Management and Leadership

Why Japanese minimalism does not apply to Japanese management

Following on from her article on why Germans work less hours than Japanese employees, Professor Ulrike Schaede takes a look in a second article at the need for a German “golden middle path” in Japanese management style. She describes how Germans who know that the Bauhaus minimalist architectural style was influenced by Japanese minimalism are surprised by how Japanese presentations are so overcomplicated, or there are so many Japanese people on a team, who don’t seem to have clear roles and responsibilities, and how many meetings seem to be needed to make a decision.

In terms of the right balance on team numbers she cites Amazon’s 2 pizza rule – that team members should be no greater than 5 or 6, the number that can be fed adequately by 2 (American size) pizzas. Individual responsibilities should be made clear, in order to improve a sense of ownership and motivation. It has certainly been our experience at Japan Intercultural Consulting in facilitating cross cultural sessions for teams which are multi-site (eg the Netherlands, Japan and USA) that the Europeans in particular know that teams are not going to function effectively if roles are not clearly defined. The American “just do it” attitude and the Japanese “all pull together” approach do not work across borders.

As for too many meetings, she jokes that Japanese salarymen eat too much spinach – horenso in Japanese. We often talk about horenso in our Japan Intercultural Consulting training sessions – it’s a mnemonic for HOkoku-RENraku-SOdan – reporting, updating and discussing, meaning “keep everyone in the loop”. It’s true that it can lead to a lot of meetings – but in my opinion is also a basis for thinking about the kind of processes that might be needed to keep risk averse Japanese colleagues and customers happy. Often the hokoku/report is not done via a meeting but as a one pager of bullet points about what happened once a week, for example.

But as Schaede points out, Japanese want to feel that everyone has been involved in a decision – she recommends that it is made more explicit which discussions everyone needs to be involved in and which decisions could be settled in smaller meetings. A detailed agenda is also helpful, to keep meetings short and to the point.

She also makes a plea, as a university professor, for ‘less is more’ in terms of lecture load. Japanese students are notorious for not studying very hard once they get to university, but as she points out, they are expected to attend many more seminars and lectures than their Western counterparts. As a result, lecturers have a lot of their time taken up with preparing lectures, when in fact they could be spending that time on individual student needs, thereby perhaps encouraging more self study.

Schede has also noticed something that many foreigners new to Japan find it hard to get used to – “overcommunication” – the way there are constant announcements tor remind you not to leave things on trains or that the end of the escalator is coming, or that a lift is going up. She claims not to mind this herself, saying it is a legacy of Japan’s wonderful customer service, to make customers feel looked after.

Her final contrast on “less is more” is between the minimalist business cards of Japan’s traditional elite – often showing the name only, and an increasing trend amongst the newer elite in Japan of having multiple cards, with different websites, email addresses and job titles.

So how many meetings, slides, lectures, team members and reports are enough, if cutting completely is going too far? Professor Schaede says she often says to her students that their work could easily be cut by 10% and up to 20% if they try, and that this would sharpen their point, without losing much.

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Japanese leaders need more confidence in a Japanese style globalization

Many of our Japanese client companies are embarking on global initiatives, in marketing or human resources, and consciously involving overseas employees in them. It’s great to see positive, forward thinking even in these difficult times, but comments I have been getting from the Europeans involved in these initiatives have been puzzling me.

Normally, discussions in our European training sessions about decision making in Japanese companies revolve around nemawashi (literally, going around the roots of a tree) a consensus based, largely bottom up, decision making system common in Japanese companies. This decision making process may be an entirely bottom up initiative, or triggered by a vague top down directive.

Consensus based decision making is not uniquely Japanese of course. In Europe, plenty of national and corporate cultures prefer some kind of consensus based approach, instead of top down imposition. However, when the Europeans involved in the global initiatives have tried to get a consensus based dialogue going with Japan, they instead been met with passivity from their Japanese counterparts.

One British director told me that he had suggested to his Japanese team that they come up with a proposal for a new workflow. Because they looked puzzled, he scribbled on a whiteboard very roughly what he had in mind. To his concern, the final proposal simply replicated his rough sketch. “When I put ideas to teams in Europe that I have led, I expect them to push back. After all, they often know far better than I do what can or can’t be done”.

Another British manager proposed a series of discussion sessions with Japanese marketing staff, to give feedback into a new brand strategy, only to be met with a request that the European team “just tell us what to put in the advertising”.

