Management and Leadership

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

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

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

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

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

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

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

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

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

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

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Families like to tell good stories!

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

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

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

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

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

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

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

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

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

“Without competition, people will not develop”

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

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

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

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

The Mitsubishi thoroughbred who was called an alien

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

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

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

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

Why Mitsubishi executives rarely represent Japanese business

The heads of the Japanese Chamber of Commerce and Industry, the Keidanren (Japan Business Federation)and the Keizai Doyukai (Japan Association of Corporate Executives) are considered to be the three key positions for business and industry in their interactions with government – to influence government policy and “receive ministerial guidance” in return. So business and political commentators always like to speculate and analyse who has been chosen and from which company, and why.

When the appointment of Yoshimitsu Kobayashi, the current president of Mitsubishi Chemical Holdings as the new head of the Keizai Doyukai was announced in November of last year, Nikkei Business magazine jumped on it as an opportunity to look at how the corporate culture of the Mitsubishi group (keiretsu) is perceived by the Japanese corporate world.

Apparently Kobayashi’s appointment had the unanimous support of the Keizai Doyukai members and his contribution as a member of the government’s Industrial Competitiveness Council also stood him in good stead. It’s also thought that he will step down as President of Mitsubishi Chemical Holdings in 2015 so will be able to devote himself full time to the association.

Kobayashi stated that he “wants to be involved in economic activism from the basis of contribution to society [corporate social responsibility]” – presumably an echo of the “kaiteki” philosophy he espoused at Mitsubishi Chemical Holdings, and also to counter the kinds of accusations that the Nikkei Magazine journalist himself goes on to make, which is that the Mitsubishi group of companies has so far been seen as being mainly concerned with protecting its own members’ interests.

The Nikkei points out that no member of the Mitsubishi group has headed up any of the three organisations for the past 20 years. Yorihiko Kojima, current chaiman of my alma mater Mitsubishi Corporation, the group’s trading company, was mentioned as a possible successor to lead the Keidanren, but in the end Sadayuki Sakakibara of Toray was chosen, as it was felt that it was better to have a manufacturer at the helm. Hideaki Omiya of Mitsubishi Heavy Industries was also in the frame, but rejected because of MHI’s involvement in the defence industry.

All these appointments, it seems to me, can be explained by the way Japanese businesses strive to be seen as socially responsible and ethical and as representative of Japan’s self image as a nation, as much as it is about political connections.

Mitsubishi is usually contrasted with the Mitsui group as being “organisation” focused whereas Mitsui is more about “people”. I’ve asked many Japanese business people what this means in practical terms. Apparently when dealing with Mitsui, internally or externally, who you know and who they know is the key to getting business done, but with Mitsubishi, the individual is less important than getting the organisation to work for you. The Nikkei says it means Mitsubishi group companies are motivated to do things only by how the group will benefit as a whole, which accounts for the caution with which they are treated by other companies outside the group.

So why was Kobayashi chosen? Partly because there were no other candidates, says the Nikkei. Lawson President Takeshi Niinami (who is actually a Mitsubishi Corp alumnus, and Lawson is a Mitsubishi group company, so I think the Nikkei might be overstating the case somewhat re Mitsubishi’s lack of involvement) has been poached by Suntory Holdings so is out of the race for such positions. Also many Presidents are too busy with global competitive pressures to spend the money and time needed to head up the top of a business group.

The Keizai Doyukai is also seen to be losing influence. It was close to the opposition Democratic Party of Japan, but now the ruling LDP has revived, the Keizai Doyukai has lost its raison d’etre. “I was worried during the vetting process, but I slowly began to realise it was something I had to do” says Kobayashi, which Nikkei terms a rather innocent comment – “Kobayashi is being viewed somewhat coldly by those around him.”

We will transform Takeda into a global company within 5 years

Christophe Weber, President and COO of Japanese pharmaceuticals company Takeda, responds to “7 Questions” in the Nikkei Business magazine:

1. You announced your new strategy in October?

I spent the past 8 months since I joined Takeda [from GlaxoSmithKline] talking to various employees, from which I have reached an understanding of Takeda’s strengths and weaknesses. The strategy is to support Takeda in becoming a global, R&D led company. The structure needs to be changed to become more effective, and to develop global minded human resources.

2. How long is needed for this transformation?

I am expecting it to take 5 years. We will focus the structure on the 4 disease areas of R&D strength in Takeda such as oncology and gastroenterology and also vaccines. We will join up the R&D functions which are distributed across various countries, and strengthen their links to improve their efficiency at the same time , as well as their agility.

3. Doesn’t globalization go against becoming more agile?

It’s true that globalization can cause the organisation to become more complex. However each R&D region will be given responsibility and decision making powers. Sales channels will also be delegated more decision making authority. This should enable them to have a degree of agility and for us to grow as a global company.

4. To be a truly global company, you need to expand in developing markets?

We bought the Swiss company Nycomed in 2011. Nycomed has strong sales channels in Russia, China and Brazil. We will develop these further, to sell drugs that we have been selling in Europe and North America. Developing markets are reforming their healthcare, and this will grow rapidly in the next decade.

5. The majority of your management team come from outside Takeda. Why are so few executives from within Takeda?

I expect to hire people from outside Takeda only when there are no suitable candidates within. If there are too many external hires, it gives the impression that we are not developing our own people sufficiently. Takeda currently lacks people with global experience. We are currently thinking how to develop more globally minded people.

