Category: Management and Leadership

Useful to have around, but not really one of us

spot_Chino_ClaireI’ve been meaning to post about the appointment of Mitsuru Chino as the first female to take an executive position at a major Japanese trading house for a while now, and International Women’s Day seems like a good moment to do this.  Is this the harbinger of change in Japan though?

I get weary of being asked by people in Western companies whether Japanese companies or businessmen aren’t sexist and do we therefore need to appoint men as the customer liaison.  Most memorably, this was asked of me by a bunch of German men (no women) at a leading car parts company – who then proceeded to spend most of their spare time on the course I was facilitating in Japan working out which girlie bar they should visit next.  I so wanted to turn the mirror on them and say “physician heal thyself”.

But my own country (the UK) is even worse than Germany in terms of women in senior positions,  according to this survey I saw in the Financial Times today.  Japan is right at the bottom of the ranking of 20 countries, below the UAE.  So, even with the appointment of Chino, Japan has a long way to go to catch up.

Chino has a very impressive CV – a graduate of Cornell Law School, a semi professional classical singer and a World Economic Forum Young Global Leader.  She was born in the Netherlands and lived in the UK and the USA as a child. I saw the same pattern amongst the highly impressive women who joined Mitsubishi Corporation when I worked there in Japan – one woman was a scratch golfer, fluent English and Mandarin Chinese speaker.  She left a while ago however, to join a start up.  Chino only joined Itochu in 2000, so was a mid term career hire.

What we are seeing both in Japan and elsewhere, it seems to me, is that women are given senior positions because of their specialist knowledge, and to add a touch of diversity, not just in terms of being female, but because they have a non traditional career path.  However I get the sense that this means we are “useful to have around, but no need to take too seriously” when it comes to dishing out the senior executive, general management roles, which continue to be the preserve of men with one track CVs.  The question that we women ask ourselves is, do we want those jobs anyway?

Later addition:

A couple more senior female appointments have been announced – at JAL (ex cabin attendant who turned around customer satisfaction issues and controlled costs) and TEPCO (she was the person in charge of damages compensation for victims of the Fukushima nuclear plant disaster ).  Those useful women again – do the people facing dirty work the men don’t want to do.

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Surprisingly bitchy article about Sharp in the Nikkei

Not usually keen to kick a Japanese company with an advertising budget even when they’re down, the Nikkei daily newspaper has got round to translating the article that originally appeared in Japanese (subscription only), criticising Sharp for a lack of leadership, and going through 5 management consultancies (McKinsey notable by absence) in its quest to restructure and recover.  It would seem that someone inside the company has decided to start briefing against the President, Takashi Okuda, claiming “Apart from visiting plants and other sites, Okuda spends most of his time in his office on the second floor of the company’s headquarters” and saying that Chairman MIkio Katayama (who stepped down from the presidency when Okuda took over) was the key person in striking a deal with Qualcomm.  I wonder if Okuda will survive the year end results.

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Japanese Industrial Policy redux

I expect we’re going to see a lot more of these kind of announcements under the new Abe government: “Japan To Push Low-Cost Satellite Launches“($) (I bet this was a civil service/private sector plan put on the back burner under the DPJ, who did not like funding these kinds of big technology plans) and “Government Eyes Public Funds to Aid Manufacturing“($) (government plans to buy and lease back old plant to Japanese companies, so they can invest the money freed up in R&D or capital equipment – not exactly a market centric solution.)

My old mentor, Yorihiko Kojima, (now chairman of Mitsubishi Corporation)’s name keeps cropping up too.  He’s in the frame for the Japanese Chamber of Commerce top job apparently, and (as  detailed in a more than usually revealing article from the Nikkei) is part of the Sakura-kai, of top executives from Fujifilm, Mitsubishi Heavy, JR, Hitachi etc that had met with Abe or his advisors at least three times last year.  Under the previous Abe government, there was a predecessor group,’Kisetsu no kai’ mainly of people who had been at Tokyo University together, including former LDP politician  Kaoru Yosano.  And I well remember from  my Mitsubishi days that Abe’s older brother sat just around the corner on my floor in the Tokyo HQ, running the beer team I think.