This could of course be due to a reluctance to have open confrontation, particularly in English. But I also sense an attitude that because the initiatives are “global” and come dressed in English “marketing” and “strategy” terminology unfamiliar to Japanese people, the Japanese employees feel it is not their area of expertise, so they should just let the “Western” side of the team take the lead.

Yet this is precisely what these European managers are trying to avoid. They want to take an approach to creating strategy which is culturally sensitive. After all, “global” these days does not mean just the West, but China, India and elsewhere. The European managers were rather hoping their Japanese colleagues would have a better cultural understanding of how to incorporate the Asian operations into the initiatives than they did.

How then could the Japanese employees engage in a dialogue in a way that does not make them feel uncomfortable? I would suggest the “coaching” style, which comes naturally to many Japanese people I have worked with. This means that instead of openly stating a disagreement, the listener asks questions which help the presenter to see the problems in their proposal themselves, rather than be told what is wrong.

Overall though, Japanese managers should have more confidence in themselves as leaders of a Japanese style globalization, which may, let us hope, work rather better than Western style globalization has so far.

This article originally appeared in the Nikkei Weekly and also appears in “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” available as a paperback and Kindle ebook on Amazon.

Mitsubishi Heavy Industries – feminise and foreign-ise to stop being fossilised

The cover story for the Nikkei Business magazine (JPNS) for October 20th 2014 is somewhat doom and gloom,claiming that Mitsubishi Heavy Industries’ reforms were too slow, and it’s now in the last chance saloon. The four part special includes an interview with the president, Shunichi Miyanaga, who has been leading the reforms and also a handy checklist so you can make sure your Japanese company hasn’t also become fossilised like MHI. One of the items on the list is whether “You have lots of Japanese expatriate staff, and the local hires view them as the secret police”

The online counterpart to Nikkei Business also has an interview with Christina Ahmadjian, an American who has lived in Japan for 17 years and is now a professor at Hitotsubashi University, who was appointed as an external, or “outside” as they say in Japan,director of MHI in 2012. She’s also on the board of Eisai, the Japanese pharmaceuticals company. Needless to say, she speaks fluent Japanese – and was also an “accidental Office Lady” in her past, at Mitsubishi Electric.

She termed MHI “super-Japanese” for its slow decision making and initially did not want to take up the role. Her friends cautioned her, saying there are plenty of other Japanese companies who are more advanced in their reforms that she should consider. However the then President and chairman took her presentation to the board very seriously, which led her to decide to “try it for a year, and quit if it didn’t work out”.

She continues this un-Japanese attitude by regularly asking in board meetings “who is accountable” and asks for specific commitments from anyone who uses the typical Japanese vague term “kento shimasu” (we will study this further). She also insists that strategic rather than technology related subjects are discussed in the board meetings.

President Miyanaga has also changed the board meetings, through reorganising the company into four domains, and decreasing the representatives accordingly to the board, which has allowed for smoother discussions. Ahmadjian says she is surprised by the speed at which Miyanaga has moved, and also how careful he is to share all information with her, including on any M&A activities. Previously, Japanese companies had been reluctant to involve external directors as they were concerned that confidential matters would be leaked.

Nonetheless, MHI is still slow compared to the foreign competition, she says. MHI is beginning to appoint non-Japanese to senior positions overseas but there is a lack of candidates internally. It’s not always the case that it is easier to get rid of people in foreign companies, she argues – in Europe the unions can be very strong and she suggests that some Japanese companies are using legal barriers as an excuse not to restructure, and are in fact “zombie” companies.

“I am a watch dog, making sure MHI do not slack off on their reforms” she concludes.

The 4 types of Japanese expat manager

Susumu Okamura, a veteran of Daiichi Life, DIAM in the US, UBS Global Asset Management and a Columbia MBA alumnus, believes experience of secondment to another company is a must for survival in the global economy. Thanks, however, to ‘Naoki Hanzawa’ (a TV series in Japan about a heroic salaryman banker), being seconded to another company has a thoroughly bad image in Japan. However in global companies, where spin off companies are multiplying, being seconded has become part of management development.

Foreign business people are particularly enthusiastic about being sent to manage acquisitions or struggling subsidiaries. They see it as a valuable chance to put their ideas into action and do things their own way, says Okamura.

