Marketing

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.

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。

Marketing in Japan the Kit Kat way

At my last workplace it became a custom in our global marketing team for anyone visiting Japan to bring back the latest Kit Kat flavour – green tea, cherry blossom and even edamame (soy bean) flavour. As a mainly British team, we found it bizarre to see what seemed to us an iconic British brand become so utterly Japanese.

Of course the Kit Kat brand is actually owned by a Swiss company, Nestle. The President of Nestle Japan, Kozo Takaoka, turns out to be the person who instigated the campaign, turning Kit Kat into a premium brand, to the surprise of the Swiss headquarters. The editor of Nikkei Business Kenji Tamura asked Takaoka in a recent interview if this meant European marketing was not as advanced as Japanese believed.

Takaoka’s response is that Nestle HQ itself is beginning to wonder if marketing has become bloated. The marketing costs for Nescafe, for example, cover 100 countries and 100 flavours of Nescafe. Advertising is still effective in developing countries, but no longer in matured markets. TV advertising and celebrity endorsement worked in Japan during the period of rapid economic growth, but this method is no longer persuasive, Takaoka believes.

“Marketing is the management of the company” says Takaoka, because to manage a company you have to innovate to produce new value and work out how to get that to the customer. “Up until now this kind of marketing was lacking in Japan. We have continued with the developing country model. We don’t seem to be able to escape from that model – that we just need to make products and then advertise them” – words that will resonate with my former marketing team colleagues I suspect.

Monozukuri still has merit, but smarter marketing a must

I’m a big fan of Japanese monozukuri (“the art of making things ie manufacturing) and said so in a letter published in the Financial Times recently. It attracts criticism for causing Japan’s economy to be too reliant on exports, and there are worries about how an aging population can supply enough workers to man the shopfloor. But I really think Japan should “stick to its guns” in this regard.

Here in the UK we are suffering the effects of having moved too far away from manufacturing. We’ve ended up with a society where everyone thinks they should be highly paid knowledge workers or celebrities. We have failed to give enough status and dignity to making things.

A diverse society like the UK needs a full range of jobs to stay healthy. I am not saying this out of a patronising assumption that manufacturing jobs are necessary for the unskilled and uneducated in society and that such people are somehow not fit for anything else. There seems to be a fundamental human need to see tangible results from our labours.

Besides, a career in manufacturing requires far more than dexterous fingers these days – thanks to Japanese techniques such as just-in-time delivery, visualisation, root cause analysis, multi-skilling and so on, anyone wanting to succeed in manufacturing has to be computer literate, have an understanding of logistics and be capable of rigorous problem solving.

It is noticeable in this recession that many manufacturers have struck deals with their workers on pay cuts or working time reductions. rather than resorting to mass redundancies. There is a high cost to training a fresh set of employees when the economy picks up, so it makes more sense to retain the current workforce.

In fact it is knowledge work that has proved to be more vulnerable than expected. I know of many bankers, accountants and lawyers who have been made redundant, thanks to our British economy based on trading of over-hyped assets such as houses and fancy financial instruments. Ironically, many of them are now turning to “manual” work; cookery, gardening, farming, starting a vineyard and so on.

One problem I have noticed with monozukuri, however, is the assumption that making lovely things is somehow enough. At a seminar I facilitated recently, several senior salespeople, in electronics, sanitary ware and banking, all noted that their Japanese companies did not seem to have any understanding of the basics of marketing, particularly in the current highly competitive climate. “My bank doesn’t even have a pitch book!” the banker told me. I pretended to know what he meant, and later found out that this is a fundamental marketing tool for any Western investment bank – containing all the profiles and experience of the proposed team.

In the past, Japanese companies could rely upon relationships and their reputation for quality to sell their products and services. Now they need to think long and hard about differentiation and value added. Why do we make this product and not that one? What makes our product or service better or different? Should we be making this product at all? When they have answered these questions, their sales people can sell more convincingly, and the Japanese economy can pick up again.

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

Marketing Japan to attract foreign investment – a fourth arrow?

Prime Minister Abe made a short, punchy speech at the “Invest in Japan” event I attended yesterday in London. Perhaps not quite as passionate as his longer speech at the Guildhall last year, but his key message was clear, that Foreign Direct Investment was an important pillar of his growth strategy and that he was aiming, with Abenomics, to make Japan a more market friendly, more exciting destination for foreign companies.

The current fashion is to say that Abenomics is losing steam, because of the lack of progress with what Abe has termed the third arrow – deregulation and structural reform. My view on this is that the Japanese government can deregulate and pass new, more liberal laws all it likes, but without significant support and action from major Japanese companies, not much will happen.

So foreign investment might be a way to stimulate action and change, if foreign competition is able to enter the Japanese market more aggressively. There is something of a chicken and egg situation, however, in that foreign investors often say they need to see deregulation and structural reform implemented before they will invest in Japan.