It’s easy to see this as  reactionary old cronies getting together, reforming the Iron Triangle, I suppose, but if Kojima-san himself is anything to go by, there could well be some progressive influences coming to the fore too.  I wouldn’t be at all surprised if the announcements about getting more women into government and the LDP leadership didn’t have some private sector urging behind it from people like Kojima-san, and I wonder if there might be some more progressive, immigration and globalization friendly policies being tested out soon too.

 

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The risk of being a hikikomori (recluse) company in Japan – Softbank’s Son

A typically hard hitting set of comments in a year end interview with Softbank‘s President Masayoshi Son, earned him the front page of the December 30th edition of the Nikkei newspaper.  The English translation($) missed out some of the juciest bits in my opinion.

As well as pointing out the risks of Japanese companies relying too much on their domestic market and being “hikikomori” in a saturated and declining market, he also says that the various structural problems that the Japanese telecoms and IT industry faces are all too often used as iiwake (useless excuses) by his rival executives.  He remarks that when Softbank entered the mobile operator market, they had various handicaps such as poor connectivity and a small customer base, but they still did not lose their confidence that they could win. The Japanese industry relied too much on their unique standards to keep foreign competitors out, and then as a result found themselves unable to compete in global standard markets.

He again emphasizes the importance of being able to speak English, and also says that to recover their competitiveness, company executives need to redefine their “domain”.  “What is the point of sticking to your “hongyo” (core business) if this market is just a shrinking market?  Use your company’s mission as the base for creating a new strategy – that is an executive’s role.”

Just to add the final controversial cherry to the top, he finishes by proposing that Japanese companies compensation systems are uncompetitive, and they should consider stock options, like Silicon Valley, to revive the economy.

 

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The lack of leadership in Japanese companies

Yuji Akabane, formerly of Komatsu and McKinsey, now President of Breakthrough Partners is interviewed in the Japanese Nikkei Business Online about how Japanese companies can get their mojo back.

Akabane says that although there are various external factors such as the high yen, friction with China, the earthquake, world economic slowdown etc, Japan’s problems existed before that. He points to the lack of leaders that can be respected – in business and in politics – in Japan. He traces this back to Japan’s “mura” (village) culture – of working through collaboration and cooperation as a team, without expressing opinions. As a result, strategic thinking, starting with military strategy since the Meiji era, has been “poor”.

There were great business leaders like Soichiro Honda and Konosuke Matsushita, but they were the right leaders for the postwar era – it’s hard to say if they would really be effective in this day and age. Akabane concludes that it is not the case that Japanese management ability has worsened, but that Japanese companies always were bad at product planning and management, compared to foreign companies.

His remedies are for Japanese executives to be very clinical about what businesses they are good at and what businesses they are not, and to radically restructure, removing as much bureaucracy as possible, to ensure their vision really fits the 21st century, and then build a three year plan with targets for each year, and properly develop a global product planning and marketing capability.

He also recommends setting up teams to start new businesses, but acknowledges that such teams are often not very effective, as they are made up entirely of internal “left overs” who are not bothered if the new business fails. Turning such teams into subsidiaries also often ends in failure.

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A fresh look at governance lessons from the Olympus case

The Olympus Corp. trial has started and Tsuyoshi Kikukawa, the former chairman, pleaded guilty to covering up financial losses.  Sony Corp. has agreed to take a roughly 11% stake in Olympus, securing the company’s future. So, the worst outcome, which Kikukawa himself feared – that the company would be destroyed, and the livelihoods of many employees lost –  has not transpired and it would seem justice is being served.

