sales. TV can be a steady earner of course, but Lee was never mainstream enough to attract consistently big bucks. He even supplements the revenue from tickets by buying up second-hand copies of his CDs and DVDs from charity shops and eBay and selling them in person at a profit in the auditorium after the show.

But, as he acknowledged in his most recent show, touring is exhausting, particularly as you get older. My fellow trainer in Germany in a recent Zoom call said she felt more relaxed than she had in some time, despite the lockdown, because she no longer had to travel so much for work. It’s not just the physical but also the mental exhaustion – you wonder if the same old shtick is going to cut it anymore.

So our training team is now discussing what the best way is to deliver our content, without so much travel, resilient to any social distancing, but still make money and stay fresh. Which is why we need to confront the dirty secrets head on.

My recent career has been in providing training to adult learners, but I come from a globally extensive, long line of teachers of all age groups. From talking with them about their experiences, I’m pretty sure that most of these dirty secrets apply to children’s education too.

The good news is that there are plenty of technologies when teaching or entertaining online that we are being forced to adopt which are worth continuing with even after we can all be in the same room again. The future is going to be a blend of online and offline presence.

The biggest dirty secret is that it actually costs quite a lot in terms of effort, time and therefore money to create good learning and entertainment that works at a distance. And yet the expectation is that it should be cheaper.

Why distance costs so much is due to the other dirty secrets:

1. We feed off an audience

This is why teachers are struggling to respond to the current crisis. They know that just slapping up slides online with your notes, or teaching a normal lesson via a webcam and providing a recording of it will not create effective learning experiences. But they don’t have the time to do much else.

The issue is not just participant engagement, but that bouncing off an audience is where teachers and entertainers get their energy from. You can spot when an audience is not engaged when you are in a room with them, and adjust accordingly.

When TV entertainers like John Oliver or Stephen Colbert initially tried to do their shows without live audiences, the result was very flat. You could see the desperation in their eyes. It was easier for team chat shows that transmitted live like Channel 4’s The Last Leg. They had already made use of Twitter in real time pre-COVID-19 to get audience suggestions and jokes from beyond the studio, so they made even more use of this to spark off their own interactions in the studio.

Even non-live shows are finding ways to use online tools to engage with their audiences – Graham Norton’s Red Chair stories are now delivered by audience members from their own homes, via their webcams. Many comedy chat shows have found that doing short interviews via webconferencing with celebrities, in their pyjamas, with pets, kids and other props, showing human frailties, can recreate at least some of the warmth and humour they crave.

For teachers and trainers the most obvious online tool to create engagement is polling. Polls can make sure people are paying attention, but also create a connection between participants and give the host a flavour of the needs and views of the audience. Webcams, Q&A and chat functions all help put the life back in to webinars – and yes, why not bring in props and pets too.

If you are creating learning that people consume in their own time, it still needs to be interactive – I’ve incorporated polls, quizzes and self-assessments into our online learning modules.

2. But they’re not that into you

If you haven’t got a live audience you can interact with, you need to keep it short, and break it up. Graham Norton’s TV chat show used to be 45 minutes long pre-Covid, but is now a tightly edited 30 minutes of a monologue, a brief interview, some music, funny clips and the Red Chair.

I view the online equivalent of our 3-hour classroom-based training course as being a 1.5 hour webinar – and I put a break in half way just as I would for a classroom based session. Similarly, our 6 hour, one day course can be delivered as two 1.5 hour webinars on separate occasions. The online modules can be taken in the meantime, allowing the second webinar to be more of a review and discussion.

It’s generally considered that 45 minutes is the maximum you can expect an adult to pay attention. I’d assume it’s even less for children and for those of us who are used to consuming social media in short videos and 280 character chunks.

But schools do seem very wedded to the idea that a lesson should take 35 to 45 minutes and that it’s an important life skill that children stay still and quiet for this time. I really resented being called into school to be told off for the fact that my son refused to sit nicely on the story mat for half an hour aged 5 or that he’d yell out the answer to a question without waiting until the teacher called on him. My suggestions that it was unreasonable to expect children of that age to stay still without some kind of interactivity, and that they would be better off asking open ended rather than factual questions did not go down well. But then I regularly got thrown out of my Japanese school aged 7 for talking in class. Japanese schools are even more one-way information teaching machines than British schools. Ironically, my son’s school reports now complain that he’s too quiet.

So 10-20 minutes for an online “class” is surely more realistic than expecting children to sit through a teacher talking on a webcam on Microsoft Teams for 40 minutes. This seems to be what my husband and his fellow teachers are now doing – everyone logs in, the teacher asks how they are and has a chat, explains the assignment and then lets everyone log out again and do the assignment in their own time. Getting them to hand the assignment in seems to be a whole other problem, however.

Realising that my audience is not that into me either, I recently re-edited all our online e-learning content so no video/screencast that I have narrated is more than 10 minutes where possible. The most popular YouTube video I have narrated is “Japanese Business Mysteries explained in 5 minutes”, so I will be doing more of those in the future.

3. They are paying for the certificate, not for the love of knowledge

But that brings me to the third dirty secret. Not only are they not that into you, they’re not that into your content either. They’re either learning because it’s compulsory or to impress their employers. If they’re school children or students, the main motivator is passing the exam.

This is where the analogy with entertainment ends, I suppose – we consume entertainment for insights, emotions and to know we are not alone. There is no certificate for this but therefore there is a limit to how much a person will pay to be entertained, and they are always looking for ways to get their kicks for free. Which is why I sympathised when Stewart Lee confiscated a mobile phone from an audience member trying to film his routine at the last gig of his I went to.