There is also a concern, voiced by ex ambassador Sir David Wright at the event, that foreign companies are still seen as “foreign” and may not get equal access to the benefits of any reforms or incentives. The mayor of Kobe was quick to pick up on this point – “foreign companies in Kobe will be seen as Kobe companies” he said, which is no doubt a legacy of Kobe’s long standing history as an international port. Certainly we felt very at ease when we lived in Kobe, as long ago as the 1970s, despite not being members of the rather snobby expat Kobe Club.

So Abe gave concrete examples of where there had been deregulation, in the energy sector and pharmaceutical sectors and also a strengthening of corporate governance, based on British standards. The rest of the morning was given over to presentations by the mayors of Fukuoka and Kobe, and the governors of Mie and Hiroshima prefectures, who were keen to emphasise another area of reform – the new national strategic special zones, where regulations will have a lighter touch, to enable innovation.

It seems Japan’s mayors and governors have more autonomy than in the UK, so many of them were able to showcase particular initiatives and tax breaks they had introduced to encourage investment into their regions. I had been dreading these presentations, expecting a succession of grey men explaining word for word, dreary, text box heavy powerpoint slides in incomprehensible or badly interpreted English, but to the audience’s great delight, the 4 regional leaders wowed us all with their youthful energy, dynamism and sometimes excellent, but always bravely and strongly delivered English, which seemed to come from the heart rather than a script written by someone else.

These men (there was supposed to be one woman too, the mayor of Yokohama, but she was unwell) could be Abe’s fourth arrow – if they can make a convincing case for a Japan as an Asian hub, beyond the bureacracy and vested interests of Tokyo – but I think a bit more strategic thinking behind the marketing is needed. Some sectors in the UK are already aware of Japan’s potential – I was delighted to see Paul Alger of the UK Fashion and Textile Association steer Hawick Knitwear towards Japan as a basis for entry into China, in the recent BBC programme The New Troubleshooter.

The Fukuoka mayor got some way there, with his eyecatching map showing that Fukuoka was equidistant to Shanghai, Seoul and Tokyo. Not to mention the fact that KLM has just started flights from Amsterdam to Fukuoka – a point that caught my attention, as we are about to move to Norwich, and I am looking forward to using Norwich International (sic) Airport to get to Japan, as it has several KLM flights to Amsterdam a day.

There was rather too much emphasis on the nice lifestyle to be had in Japan’s cities (and it made me very nostalgic for the lovely times I had living in Hiroshima and Kobe) and not quite enough hard headed business appeal, particularly along the lines of the point that Steve Crane, of Business Link Japan, made in the final presentation of the day, that it is important to move near your ecosystem and supply chain, when considering location.

The leaders did note the various industries or specialist zones that they were focusing on regionally, but it’s possible that they took it too much for granted that we would understand how industrial clustering works in Japan. Actually, as most of the audience were the usual Japan gang, this kind of marketing would have been wasted on us anyway.

Which brings me to my biggest constructive criticism – the government bodies that organised this seminar, Ministry of Economy, Trade and Industry, Embassy of Japan in the UK, the Japan Local Government Centre and JETRO, really need to network more with the various regions, cities and companies in the UK, so that more representatives of UK companies come to these seminars. JETRO is apparently about to hire some industry sector specialists in Europe as consultants – I presume to help with that. The JLGC head told me that twinning Japanese cities with regional governments in the UK has proved difficult, as no British politician or bureaucrat in this current climate of austerity wants to be seen to be jetting off to Japan on a sushi and sake junket.

As Sir David Warren, former ambassador to Japan, succinctly put it, “it needs to be proved that Japan can be more than a profitable niche”.

Wally Olins CBE 1930-2014

I was very sorry to hear of the death of Wally Olins on Monday. Although he was 83, and had recently undergone an operation, it seemed he was recovering well, and I was looking forward to his postponed book launch for Brand New: The Shape of Brands to Come and maybe catching up with him before then as he had said he had wanted to chat further with me about Japan – which was typical of Wally, that despite his immense expertise and experience, he was always curious to know more and very generous and open to relative newcomers to his field.

We had worked together both when I was at Fujitsu for their new brand promise “shaping tomorrow with you” and after that with his company Saffron on another corporate vision project for a Japanese owned subsidiary. As Ian Stephens, principal of Saffron, has said in their statement about his death, Wally was infectiously charming but also famously impatient – he sometimes sought reassurance from me that his straight talking style was not going to upset Japanese executives.

Although he was impatient with Japanese companies’ caution, indecisiveness and inarticulacy, I sensed Wally was approving of Japanese companies because they instinctively “get” (and had been practicing, at least in Japan) the concept he had been preaching, that a company’s brand is about nurturing its collective identity, giving it an emotional connection to its customers.

I understand his impatience now, as he did seem, despite his four score years and more, like a man who still had a lot more he wanted to give and achieve. The best compliment we can pay him therefore is to buy his new book, and keep the flag flying for his work and ideas.

6 reasons Japan is behind as a global brand

Prof Noboru Sato, of Nagoya University and formerly of Honda Motors and Samsung gave the following 6 reasons (article in Japanese) that Japan is behind, not only in the globalization of business, but in terms of global cultural influence – in the arts and sports and also the strength of “Brand Japan”. Many will come as no surprise to Japan watchers:

1. Education

Fewer Japanese students are studying abroad and Japanese universities are slow in increasing the number of foreign academics they hire. As Sato acknowledges, Japanese universities need to make their academic staffing more meritocratic if they want to attract the best in the world.