Reading former Olympus President Michael Woodford’s autobiographical account of the whole incident, I can’t help wondering if there might have been a less nerve wracking way of resolving the firm’s problems. A key moment in the book for me is where Kikukawa, Woodford’s sponsor, realizing that Woodford is in effect asking him to resign and accept responsibility for the cover up, asks “do you hate me Michael?”

The question is incomprehensible to Woodford, who does not see his accusations as personal, but part of his fiduciary duty as a director of the company to make transparent what has happened and ensure the guilty take responsibility.

To Kikukawa, I can imagine the cover up was a desperate attempt to save the company, with no personal gain involved.  He is unable to disentangle his own fate and duty as a director with the company’s fate and his responsibility for its employees. An attack on his behavior seems like an attack on his person, by someone who does not seem to care whether the company lives or dies.

Woodford makes it very clear that he does indeed care whether Olympus lives or dies, but believes that the process of exposure, punishment and redemption will allow the company to be reborn. Many executives bred in the Anglo Saxon capitalist world are of a similar mindset – able to distance themselves from the company they manage, and to examine it objectively.

There is a less admirable side to this – a tendency to march into a company, believing that a bold reorganization, a sweep with a new broom, brushing out some of the people associated with the past, and putting in your own men (and it always does seem to be men) will get the results needed. So long as the numbers are good, the shareholders are happy. Casualties fall by the wayside, but can pick themselves up and start again elsewhere.

This is still not the case in Japan, and simply marking this down as a case of inadequate corporate governance ignores the fact that Japan does have corporate governance standards, which can and should be enforced. Furthermore, the Japanese corporate environment has become as tricky as that of the US or Europe. There are regulations governing overtime, diversity and “power harassment” that new foreign bosses ignores at their peril.

There have been too many cases of failure of foreign bosses in Japan for it to be wise for Japanese companies to continue to appoint foreign executives in the hope that this will somehow magically globalize the company. Foreign executives need intensive support and guidance, such as training in the workings of Japanese boards and coaching from those experienced in managing Japanese employees, if they are to make a difference without destruction.

This article originally appeared in the October 8th 2012 edition of the Nikkei Weekly

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Holding company executives to account

It seems as if a more than usually high number of chief executives and company presidents in the UK and in Japan are being publicly held to account these past few weeks.

In the UK, Stephen Hester, Group Chief Executive of the Royal Bank of Scotland, finally decided to give up his near £1 million ($1.59m) bonus. His decision was prompted by anger in British society about such a sum going to the head of a firm which had been bailed out with taxpayers’ money – at a time when many are facing job losses and pension cuts.

Shortly after that, his predecessor, Fred Goodwin, was stripped of his knighthood – an honour which had been awarded to him for “services to banking”, most notably the takeover of another major bank which led to the RBS momentarily being the biggest bank in the world.

Lloyds TSB, another major British bank, has just announced that its executives will forfeit their bonuses, to show accountability for an insurance mis-selling scandal.

In Japan, the President of NTT DoCoMo and five other executives took pay cuts in order to apologise to their customers for service outages. And in February of this year, the former President and several other executives of Olympus were arrested for covering up financial losses.

Looking for similarities and differences between these cases, the obvious odd one out is Olympus, as the arrests are of course on legal grounds, whereas, as the defenders of Hester and Goodwin point out, there were no legal grounds for what was done to them – Hester was contractually entitled to his bonus, and whereas almost all other people who had been stripped of honours in the past had been convicted of fraud or tax evasion, Goodwin had not. Lloyds TSB was at pains to point out that there was no wrong doing by their penalised executives.

Beyond the legal niceties lie bigger questions of what exactly the head of a company is for. In the UK, they are meant to act in the interests of shareholders. This means that if they take risks they are handsomely rewarded if those risks lead to a rise in the company’s value, and fired if they don’t. It is believed that people who can be both bold enough and capable enough to succeed at this are a globally scarce commodity, and scarcity commands high salaries and bonuses.