Teachers at my son’s school have been dutifully setting further reading, challenging maths problems and suggesting resources to prepare for university for the year group affected by the cancellation of the UK national A level exams. Only work before March 18^th will count towards the final grade, to ensure that children who are not able to access online learning are not penalised.

Despite the teachers’ efforts, I believe most engagement from that year group is through an app that one of them developed which automates logging in to Microsoft Teams – and occasionally they edit the message so it looks personal.

The only pure online training courses that sell are the ones that relate to compliance and are compulsory, or certify that you have acquired IT skills. This is the kind of knowledge acquisition that can be proved through online multiple-choice tests or online exercises. These courses generate a certificate for the learner and lots of lovely data on the company’s Learning Management System, to show what percentage of staff have taken the courses, passed the tests or said their work efficiency has improved, and then they can generate some kind of Return on Investment on training budgets to keep the CFO happy.

Individual learners are willing to pay for a certificate they can add to their CVs but otherwise expect content to be free. Massively Open Online Courses, or MOOCs, have a very high dropout rate. Coursera, an online learning platform mainly for university courses, has a business model based on exactly this understanding of the learner mentality. The University of Tokyo course on Japanese art and literature I took was free but they send you guilt provoking emails if you don’t complete each module within a certain time. If you want a certificate of passing and completion which you can load onto your LinkedIn profile, you have to pay. And so, although I took the course for the love of acquiring knowledge – reader, I paid.

4. It’s the stupid technology, stupid

Coursera have done a great job of making the user interface as easy as possible. This is where some of the benefits of being online come in. So long as firewalls and bandwidth do not intervene, it should mean greater accessibility to knowledge for people all around the world. Coursera videos are no more than 10 minutes long, each with a short quiz at the end to make sure you were paying attention. As well as the slides and a video of the professor giving the lecture, there is a transcript with a cursor indicating where the professor has got to in the lecture underneath the video. So if you haven’t quite understood, or your attention wandered, you can check back, rewind and pass the test.

Non-native speakers of English have been far more enthusiastic about e-learning and webinars than native speakers, in my experience. They like the multiple ways to absorb the information – slides, transcripts, aurally and offline. Native English speakers can help during live webinars by summarising key points in the chat function. The host also has far more control over shutting up domineering fluent speakers and making sure the shyer people are brought into the conversation – including through private chat if they’d rather not speak out publicly.

But – not everyone has the technology, bandwidth or budget to participate equally. Teachers at my husband’s well-funded private school have apparently broken down in tears from spending hours marking work online, only to see it disappear into the ether.

Maybe it’s their fault for not backing up, maybe the school has terrible connectivity, who knows. But it brings it home that things must be a hundred times worse for schools and homes where good technology and connectivity is just not affordable or people don’t have the technological knowhow to find solutions.

I realise this article may attract a lot of snark from specialists who have been studying interactive learning design for years, and know way more than I do about how to design learning paths and interfaces. In my defence, I did actually manage a team of people with that knowledge and AI programming skills, way back in the day. Our aim was to get away from directed learning and move towards self-directed learning. That is still my goal.

I attended various learning technology conferences too – where all too often a seminar entitled “making xml work in a corporate learning environment” or some such would end in a spectacular technology fail and blue screens all round. So yes, properly designed learning experiences are available online, but we are still a long way from the user or the technology being smart enough.

5. Fear of eating ourselves

This is the deepest darkest dirty secret. We worry that if we do too good a job with online content and the technology does improve enough, we will no longer be needed. Teachers and entertainers want to be needed, even loved – and this is what we get paid for. This is known in business as self-cannibalization – making a cheaper version of your product or service, which then kills your lifeline.

But we should not despair, there are reasons why eating yourself doesn’t work.

The social experience

If audiences can get the same experience from a CD, DVD or book, why do they continue to go to gigs, concerts, shows? Partly it’s the social experience – the thrill of being in a crowd of people who are going through the same emotions. The closest I have seen during lockdown to recreating the social experience of a concert is TimsTwitterListeningParty – where Tim Burgess of the 1990s group The Charlatans sets an album for everyone to listen to and tweet about in real time – but the real joy is that the original artist also tweets about the making of the record or photos of the band, in synchronicity to each track being listened to.

It’s also for the social experience that people still want to attend classes, despite moaning about being away from their real work. Even if children say they hate school, they want to be with their friends – and it’s usually because of a bad experience of being with others, such as bullying, that makes them hate school the most, rather than the teaching. And of course the teacher can do a lot to set the tone and clamp down on bullying.

Squirrel!

Preferring to be in a room with others in order to learn is also an acknowledgement that if you’re not trapped in a class, you are very likely going to get distracted.

Also, in the corporate world, I have found that even when I was on the receiving end of poor-quality training, just being away from the desk and having time to reflect had a value in its own right.

The best concerts, exhibitions or plays are where you feel fully immersed – “lost in another world.” It’s not so easy to do that at home where daily chores and worries intrude.

Applicability

A close second to being bullied as a reason for hating school is that it’s “boring and pointless”. In other words, children cannot see how what they are learning applies to their own life.

Many of the TV shows that have done well in the UK during lockdown are ones which allow us to live vicariously (and maybe thereby learn about) cultural experiences – Race around the World, The Repair Shop, or Grayson Perry’s Art Club

But not all teachers or subjects translate well to video, and learners still need to be able to interact with the teacher so that they can understand how to apply the knowledge to their individual situation. You can give individual attention and co-create online, but again numbers need to be limited to about the same as a classroom size, to allow proper 1:1 interaction.