Okamura views joining your first company as a second birth, with being seconded to another company as a third rebirth, but unfortunately many Japanese managers do not see it that way. Okamura sees four types of secondees:

The depressive – who has dropped off the elite track of the headquarters, so becomes disillusioned and loses his spark. However they are often given an important role in the subsidiary company, so they are the worst kind of boss for the employees of the subsidiary.
The look backer – who wants to make headquarters regret pushing him out by producing great financial results. Tries harder than the depressive, but his aggressive, inflexible management style can warp the subsidiary
The phlegmatist – has the same laid back style wherever he goes. Works steadily, doesn’t try to change anything.
Mindset changer – is thrilled at the chance to start a new chapter in a new organisation, pursuing new dreams

As Okamura says, in traditional Japanese companies, secondment damages your chances of becoming a top executive in the headquarters. “But I want to ask instead, is it really fun to stay in the headquarters? What are you learning which is of value in the marketplace? Do you think that value will still hold in 10 years’ time?”

“We are in the middle of a diversity boom. However, unfortunately in many cases, the foreigners, women, mid-career hires and the disabled that are hired all end up being ‘dyed the same colour’. It’s not obvious why diversity was such a reason for hiring people. But being seconded is different – there is an unshakeable diversity to having to become part of a different corporate culture.”

You need to know Japan to be a globally effective Japanese manager

Foreign companies in Japan are known as gaishikei (foreign capital managed) and Japanese who choose to work in them are often suspected of being “lone wolves” who are motivated by money. However recently some Japanese managers who have worked in gaishi joined Japanese companies later in their careers, such as Hikaru Adachi, recently interviewed in Diamond magazine. He was born in Austin, Texas, went to Hitotsubashi University and then worked for P&G, Booz Allen, Roland Berger etc before joining Japanese clothing company World and starting up a group called Gaishikei Leaders.

He says he decided to work for a Japanese company because he is so concerned that Japan is being marginalized on the world stage, and to counter this, economic leadership is needed, for which global minded managers are required.

He joined a gaishi initially in order to learn as much as possible, as quickly as possible. Although he found performance reviews tricky as he would tend to be naturally humble about what he did or did not achieve, compared to the boasting from other employees about their successes, he felt that his honesty eventually won through, and people came to trust him.

Gaishi managers have experience that purely Japanese managers lack:

Experience of having worked with foreign employees who speak a diverse group of languages, particularly English – knowing how to write emails, documents, run meetings. This cannot be achieved by only working with Japanese speakers, who are used to the non-verbal, telepathic way of Japanese corporate communication.
To have a standpoint that is not pivoting on Japan. For example, corporate cultures or customs which work fine when it is just Japanese working together, but in a global market or working with non-Japanese, they are hard to understand, or cause major problems.
Systems which are based from the outset on being global, such as HR, evaluations, finance and information systems. It’s not sufficient just to adjust Japan HQ systems for global use.

Japanese who have worked abroad with Japanese companies may be able to get enough experience in the first category, but for the second and third aspects, gaishikei managers will have the edge. Particularly on 3. he points out that with Japan’s particularly Japanese systems and structures, it is difficultto get experience in hiring and developing high quality non-Japanese staff.

He stresses he is not saying Japanese companies are inferior to gaishi, rather that Japanese managers lack the necessary self awareness about Japan’s history, culture, politics and economics to be able to represent it effectively in the global world.

Oxford Boat Club vs Japan’s “Black” companies

Maiko Tajima, formerly of KPMG, now working for the World Food Programme, explains in Diamond Online why the rest of the world does not understand Japan’s so-called “black” companies. As she points out, if a native English speaker heard “black company” they would probably think “black enterprise” was meant, ie a company run by someone of what in the UK would now be called “black or minority ethnic” origin. Apparently there’s also a series of novels written by an American author called The Black Company.

Anyway, the closest translation would probably be “sweatshop” but most in the West would think of this as referring to factories, or workshops, in the US or Europe in the 19th and 20th centuries, and more recently in developing countries, and find it hard to believe Tajima when she explains that such conditions are occurring in a developed country such as Japan, in the 21st century. A recent survey of its employees by Sukiya, a late night restaurant labelled a “Black Company” revealed comment such as “regardless of night or day, put all your life into your work, and if you survive, then you get to give the orders next time” and “work until your nose bleeds and you faint. Then you won’t be able to say anything is impossible any more”.

She explains how this occurs by contrasting her experiences as a member of the boat club in Oxford and also of a fencing club in a Japanese university. In the Japanese university club, the concept of “sempai” (seniors) was strongly adhered to – she calls it a “caste system”. You could not eat before your coach and your seniors started eating. Practice was to see how much you could endure. If they felt you lacked “konjo” (guts, willpower), it was the collective responsibility of the rest of the club too, so you all had to sprint around the sports hall. Tajima did get results in her matches, but she is not sure to this day if the “guts” she had at that time has really helped her in her life since.