6. You attracted a lot of attention as a foreign executive when you were appointed President in June?

It is still rare for a non-Japanese to run a Japanese company and it is a difficult job. However, when Chairman Hasegawa called me to talk to me about this, I thought it was a challenge I wanted to take up. Mr Hasegawa has a strong will to take on the world. I felt he was a fellow spirit.

7. There was some opposition to you as a foreign President from shareholders?

There were many opinions expressed, and I listened to them with respect. It is to be expected that there will be some negative reactions when a foreigner takes on this big a reform. History will judge whether this reform is correct. I was at my previous company for more than 20 years, so I am different from other foreign CEOs who change companies every few years. I have a similar character to the Japanese in that I value stability.

Japanese management by telepathy and Ninja skills does not work for overseas M&A

The precis below is from an article written by Chieko Matsuda (Executive Director of Booz Allen Hamilton in Japan) for Nikkei Business Online’s “Corporate Governance for Everyone” series, in Japanese, but I felt as I translated it, that it was my own words, so completely do I agree with what she is saying:

Japanese companies often have an “overseas business development unit” to carry out their global M&A. However the mission of this organisation should change depending on the stage reached in expanding overseas. Even if it starts as “business development”, it often turns out that it has to manage the subsidiaries as well. So at the same time as stepping on the accelerator to grow the business, it is supposed to press on the brake, as a shareholder and auditor. When it comes up with solutions to this dilemma, nobody will help the unit out, claiming that “overseas business is your specialist area”, and “nobody speaks English in our unit”

The audit function needs to be strengthened – Japanese companies are far too weak when it comes to risk management with regard to their overseas operations. It is necessary, if expanding overseas, to “control through structure” and review rules, processes and formats. Japanese style management through telepathy will not work for overseas M&A.

In order to design the structure in detail, it is necessary to decide on the direction. What the company should not do, and what it should preserve. If this is left vague, then it will lead to a sense that “we have no idea what the parent company is thinking”.

The top priority therefore is to set the corporate mission and values. What are we trying to do, how will we do it, which way are we facing – it is control through corporate culture as well as through structure.

The corporate vision needs to be concrete, and something that can be translated in an understandable way into many languages. It should be a base for making decisions – to go left or right – not just pretty words.

If the corporate vision and culture is not secure, then it is difficult for diversity to take root. WIthout diversity, the company will not be competitive. A homogenous workforce was efficient for labour intensive production, but we are now in an era of competition of ideas and innovation. New ideas and innovation require a diverse workforce, and what will unite a diverse workforce is common corporate culture and vision.

It is of course partly up to the top management to communicate this corporate culture and vision, but middle management must also be able to use it within their teams. It can’t just be about “reading the air” in the traditional Japanese Ninja way. What do you do if there is a claim from a customer? It cannot be resolved through kiai (“fighting spirit”) and konjou (“guts”). Wouldn’t it be convenient if you had a touchstone, for when there was a problem to be solved?

If you are being acquired by a Japanese company, you may be interested in Japan Intercultural Consulting’s (represented by Rudlin Consulting in EMEA) post merger integration services.

Overseas experience and Japan’s elite, past and present

When I started working at Mitsubishi Corporation in London, I was intrigued by the fact that Mitsubishi had first opened the office there as early as 1915. Most British people, if they have thought about it at all, would assume Japanese companies did not establish themselves in the UK until well after World War Two. In fact it turned out Mitsubishi Corporation was a relative late comer to London amongst the sogo shosha (Japanese trading companies), although the Iwasaki founding family had links with the UK from long before 1915.

I was reminded of these links thanks to a recent talk by Dr Ohnuma Shinichi, professor of Experimental Ophthalmology at University College London (UCL) to Japanese business people in London, where he showed slide after slide of the names of the Japanese future elite who studied at UCL in the Meiji era, starting with the 14 students from the Satsuma clan in 1865, through to Iwasaki Toshiya, who studied Chemistry at UCL in 1901.

Dr Ohnuma was showing us these slides to remind us of how the founders of the modern Japanese state and business had fearlessly travelled and lived abroad, and there was a keen discussion afterwards as to how this spirit of adventure could be revived amongst young Japanese people now.

One of Dr Ohnuma’s suggestions was that Japanese companies should demonstrate that there is a positive advantage to have worked abroad, and to ensure there are proper roles for their employees with overseas experience to fulfil when they return.

At Mitsubishi Corporation it was an unwritten rule that top executives have overseas experience, and as a consequence, most new graduates join Mitsubishi Corporation and other trading companies in the expectation that they will be posted abroad. I realise however, that for other major Japanese companies, whose origins are more domestically oriented, it would be rather hard to implement this rule straight away, when in most cases hardly any of their current executives have overseas experience.

Smaller companies may have more scope to put such criteria in place however. The leaders of such companies can set the tone themselves, just as Sony’s Morita Akio did in 1963, when he controversially relocated himself and his family to New York, in order to understand the US market better.

It is surely no coincidence that the current President of Sony, Hirai Kazuo, lived abroad as a child and worked for Sony overseas. Despite Naruke Makoto (ex President of Microsoft Japan)’s assertion that nobody has ever succeeded who went to international school, Hirai did indeed go to the American School in Tokyo.

Sony may be having its problems right now, but I truly hope it succeeds in its revival plans, and proves that the spirit of entrepreneurism, openness to the world outside Japan and adaptability to change of its founder can live on, if the founder himself has set the tone correctly by his own actions.

(This article was originally published in Japanese, for the Teikoku Databank News 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.)

My book on the history of Mitsubishi Corporation in London since 1915 is now available in digital Kindle format (link to amazon.co.uk)

Category: Management and Leadership