Authenticity

The audience or learner wants authenticity – they can spot a mile off when a teacher or entertainer is phoning it in. This is why a lot of e-learning is so dry – actors voicing narratives about how to be a leader just do not resonate. The most popular YouTube videos are where the person is narrating in real time as they play a game. The first video that came up when I was searching for help on how to cut my son’s hair was a hairdresser in a barber shop cutting hair while explaining his technique.

We insist at Japan Intercultural Consulting that all our facilitators have authentic experience of working in Japanese organisations and also have lived in the counterpart culture. We also encourage our facilitators to tell stories from their own experiences during the training. Our participants need to feel that we have “been in your shoes”. But the only way we can be sure this happens is to interact with participants, to understand their experiences.

Apprenticeship

Parents are struggling trying to do home schooling and work at the same time. Schools were invented partly so people could go to work. Before universal education, only rich people could afford home tutoring, which then perpetuated the professional elite path of going to university to become a lawyer or clergyman.

The only way to work from home and teach your children at the same time if you are not rich enough to afford a home tutor is to teach them through the work you are doing. This was how craftsmen in the past educated their children – they were apprenticed to their parent or to another “master”. The modern-day equivalent would be getting your children to alphabetize your files, or helping you design a spreadsheet for your sales data – or in my case, getting them to edit and add subtitles to my videos.

Japanese companies are still resistant to classroom-based learning and even more so to working remotely, particularly for soft skills. The reason for this is that most Japanese companies are family style in mentality – learning is done through apprenticeship and on the job learning.

Extreme cleaning

I admit I already loved Tidying up with Marie Kondo on Netflix, but it wasn’t just because it added to my Japanese cultural expertise – my obsession with TV decluttering shows stretches back to House Doctor in the 1990s and lockdown has impelled me to binge watch Call the Cleaners. There is something very cathartic and inspiring about watching other people confront their fears and phobias, purge and then move on with their lives, and this is what I needed to do with online learning.

Although we may have a sick feeling in our stomachs about the threat of technology, teachers and trainers will never have to eat themselves. So long as we are authentic and know what we are talking about, then we can help the learner apply the knowledge for themselves, and recreate experiences. We can set scientific experiments, maths problems and history essays to be done away from the classroom, in the knowledge that they need a teacher to guide them and check the result.

If, like now, we can only teach online, then rather than trying to dump a mass of information online or learn how to build an interactive module, we should focus on creating good offline assignments that guide the learner as they explore, apply their new knowledge and recreate experiences for themselves. But learner numbers will be limited if this is to be supervised and checked properly. Ultimately, the cost per learner in terms of time and salaries is not going to be much cheaper than a classroom-based experience if the assignment is well framed and resources are properly curated.

A teacher or entertainer in a germ-infested room full of people is still the most cost effective and emotionally impactful way of transmitting knowledge, insight and experience. Our enforced isolation as teachers and entertainers should be a time to declutter, focus on what sparks joy and maybe add one or two new gadgets into the freed-up space.

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Farewell egalitarianism – Sony introduces salary gaps for graduate hires

A 25 year old Sony employee, with a postgraduate degree in mechanical engineering and skilled in multiple programming languages was promoted to job grade I3 within three months of starting at the company. This meant his salary was increased by Y50,000 (US$460) a month and he can also qualify for higher bonuses. This would not have been possible until at least two years had been completed at the company previously.

This new system was introduced by Sony this year, whereby ability and work effectiveness are assessed and a grade from I1 to I9 is assigned. Sony had already restructured its management level from 2015. 40% of all employees were in management grades, due to the egalitarian, seniority based promotion system, but many were “name only” managers. The “name only” managers were all demoted to non-management grades.

The mura mentality

Sony has to compete with GAFA (Google, Apple, Facebook and Amazon) for top talent, so the old Japanese mura (village) mentality where everyone is a member of the village, and treated equally regardless of their work content and where they work, with lifetime employment and seniority based promotion was not sufficiently attractive.

Now those who wish to join Sony can choose from 70 possible entry routes – those joining from university can choose 3 from the 70. It is not all controlled by HR as in the past – individual business executives are also involved in the recruitment process. They proceed straight to the job they have applied for, rather than go through a general training period.

But not firing

The Nikkei wonders how this will impact firing, not just hiring. With the Japanese mura system, the ability to dismiss employees is severely restricted. Sony has said it can demote or refuse to promote people, but it will not fire them. Keidanren, the Japanese employers’ association, says that while it is generally in favour of HR systems becoming more focused on role content and performance, it thinks the Japanese approach of reassigning people to other jobs if they are not performing in their current role is still preferable.

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Surviving the end of lifetime employment in Japan – if you’re an underworked uncle

Plenty of Japanese companies went virtual, scaled back, cancelled or postponed their entrance ceremonies for new graduate recruits this year, because of COVID-19. Hitachi had already cancelled its entrance ceremony, however, and changed it to a Career Kick-off Session (which has also been postponed) to mark the radical departure it has made from lifetime employment and seniority based promotion.

Since its record breaking loss in 2008/9, Hitachi has moved away from simply cutting employee numbers to reduce costs and instead radically altered its business portfolio and introduced a new HR system. President Nakanishi was responding to the often heard concern in the company that “we don’t have any leaders who are effective globally” – a major problem when Hitachi was moving away from being a purely domestic supplier to Japanese energy companies to be more active globally in social infrastructure.