As a member of an Oxford University Boat Club, there were of course the early morning, 5:30am starts on the river, that had to be endured over several months, but the reason behind this was “doing what we had to, to win” – starting with the desired outcome and working backwards.

The team was multicultural – American, British, Indian, Chinese and Taijma herself, and teamwork was heavily emphasised, but only in terms of getting the team to be a winner – there were no bonds outside the boat club. You were also allowed to make suggestions as to what should be done. “It was not what you could or could not endure, just what was the most rational course of action in order to win.”

As she points out, in European countries such as the Netherlands, there is the right to leave work 2 hours early, if the previous day you worked two hours overtime, and plenty of maternity and paternity leave. The focus is on trying to have a “good life” both in work and home life, as part of government policy.

She thinks that the roots of the 21st century Japanese “black companies” lie in the kinds of behaviours described by Ikujiro Nonaka in his book “The Essence of Failure” – an organisational study of the Japanese armed forces in the Second World War – emphasising human relationships over rationality, and to strive for spiritual virtue, no matter what had to be endured.

“Japan is different, but other countries are different, too” – Takeda’s Weber

Japan’s annual shareholders’ meeting season at the end of June went relatively smoothly for most companies, as their results had improved, in part due to the impact of a cheaper yen. Takeda was one of the exceptions, however, with the new President, Christophe Weber, facing protests from a 100 or so shareholders, more than half of whom were ex-Takeda employees.

Their 7 point letter claimed that the acquisition of Nycomed and Millennium Pharmaceuticals were failures, that the way Takeda was globalizing and the low morale of scientists in Japan called into question management effectiveness, that the way Weber was appointed as Hasegawa’s successor was questionable, that the focus on the executive management committee, largely peopled by “foreigners” was causing the board meetings to become a mere formality, that it was not clear why high dividends should be paid out when the financials were worsening, and finally that responsibility was not clear for the fine of $6bn in the US for concealing the risks for Actos, a diabetes drug.

Diamond Online analyses why Takeda is being criticised “from within”. Takeda was at a high point in 2006, but in decline since then, as four of its blockbuster drugs came off patent in the US. The search for new hit drugs led down the path of M&A. Takeda was the dominant Osaka pharmaceutical company, squaring up against Sankyo the Tokyo-based pharmaceutical giant. Behind the scenes, however, there were merger talks between the two. In the end Sankyo chose to team up with Daiichi.

So Takeda embarked on overseas acquisitions – Denmark’s Novo Nordisk and then Millennium in the USA in 2008, and finaly Nycomed in 2011. These acquisitions required substantial post merger restructuring, however there was noone capable of this in Takeda. The management layer below Hasegawa was “thin” ( a problem common to many Japanese companies, who cut back hiring of that cohort during the first oil shock). Hasegawa appeared isolated, and reliant on foreign executives and Japanese executives who had worked in foreign companies (in other words, not including the indigenous Japanese within Takeda)

Weber’s recent interview in the Japan Times, in which he emphasises that Takeda will remain “Japanese” is an attempt to reassure the Takeda founding family and domestic Japanese management, but whether an interview in English in Japan Times (an English language daily) is sufficient is doubtful. A charm offensive on the Nikkei group of publications might be advisable.

What to do with the window gazing tribe

I visited Japan for the first time in a year and a half at the end of last year. I try to go to Japan once a year, each time looking out for subtle changes in a country I have been visiting or living in for the past forty years.

This time I felt some of the “genki” (a useful Japanese word meaning energy and health) had come back, compared to visits in 2011 and 2012 when there seemed to be a general atmosphere of depression.

However I also felt Tokyo had slowed down. There were visibly more elderly people, but also the younger people moved more slowly, partly as they were gazing into their smartphones as they walked.

Japan’s “yasashisa” (gentleness) and rich cultural life make it a great place to grow old. Of course I realise that it is the current generation of retirees who have it the best – a decent pension and healthier, longer lives in which to enjoy it.

My generation, both in Japan and many European countries, face the prospect of not being able to retire until we are 70. So we have at least another 20 years of working life ahead of us. In Europe it is now illegal for employers to discriminate on the grounds of age, and the default retirement age of 65 has been phased out in the UK.

Europeans reaching their fifties will not be able to afford to retire early as previously. But if they cling on to their jobs they are made to feel like they are blocking the way for younger people and are vulnerable to redundancy programmes.