In Japan however, the leaders of companies are the representative of the employees and their companies’ face to society. They are not supposed to take risks which would endanger the livelihoods of the employees. When society’s interests are damaged by a company’s actions, the President and other executives must apologise publicly, taking collective responsibility. They are not meant to be motivated by greed or financial punishment, but the honour and social status of representing the company.

Given the recent public shaming of British bank executives, could it be that the UK is turning away from shareholder capitalism and towards a more Japanese model? The proof will be whether executives in companies which are not partly tax-payer owned are also held to public account.

This article originally appeared in the 5th March 2012 edition of the Nikkei Weekly

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From boiler suits to business suits, uniforms aren’t about conformity

725460-julia-gillard-japan-110423In the photos of Australian Prime Minister Julia Gillard’s recent visit to disaster stricken Minamisanriku, Miyagi Prefecture, where she has her arm around the mayor, Jin Sato, I couldn’t help noting the contrast between her black trouser suit and high heeled boots and the mayor’s overalls, trainers and baseball cap.

Each, in their way, was wearing a uniform. She had to pick something that was formal enough for a prime minister, subdued and respectful, but which would not look ridiculous as she picked her way through the rubble. The mayor is still wearing the kind of manual worker’s boiler suit that was donned by Prime Minister Naoto Kan, government and TEPCO officials and various company presidents in the immediate aftermath of the March 11 earthquake. Kan has since reverted to a business suit, as have most of the company presidents.

The messages they are giving are clear – Kan and the company presidents are signalling that the immediate emergency and relief work which they were rolling their sleeves up to supervise is now over, and they must get back to formulating the longer term policies for recovery. The mayor is signalling that that there is still much immediate recovery work left to do and that, for his town, the threat of further crises has not yet receded.

Japan is famous for having strict uniforms for every occasion. Perhaps you don’t see quite as many white gloved taxi drivers and certainly far fewer office ladies in waistcoats, skirts and ribbon ties than in previous decades, but despite the best efforts of Japan’s teenage students, uniforms are prevalent and mostly worn neatly and with pride – even for personal hobbies such as hiking. The easy explanation is to say this shows how conformist and group oriented Japanese people are. Or in the case of company presidents, one could say that they are trying to show they are not putting themselves above the other employees.

Actually, having worn a traditional sailor uniform to a Japanese school for several years myself, I think that the Japanese attitude to clothes and uniforms is a lot more nuanced than simply being about conformity or egalitarianism. It is as much about the message you are sending to yourself as to others. By putting on overalls, trainers and a baseball cap in the morning, the mayor is readying himself for action. The ritual of dressing puts the person in the right frame of mind for the day ahead.

It’s related to the traditional way to learn in Japan, from the outside in or “minitsukeru” – which literally means “sticking onto the flesh”. By getting the externals right, the internal settings will adjust accordingly, until the action becomes instinctive.

It’s not about conforming, rather it is about accepting that we have many identities, and that sometimes wearing the correct clothes helps us fulfil those identities better or facilitates the switch from one identity to the other. It also signals the seriousness of our intent to others.

This article originally appeared in the May 9th 2011 edition of the Nikkei Weekly.

 

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What are companies for?

I mentioned in my previous article on customer service that there were multiple reasons for the differences in customer service between Japan and the UK and that these reasons could be traced back to different features in Japanese and British corporate cultures.

The first aspect I would like to look at is kigyou rinen (the mission of a company) and the historical beginnings of Japanese and British companies. As is well known, the Industrial Revolution started in the UK, but being first has not necessarily meant the UK got the best (London Underground rail would be one example). In fact we often ended up making lots of mistakes that others can then learn from.

An awareness of the social problems that arose from the Industrial Revolution in the UK is still strong in British people’s mentality. We tend to think of company owners as rich “fat cat” capitalists, ruining our green countryside with their “dark satanic mills” (from the famous British hymn, Jerusalem) and exploiting their workers, without any care as to their living conditions and health.