Japan HR as “just one of the regions”

In 2011 Hitachi tore down the 3 distinct layers of its old HR structure – Hitachi HQ’s own HR division, the HR divisions of the Hitachi group companies and the HR divisions of overseas subsidiaries. Now there is a global HR division, 30% of whose employees are non-Japanese. Each region reports into the global HR division, with Japan being one of the regions along with Europe, the Americas, Asia etc. The HR departments of the subsidiaries within those regions report into the appropriate regional HR division. This presumably means the group companies have far less autonomy and Hitachi HQ and Japan are just “one of” the regional or subsidiary divisions.

Hitachi also moved away from the “Shokuno” model much used by Japanese companies – where experience and potential of the employee are the key factors in deciding pay and grade to the “job” model – where each post carries a detailed job description and the pay is determined by the market rate for jobs requiring similar levels of skills and experience.

Toyota goes triangular

Toyota‘s President Akio Toyoda has also begun to have doubts about lifetime employment and seniority based pay. Last year, during the “Spring Offensive” when Japanese company unions negotiation with the directors on base pay, bonuses and conditions, Toyoda said “I have never felt such a distance between us as I felt this time”.

So in 2020 he introduced a new triangular negotiation structure – instead of unions and directors being face to face, he sat three groups around a triangle – the union, the management/executive officers and the board directors. From April of next year the use of evaulations in setting pay and bonuses will become much more widespread and automatic seniority based pay rises will cease. Differentials in bonuses will also become much wider from July of this year.

Get motivated, underworked uncle!

Similar changes are being made at LIXIL, Ajinomoto, Citizen, Sapporo Breweries and Eisai Pharmaceuticals. The end of lifetime employment and seniority based promotion is seen as mainly about trying to deal with the “hatarakanai ojisan” or “underworked uncle” – middle aged men who are in their management position and being paid accordingly largely because of the length of their experience in the company than the value they are adding.

The rest of the Nikkei Business special feature includes a handy worksheet for underworked uncles, to regain their motivation and revive their careers, with some case studies of career changers and encouraging words from recruiters. The recruiters say that middle aged employees are good networkers who can link their company to other companies and look out for new ideas, that they have good communication skills, a learning mindset and are good negotiators. Sounds like they are going to need all of these to succeed in the final 15 years’ of their careers, if they don’t want to end up gazing out of a window.

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New leadership needed in Japan – effort and experience no longer enough

Strengthening human resources has become increasingly urgent for Japanese companies since 2017, rapidly catching up with improving profitability as the top management priority, according to a survey from the Japan Management Association.* Other issues such as increasing sales/market share, or introducing new products and services or reviewing the business portfolio are declining by comparison.

Nikkei Business looks at various ways that Japanese companies are dealing with this, including my old employer Mitsubishi Corporation. Their approach does not seem to be that different from 20 or 30 years ago, which is to treat everyone (at least, those hired in Japan) as if they have leadership potential and offer them opportunities accordingly.

Impact of the Ice Age

The concern of companies (over 75% of respondents to a Ministry of Economy Trade and Industry survey in 2017) is particularly around having sufficient leadership and management resources within the next five years. This is not surprising as the cohort that would be entering into senior management are the group that were most affected by the Ice Age of recruitment, when companies drastically cut back their graduate recruitment in the 1990s to 2000s.

New recruits don’t want to be leaders or specialists

But part three of the Nikkei Business special indicates that the roots of this lack of leadership might be in a mismatch between the expectations of the younger generations and their managers too. New recruits are showing less interest in becoming President than in 1999, more interest in senior roles such as board director or General Manager, but interestingly, less interested in become a specialist.

Generational mismatch, again

The qualities of an ideal leader vary between generations too. In 1999 41.3% chose “someone who listens to the views and wishes of their subordinates” as an ideal quality, but this was chosen by only 26.8% in 2019. “Someone who gives directions politely” was the top choice (44.5%) of the 2019 new graduate recruits, but this was chosen by only 32% of new graduate recruits 20 years previously. The 1999 intake were significantly more keen on leaders who were passionate about their work than the 2019 intake, whereas the 2019 intake valued a leader who places importance on private lives, not only work.

Nikkei Business concludes that the type of leader needed has changed over the decades:

1990s – after the economic bubble burst, strong leaders were needed, who were more top down, able to solve problems using their skills and experience. If you tried hard, you succeeded
2000s – with the spread of information technology it became important to gather in information from the gemba – where the work was happening
2010s onwards – employees place importance on diversity. Globalization and digitalization gain pace – the leader’s skills and experience aren’t always relevant. Effort does not always bring results

*Japan Management Association seems to have given up putting anything new in English on its website since 2017.

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Japanese employees want to work for a company that builds you

I’ve just recorded a five minute screencast explaining the mysteries of Japanese corporate hierarchies and job titles. I explain how the “three treasures” of the Japanese post war employment system are beginning to tarnish. Lifetime employment, seniority based promotion and company unions who negotiate base pay and bonuses are all applying to fewer people, or being tweaked to a more performance/competency based system, allowing mid career hiring.

Nikkei Business magazine has just published another article on this too, pointing out that Japanese people’s expectations of what the company should offer are changing as well.

It cites an anonymised case of a 41 year old male IT engineer, who left his electronics employer after 15 years, to work for a logistics company. He was partly worried about the financial performance of the electronics giant, but also felt that with digitization, it was time to apply his skills to a different company.

This might not seem so odd for a European or American employee, but up until recently, in Japan leaving a major company in your 40s would usually suggest you had been pushed out, and it would also have been difficult to find a job of equivalent status in another major employer.