It is hard to get a job in another company once you are over fifty – and there is also a question of motivation. The prospect of another 20 years doing the same thing – particularly if it is a “gemba” (shopfloor) type, active, high pressure job, is not appealing. The second half of a working life should be more about reflecting on acquired knowledge and skills and handing them on to the next generation.

I’m not sure the initiatives taken in Japan since the 1990s to deal with this – such as kata tataki (literally “shoulder tapping” where employees in their late 40s are forcefully offered very early retirement) and madogiwazoku (the window tribe – people who have been given a seat by the window and no real job to do) really worked. It was not only disheartening for those directly impacted, but also for the younger generation, who have reacted by becoming more risk averse. They want lifetime employment, but don’t see the point of being ambitious or taking risks such as working abroad.

A better way might be to help people in the second half of their working life find ways of capturing their accumulated knowledge and skills and transmitting them to the younger generation in Japan – through teaching rather than as a manager.

Locally hired employees and managers in overseas acquisitions would also welcome having an appointed mentor to help them feel more connected to Japan headquarters and understand the corporate culture and processes. If Japan could refresh its traditions of sempai/kohai (mentoring of juniors by seniors) and apprenticeship for the 21st century, I believe it could be a pioneer in developing a humane but productive ageing society.

This article by Pernille Rudlin originally appeared in the Teikoku Databank News in Japanese on February 12th 2014 and also appears in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” – available as a paperback and Kindle ebook on Amazon.

Hitachi’s new President, Toshiaki Higashihara Q&A

As blogged previously, Hitachi announced their new President and COO Toshiaki Higashihara, on January 8th. The Nikkei Business magazine’s Q&A with him in the 20th January edition asked him for his views on how Hitachi was going to grow, and what would change.

Higashihara emphasised “One Hitachi”, bringing together services, products and solutions to address customer needs such as energy saving and improving productivity. The differentiator for Hitachi against Siemens and GE being that in the infrastructure business, Hitachi can also bring ICT skills and solutions around cloud computing and big data.

A sense of speed is needed, he added, and this means that not all decisions should be made in Tokyo headquarters. R&D, purchasing and ICT systems should be looked at in a global context. He also made positive noises about further acquisitions.

What will remain constant is Hitachi’s 100 years of “monozukuri” (making things/craftsmanship) and SQDC: Safety, Quality, Delivery Time and Cost.

It seems Higashihara was close to current President Nakanishi (who becomes Chairman and CEO), as a kohai (protege) and also brings global experience – a masters’ degree in computer science from Boston University and was President of Hitachi Power Europe.

First non-Japanese CEO in Takeda’s 230 year history

Takeda, Asia’s largest pharmaceutical company, caused a sensation in November when it announced that it intended to appoint Christophe Weber, a French 47 year old outsider from GlaxoSmithKline, as its next CEO, subject to board approval. Not only is he not Japanese, but he is much younger than the average Japanese President, and he is the 20 year old veteran of another rival company.

He was not unknown to Takeda however, as he was key member in the collaboration between Takeda and GSK on a vaccine joint venture. However, when I discussed this appointment with the President of a Japanese start up company in the same healthcare sector he was not impressed – “a paucity of management” on the current CEO Yasukichi Hasegawa’s part, he harrumphed.

Hasegawa himself had been appointed by Kunio Takeda, scion of the founding family, in 2003, with Takeda stating “I’ve reached the limit of what I can do to globalize the company”. Hasegawa took up the baton, acquiring US cancer R&D company Millennium Pharmaceutical in 2008 and Swiss biotech company Nycomed in 2011. He tried to retain many of Millennium’s executives such as CEO Deborah Dunsire, who also joined Takeda’s unusually “diverse” board which includes Japanese American “Tachi” Yamada, President of Global Health at the Bill and Melinda Gates Foundation and Frank Morich, ex Bayer. However she resigned in 2013 as a result of the restructuring that Hasegawa pushed through, to integrate Millennium more fully into Takeda and streamline operations.

Apparently, a couple of years’ ago, Hasegawa said he wanted to have a Japanese person succeed him. He felt that diversifying the structure and bringing in non-Japanese was going to take time to show results, and he would have to pass the baton on before then.

Although my healthcare industry CEO used “paucity” to describe Hasegawa’s management capability, it seems from this that there is a paucity of internationally capable management within the Takeda home country organisation to carry on and support the bold moves that are being made – a situation many globalizing Japanese companies are facing.

Category: Management and Leadership