Japan’s later industrial revolution had its social problems too, but there were other strong forces, such as the urge to modernize Japan, and to be equal to Western nations in industrial and military power. The rinen or mission of Japanese companies that matured in the late 19th century reflect the idea that companies should be for the benefit of the nation, and this mission continued through to companies such as Matsushita, founded in the early 20th century, with “national service through industry” in its Seven Principles. Then after the Second World War, there was the amazing “Japanese Economic Miracle” where the whole nation worked so hard to bring Japan back to being a leading industrial nation. Again, companies founded around then, such as Honda, very much emphasised the happiness of its workers and the company’s social obligation.

If you look at the UK’s post-industrial companies and their corporate mission statements, you do not see much about contributing to society or the happiness of workers – until recently, when Corporate Social Responsibility became fashionable. Working class pride collapsed when traditional industries were demolished in the 1970s and 1980s, and people lost any faith in companies as caring employers thanks to the mass redundancies that happened around then. The service sector jobs that were meant to replace the jobs lost in mining, steel and engineering are seen as demeaning “Mc Jobs” and very insecure.

In Anglo Saxon capitalism, companies are meant to be shareholder oriented – profitability and returns to shareholders are the only goal. Unlike Japan’s stakeholder oriented companies, where the stakeholders are employees, customers and society, and shareholders come a low fourth in priority. Consequently, when a customer in the UK is facing a service sector employee, he is usually facing 150 years of class resentment, a loss of pride in manual labour and no sense that the company that person is working for has any care for their well being or duty to the customer or society as a whole. There are some exceptions to this, and I will investigate these in my next article.

This article originally appeared in Japanese in the Eikoku News Digest

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Processes and rules – the emphasis on ‘kata’

Japan is usually presented as a highly process-oriented society. One example of this is the emphasis given to kata, form or way of doing something in Japanese martial arts, over the actual result. Martial arts training consists of repeating the same action over and over again until a desired body position and movement is achieved and has become second nature to the practitioner.

I have bitter memories of the weekly kanji tests I used to fail when I went to Japanese elementary school. I thought the characters I wrote looked the way they were supposed to, but the teacher would mark them as incorrect; somehow she knew I had drawn the strokes in the wrong order. There is one, and only one, right way of doing things in many areas of Japanese society.

Maybe this is why a Japanese acquaintance said that when he alights at Heathrow Airport, he breathes a sigh of relief that he is now in a country where he can relax. He was replying to a comment I had made that when I reach Narita International Airport, I breathe a sigh of relief knowing that I am now in a country where everything works.

Many British working for Japanese companies, while recognizing the attention to detail and highly disciplined work ethic of their Japanese colleagues, also complain that Japanese are often less respecting of British rules and processes. When I ask for more details of the situations in which British rules or processes are bypassed, it usually turns out that a customer or someone else inside the company has asked for an exception to be made. Deadlines that were supposedly set in stone suddenly become flexible.

As the customer is not just king in Japan but “god,” it is easy to understand why rules are easily broken for customers, but the exceptions made for colleagues are less excusable in the eyes of many British people. The British sense of fairness kicks in, and any attempt to ignore rules governing the treatment of people is seen as unfair or evidence of favoritism.

British people regularly flaunt work-related rules or crash processes, however – whether it be in customer service or on the factory floor – if they think the result is the same, or, less admirably, if it makes life easier and they can get away with it. They do not unquestioningly obey rules and processes the way Japanese workers are taught to.

One British manager with Japanese subordinates told me how delighted he was with his Japanese team. “You tell them, just once, about a process that needs to be done each day and they will do it, exactly how you told them, without fail,” he said. “There’s no need to check up on them all the time. In fact, I even forgot to tell them not to do it any more when it was no longer necessary and, of course, discovered they were still doing it months later.”

With his British team members, he not only has to regularly check that processes are being implemented but must ensure that the way he checks, and any ensuing discipline or reward dished out, is seen as transparent and fair.

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

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