Average time with one employer is shrinking

Data from Japan’s Ministry of Labour shows that the average length of service of males under 50 is beginning to shrink. A survey from RecruitWorks shows that 60% of 35-54 year olds have changed employers at least once. The main reason given, according to a survey from en-japan employment agency, is that they don’t feel any engagement or sense of achievement at their current employer. This is cited more frequently as a reason for quitting than low pay or worries about the future of the company.

Allowing second jobs

Nikkei Business magazine then goes on to examine what various Japanese companies are doing in response to this trend. Mizuho Bank has lifted its ban on employees being able to have a second job elsewhere. Up until recently, it was felt that allowing this would be a security risk as employees had access to confidential client data. Furthermore, it was more complex to manage the pay roll and benefits of employees with multiple employers.

So why did Mizuho change its mind? Partly it was because of the legacy of merging three banks, and the time and cost it has taken to integrate systems, branch networks etc. Mizuho is now looking to reduce its employee total by 19,000 over 2017-2027 so the unspoken contract that there is an obligation to offer lifetime employment has already been broken.

Building new skills – whose responsibility?

But a bigger reason, according to Nikkei Business, is that individual employees’ attitudes towards their company has changed. Rather than expecting to be looked after in terms of pay for life, they are interested in the company as a place where they are offered opportunities to grow, and new skills, so if they need to build those skills and opportunities outside the company, they should be allowed to do so.

Mizuho had become less popular with new graduate recruits recently, and is hoping that by being open to employees working outside the bank, graduates will see Mizuho more favourably again. The take up for applying to do second jobs has been across all age groups – including a 27 year old working for a start up through to a 57 year old working for a recruitment consultancy.

NEC has also been encouraging in-house start ups and set up NEC X to promote new business in Silicon Valley in 2018. Airconditioning manufacturer Daikin allows staff to focus on AI and IoT training and study for 2 years and brings in interns from Tokyo University to work in its operations around the world.

I know I would say this, but one chart that caught my eye in the article was the one showing that Japanese corporate investment in training per head fell , as did the proportion of Japanese companies funding training, after 2008 and has never returned to previous levels in the 10 years since. Japanese employees are getting the message that they cannot depend on their employers for career development.

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What Japanese people find most challenging about speaking English: 1 Small Talk

Pernille Rudlin in conversation with Peter Bernstein, MD of PS English, on what Japanese people find most challenging about speaking English.

1. Small Talk

Why a Japanese person would never think to say “what did you get up to at the weekend?”

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Which Japanese companies to work for in Europe

We’ve been publishing our top 30 Japanese companies in Europe intermittently for 5 years now. We regularly receive enquiries for recommendations on which Japanese companies to approach as potential employers. We’re not a recruitment consultancy so we don’t have any inside track on what jobs are available (please talk to our friends at Centre People Appointments for more practical assistance), but I would say that size in Europe and growth are important factors to consider.

Relative size in Europe is a key factor

If the European operations of a Japanese company represent a substantial part of their business, then it’s more likely that Europeans will have some influence within the organisation. There will also be more promotion opportunities and career paths than working for a smaller organisation in Europe. For that reason, it’s worth trying to join the organisation in the European/EMEA headquarters.

Companies with a relatively high proportion of their employees in EMEA (25%+) include NSG (Pilkington), Asahi (brewery company recently acquired Grolsch, Peroni, Pilsner Urquell etc brands), NTT Data, Toyota Tsusho (acquired French company CFAO with a big presence in Africa), Asahi Glass, JT International, Konica Minolta.

Has the company been growing?

Not only are growing companies more likely to have job openings, but they are more fun to work for. Japanese companies are still growing their operations in Europe overall. However some have been undergoing substantial restructuring, which has resulted in significant headcount reductions in some countries, and significant growth in others. For example Fujitsu is reducing headcount in the UK and Germany, but growing rapidly in Poland and Portugal.

Companies that have grown the most rapidly in Europe (more than doubling) over the past five years are Nidec, NTT Data and Panasonic.

Working for an acquired company

The rapidly growing companies have mostly expanded through acquisition – for example Dentsu, Nidec, Panasonic (Ficosa, Zetes) and NEC (Northgate Public Services), Toyota Industries (Vanderlande), Hitachi (Ansaldo). Working in those acquired companies might also be an attractive option, as there will be more autonomy, and less domination by Japanese management layers than Japanese subsidiaries which have grown organically.

Companies who score highly in terms of growth and significant European presence are NTT Data (third largest company in Europe) and Dentsu (8th).

In terms of sectoral growth – as well as IT companies that are moving into services and solutions like NTT Data, Konica Minolta and Panasonic – Daikin (# 27) and Mitsubishi Electric (#30) have both grown substantially recently, probably due to expansion of their eco friendly air conditioning businesses.

For new graduates, many of the top 30 have graduate trainee schemes, which would be worth considering if you are looking for a chance to be seconded to Japan.

Top 3 largest Japanese employers in Europe, Middle East and Africa:

1. Sumitomo Electric Wiring

Large numbers of employees in manufacturing, as making automotive wire harnesses is still a fairly manual job. Manufacturing jobs will tend to be in North Africa and Eastern Europe. There are plenty of jobs in design engineering and sales as well, and will be future proof as apparently electric vehicles also require complex wire harnesses to operate.

EMEA headquarters: UK (SEWS-E), Italy (CABIND), Germany (Bordnetze)

No graduate trainee scheme, but this page gives a flavour of the jobs available in the region for SEWS-E https://www.sews-e.com/current-vacancies/

2. Yazaki

Very similar to Sumitomo Electric Wiring in terms of business and jobs but privately owned, so more of a family style corporate culture. Has a YEA!cademy (Yazaki Europe training academy) https://www.yazaki-europe.com/career.html

EMEA headquarters: Germany

3. NTT Data

Owned by Japan’s NTT (formerly Ministry of Post and Telecommunications, now partly privatised). NTT Data has acquired various companies in Europe and elsewhere such as itelligence, Cirquent, Value Team, Intelligroup, and Keane. NTT is in the middle of restructuring and have put a new global headquarters, NTT Limited, in London. NTT Data will be kept as a separate organisation, however.

Lots of training and chances to go to Japan, however recruitment seems more by country/company than centralised and might be easier via LinkedIn than the official website, which has broken links. https://www.linkedin.com/company/ntt-data/jobs/

EMEA headquarters: UK

We will cover the rest of the top 10 largest Japanese employers in Europe, Middle East and Africa in our next post.

The full top 30 can be downloaded as a pdf from here Top 30 Japanese employers in Europe 2020 Rudlin Consulting.

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How a failed merger led Tokyo Electron to world class HR

Tokyo Electron originally sold car radios when it was founded in the 1960s, but reinvented itself as a manufacturer of semi conductor making equipment in the 1980s. A failed merger (following objections from anti trust regulators in the US) has led it to reinvent itself again. This time, the reinvention is just as much around management as it is product lines.

In 2013 Tokyo Electron spent a year planning a merger with the US’s Applied Materials. They even had a new name and were planning to put their global headquarters in the Netherlands.

To prepare for the merger, Tokyo Electron reduced its stake in an affiliated trading company, Tokyo Electron Device, and withdrew from the solar cell business. This renewed focus on the core business has led to increased profits and turnover.

Role not potential

One area on which it proved difficult to reach agreement with Applied Materials was how the HR system should be configured. Tokyo Electron was still focused on having lifetime employment and salary boundaries based on potential (the untranslatable Japanese word nouryoku) with actual performance influencing take home pay upwards or downwards each year. This was very different from Applied Materials system of having a transparent relationship between actual job roles and compensation and ensuring the appropriate person was assigned to that role, without much thought for maintaining long term employment.

Howevever when younger Tokyo Electron employees heard about the Applied Materials HR system they had high expectations as they felt frustrated by the traditional Japanese system. Tokyo Electron realised it would have to change its HR system to motivate its younger staff. They recognised, however, that there was a big difference between Japan and the USA, where people job hop frequently in their career.

The new system was introduced worldwide in 2017-8. 6 role categories which were applicable globally were introduced – operations, engineering, sales and marketing, business support, management and executive management – up from three previously: the untranslatable sougoushoku (generalist management), ippanshoku (generalist administration – usually for women) and technical. The number of levels increased from 7 to 20 and they applied to all categories (apart from executive). So someone in a senior business support role at level 8 could be considered to be “doing a highly complex job, with a strong influence over the results of their department” just as much as someone in engineering or sales and marketing.

This might seem vague, but Tsuchii Nobuhito, HR General Manager, justifies it by saying that as the semi conductor business is fast changing, roles need to be kept flexible.

Further changes included making it possible to be promoted in consecutive years. Previously Tokyo Electron employees had to stay in one grade for three years before being considered for the next promotion. Before, the criteria for a job role were evaluated relatively but now there are evaluated by an absolute standard. This is intended to make it more transparent to people where their job role and grade sit within the whole organisation and what their future career path might be.

Inevitable changes as the semiconductor industry globalizes

These changes were inevitable, says Nikkei Business. Japan’s semi conductor industry has hollowed out and most of the customers are overseas. 80% of Tokyo Electron’s sales are outside of Japan and 40% of its employees are overseas. Only around 500 employees in Europe and the Middle East out of 12,500 total. Unsurprisingly, Asia has the largest number – around 2,800. Japan headquarters also has more Asian employees. Nikkei Business interviews one Korean employee in Japan who says she was surprised to have stayed so long. She started as a Chinese/Japanese translator but enjoyed the challenges in her job and stayed on.

Higher than average salaries probably also helped. Tokyo Electron pays an average Y12.7m a year (around US$115K) compared to the industry average of around US$60K. As a result of the new HR system 90% of staff had a pay rise – mainly the younger and middle ranking employees.

Global employee communication

President Kawai has been careful to communicate company strategy and objectives as clearly as possible around the world. He has held 35 employee meetings around the world and also holds smaller discussion meetings with staff to talk about the direction of the semi conductor industry, or whether to continue with M&A activities. He asks them whether the strategic direction is getting through to people, and if it is appropriate for their workplaces.

There are still some issues – how far it is possible to be objective in evaluations, for example. “It will take another 3-5 years before the system really beds in” says Tsuchii. Kawai has set some ambitious targets and is confident there is room for further growth. Whether Tokyo Electron can continue to motivate its staff will be key, says Nikkei Business.

Their website certainly reflects the brand values they aspire to – clear and transparent, with an emphasis on “people, technology, commitment” – although just like every other Japanese technology company, their mission pretty much boils down to “contributing to society through innovative technology”, with added “reliable service and support”.

One of the puzzles of Japanese HR is how employee engagement is so low and yet the employees seem so dedicated and diligent. Kawai at least seems to have found a solution – transparent career paths.

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3 keys to success in overseas post merger integration according to Suntory

Suntory acquired US company Beam in 2014, since which it jointly developed and launched new gins and whiskeys. Overseas sales are now 42.7% of Suntory’s turnover, compared to 25.2% in 2013 and the merger is generally thought to have been a success, according to the Nikkei Business magazine.

Suntory took on a mountain of debt to buy Beam. Suntory President Niinami Takeshi felt in 2014 that Beam’s attitude was complacent, considering the pressures Suntory was under. They were making personnel decisions without any regard to Suntory’s wishes. Beam may have felt that as Suntory’s spirits business was folded into the new Beam Suntory, this meant Beam had the right to do as it pleased.

The three elements Suntory’s President Niinami felt were crucial to post merger integration were:

1. Parent company should make personnel decisions

Niinami transferred the authority to nominate directors of Beam Suntory to Japan HQ, set up a new compensation committee which he chaired, and sent an internal auditor from Suntory to Beam. The CEO of Beam Suntory at the time, Matt Shattock, was not pleased, but Niinami was firm, saying “we are the owners”. Niinami says this was the biggest reason for the successful merger. He made sure that he also listened to Beam executives and ultimately replaced Shattock with Albert Baladi, seeing him as someone who could drive Beam Suntory’s growth in Asia (and indeed they have just announced they will be making whiskey in India soon).

2. Be based near the customer

Baladi clearly won over Niinami by understanding the importance of the Gemba – the shopfloor, the coalface. Beam Suntory’s headquarters was moved to central Chicago, in a district full of bars and restaurants, from a suburb an hour outside the city. Again, this did not thrill the then CEO Matt Shattock, whose 15 minute drive into work by car turned into a 1.5 hour commute. “It took 2 years to persuade him”, says Niinami.

Being focused on the gemba was not just about the headquarters. Beam previously had frowned upon inefficiencies such as visiting retail outlets frequently to understand what products most matched them. Its emphasis was on short term profits. Niinami changed this by sending several experienced Suntory sales and marketing people to Beam Suntory. One was Takeuchi Jun, who insisted on visiting high class bars and restaurants in Chicago, introducing Beam Suntory products, to increase the fanbase. He was adamant to local employees that sales for home consumption would increase as a result.

Usually, hearing that sales and marketing people from Japan headquarters are coming to an overseas subsidiaries to change the way Western marketing works would make me nervous. Sales and marketing (if it exists at all) are very different in Japan to Western countries, but it seems to have worked. For example, Suntory was able to successfully introduce the Highball Tower machine to bars in the USA – which makes a cocktail of whiskey (in this case Suntory’s Toki) and sparkling water.

3. Return to craftsmanship

Along with gemba, Suntory introduced the Japanese concept of monozukuri. Niinami was shocked that when he visited Jim Beam’s main distillery in Kentucky in 2016, to see that the workers were on strike, angry with management based in the headquarters an hour’s flight away. Bourbon sales were doing well globally, and the management asked the distillery to increase production without anything being changed at the distillery. Temporary staff were taken on with employment terms which the existing workers were unhappy with.

Niinami thought this “monitoring from above” approach was misguided, and removed the factory chief, bringing in the production director from Japan. Distilling space and warehousing were increased with a $500m investment in one year.

Suntory also encouraged joint development of new drinks such as Legent. I noticed in Europe the sake-like gin Roku from Suntory was launched in 2017 (and I’m a big fan). Will they also be moving Beam Suntory in the UK from suburban Uxbridge to somewhere with a night life like Soho?

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Japanese companies in Europe say Brexit is their biggest worry for 2020

The annual Japan External Trade Relations Organisation (JETRO) survey of Japanese companies in Europe reveals that over 70% of Japanese companies expect their European operations to be profitable for the fifth year running, but concerns over an economic downturn in the region are higher than in previous years. Brexit came top of the list of management worries – selected by 56.5% of Japanese companies in Europe.

31% say Brexit has had a negative impact on their business so far, and 37.7% are expecting a negative impact in the future. 3.7% felt Brexit has had a positive impact on their business both now and will do in the future. A negative impact was felt by 54% of Japanese companies in the UK both now and in the future, with 2.1% of Japanese companies saying Brexit has had a positive impact and only 0.5% expecting it to have a positive impact in the future.

Brexit

More than half of the 842 companies who responded cited Brexit as their biggest management concern, outstripping the perennial headache of recruiting and retaining employees. Unsurprisingly the group that was most worried was the manufacturing sector in the UK – but the services sector in Ireland and the UK also ranked Brexit highly as a concern. Nearly 70% of Japanese companies in Poland and Portugal picked Brexit as a key issue – significantly higher than the average for Japanese companies across Europe.

54% of Germany based Japanese manufacturers chose Brexit as their primary concern, but interestingly, the non-manufacturing sector in Germany was even more concerned by Brexit (59%). For all groups, the short term disruption from a no deal Brexit was the main reason for concern and the second biggest issue was the future relationship of the UK and the EU.

Japanese companies in the UK were worried about the impact Brexit would have on the UK economy, a cheapening £ making imports more expensive, changes to the UK regulatory and legal environment and exports to non-UK EU. Japanese companies in non-UK EU countries were most worried about exports to the UK, but also the impact of Brexit on the UK economy and on the EU economy.

Around 90% of Japanese companies were concerned about disruption to logistics and customs processes between EU and UK, considerably higher than concerns about tariffs being imposed (65%).

Japanese companies in the UK focused on freedom of movement of their employees

The worries about UK regulatory and legal changes were mostly focused on changes to the freedom of movement of people between the UK and EU. Over 50% of Japanese companies in the UK said this was their main concern, particularly those in the services sector.

In terms of countermeasures – 22% said they had either implemented or were implementing their contingency plans – particularly regarding regulatory and legal changes. Compliance with the REACH regulations for the chemicals industry and setting up a new operation were most cited as steps taken. Around 12% of UK based Japanese companies have or are in the middle of reorganising their supply chain and logistics and 4.4% have or are in the middle of reviewing their manufacturing organisation and 2.4% have or are reviewing their R&D structure. The most frequently cited measure taken by Japanese companies in non-UK EU was to secure financial passporting into non-UK EU.

Relocation from UK to EU (but some purchasing functions coming to UK)

In terms of moving out of the UK, the survey found that 3 companies had moved their EU regional HQ completely out of the UK, to Germany, and 10 had partially moved out – 5 to Germany, 3 to the Netherlands and 2 to Luxembourg. In 2015 19 companies said they wanted to expand their regional coordination function in the UK, compared to only 2 in 2019. More companies were expanding their regional HQs in Germany, Netherlands, France and Spain.

3 companies had moved their sales coordination out of the UK, to Germany, Czech Republic and Poland, 4 had partially shifted it, to Germany, Italy and the Netherlands. 2 companies had moved all their manufacturing out of the UK – 1 to Poland and one to Japan. 1 had partially moved their manufacturing to Hungary. Only 1 company had moved their R&D out of the UK, to Switzerland. 4 companies had moved their procurement function from the UK to Czech Republic, Italy, Spain and one company had moved their procurement function to the UK, from Asia.

4 companies are investigating moving their regional HQ from the UK to Germany and Italy, 2 partially moving their HQ to France and Czech Republic. 3 companies are considering moving their sales coordination to Germany and Italy or partially to Germany, France or Belgium.

1 company is considering moving all manufacturing to Japan, and 9 companies are considering partial relocation to Hungary, Germany, Czech Republic, Romania, Japan or elsewhere in Europe. 2 companies are considering wholly or partially moving their R&D to Germany or elsewhere in Europe.

14 companies in the UK are expecting to expand their high value added manufacturing in the UK, down from 25 in 2015 whereas 32 Japanese companies in Germany are expanding their high value added manufacturing. The Netherlands has become the third main host for Japanese high end manufacturing – 12 are expecting to expand their manufacturing there compared to only 2 in 2015.

12 companies are considering moving their procurement to Poland, Italy, Germany, Spain, the Netherlands, Asia or elsewhere in the EU. 3 companies are considering moving procurement to the UK from the EU, Poland, Portugal. 3 other companies are looking to move their procurement entirely out of Europe to countries such as South Korea or China.

The EPA is encouraging Japanese imports to EU

65.5% of Japanese companies who were importing from Japan to the EU and 53.1% of Japanese companies exporting to Japan from the EU said they were taking advantage of the EPA. Particularly notable were 80% of Japanese companies based in Italy (both importers and exporters) and 70% of Japanese companies in Spain. 62% of UK based Japanese companies were using the EPA to import from Japan (a lower proportion than Italy, Czech Republic, Spain, Poland, Belgium, Netherlands and Germany).

100% of Japanese companies in the logistics/warehousing, plastic components, rubber products sectors say they are using the EPA and over 70% of Japanese companies in the metal products, textiles, automotive parts, wholesalers, food and seafood processing sectors are using the EPA to import from Japan.

Sectors most making use of the EPA to export from the EU to Japan were the logistics/warehousing, automotive parts and wholesale sectors.

Overall, Japanese companies in the EU are importing 32.6% of their parts and raw materials (by value) from Japan, 1.2% up on the previous year – Japanese companies in Germany were importing the highest share of their procurement from Japan by value – 46.6%. Over 23% of Japanese companies in the EU expect to expand their procurement from Japan, particularly the services sector with 47.8% of wholesale and retail companies saying they will increase their purchases from Japan.

Economic outlook for Europe

Japanese manufacturers are however more pessimistic about prospects for 2020 than they were in 2019, with 36.7% expecting their profitability to worsen, compared to 26.6% expecting their profitability to improve. The causes differ from Western Europe to Eastern Europe – manufacturers in Western Europe expect falling demand to be the key factor whereas in Eastern Europe the primary concern is rising labour costs.

Around a third of Japanese companies are optimistic about the economic prospects in 2020 for the countries they are operating in, which is considerably down on the 57% who were optimistic for 2019 – this pessimism was particularly strong for Western European based manufacturing.

Hiring and retaining workers continues to be a headache for Japanese companies. This is especially an issue in Central and Eastern Europe and particularly at management level in Western Europe and at factory worker level in Central and Eastern Europe.

Around 50-55% of Japanese companies in Europe have or expect to maintain current employee levels – over a third have or expect to increase their workforce. 16% cut their workforce in the past year but only 11.3% expect to do so in 2020.

Strengthening selling to EU as a region

JETRO also sees evidence that Japanese companies are strengthening their approach to selling to the EU as a region, rather than individual countries. For the first time in their surveys, “The EU” outstripped Germany and Poland as the market that Japanese companies saw as the most promising for sales. Maybe this is another – psychological rather than regulatory – impact of the EPA.

Japanese companies say that strengthening their company’s brand, developing and strengthening the technical skills of their employees (particularly in Eastern Europe) and investing further in research and development are key to increasing sales in Europe.

So, as I have often said, Japanese companies are having to find ways to retain their integrity in a Europe and a world which is also dis-integrating, and Brexit is accelerating that process.

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Last updated by Pernille Rudlin at 2020-08-26.