2. Young Japanese not working abroad

Sato points to how Japanese companies have not been proactive in hiring “returnees” – Japanese graduates who have spent part of their education overseas. However, and I would concur, he acknowledges this has changed recently, and many companies have been taking steps to hire foreign employees and returnees in Japan. But, as Sato points out, Japanese companies do not make any distinction in terms of pay or promotion prospects for people who have Masters degrees. This makes them an unattractive prospect for returnees and foreign graduates.

3. Uncompetitive education

Although Japan has very high literacy and numeracy rates, its educational spending as a proportion of GDP is one of the lowest in the world. In other words parents in Japan are footing the bill. Computer literacy is lower than most developed countries.

4. Industry’s lack of global competitiveness

All the famous names in electronics have been suffering recently – however Sato sees some grounds for optimism that they may regain their strength.

5. The penetration of Japanese food culture

Sato gives the first 4 reasons a fairly cursory explanation but really goes to town on this one – he’s clearly had one too many bad “Japanese” meals abroad. In Sato’s view, the “fake” Japanese restaurants, run by non-Japanese, in Europe, North America and South Korea, are ruining the Japan brand, as are the recent scandals in Japan’s own restaurants and department stores, where lower grade foods were passed off as higher grade, or wrongly stated to be from specific regions.

6. Tourism

Japan ranks #33 in the world for tourist numbers, and South Korea, with half the population of Japan, ranks 23rd. Japan should be attracting more tourists given the richness of its culture and food.

Sato concludes that much of this could be solved if there was more sense of a need for competitiveness, from primary education onwards, in Japan. There needs to be more external stimulus and awareness of the need to be competitive relative to other countries. He does not give any concrete proposals on how this is to be achieved, however. In a sense Japan has got itself in a virtuous (or vicious) circle, in that it has become one of the nicest places to live in the world, so why would Japanese people feel any sense of urgency to compete with or live in other countries, which seem more dangerous and insecure – and as for the food…

High brand recognition for Japanese companies does not necessarily mean they are well known

When it was first suggested to me that I join Mitsubishi Corporation in the UK, I have to admit I thought it was the car manufacturer, Mitsubishi Motors, despite the fact that I should have known better, having been brought up in Japan and spent a year at a Japanese university.

After a couple of years exporting British chinaware and shoes to Japan for the trading house, I was transferred to Tokyo to work in the building materials sales team. The apartment that my employer found for me had no furniture, as is normal in Japan. So I decided I would buy what I needed at Marui department store, as I had heard they offered credit cards and I did not have enough savings to pay for the necessary bed, sofa and refrigerator.

When I approached the credit card application desk, a look of panic flitted across the clerk’s face – a young, foreign, female was presumably not going to be a good credit risk. I reassured him I could speak Japanese, but he was very concerned whether I could write well enough to fill in the application form.

I took out my Mitsubishi Corporation business card in order to copy down the address, and as soon as he spotted the distinctive three diamond logo, his face lit up. “Mitsubishi Corporation! Can I phone your team leader to check your employment details?” He returned from the call with a huge smile on his face, and tried to make me buy two televisions and a better refrigerator.

The Mitsubishi name worked magic for me once more in my career there. I had stupidly forgotten my passport on a trip to Frankfurt from London. The German border police were not impressed, particularly as I had no other form of ID, not even a driving license or credit card. I suddenly remembered my Mitsubishi security pass.

Again, the atmosphere improved dramatically, and one policeman even tried to make a joke of it – “we will let you through, if you can get us a Shogun!” (as the Pajero sport utility vehicle was known in Europe at the time).

I decided this was not a good moment to explain that Mitsubishi Corporation was not the same company as Mitsubishi Motors, and ruefully remembered how I had made the same mistake myself a few years previously in the job interview. In retrospect, it is intriguing that the Mitsubishi brand instantly evoked trust, even for a German policeman who did not really know what it stood for.

This was twenty years ago, but I suspect this paradox persists for Japanese companies when it comes to recruiting in Europe. There is a generally favourable view of Japanese companies, but nobody is quite sure what they do, and therefore there is a doubt as to whether becoming an employee of a Japanese company is a good career move.

It’s no surprise, therefore, that recently the larger Japanese employers in Europe are indeed putting more effort into broader corporate communications, rather than just product advertising. This is presumably in order to attract the best quality employees.

This article by Pernille Rudlin first appeared in the 10th June 2013 edition of The Nikkei Weekly and also appears in Pernille Rudlin’s book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe”, available as a paperback and Kindle ebook on Amazon.

Thought leaders can help Japan win the global communication war

Comparing the volume of visits to our Japan Intercultural Consulting website in 2011 to 2010, I was struck by a sudden step change in visits in the final quarter of 2011. We have been active for a couple of years’ now in promoting our website content via Twitter, Linkedin, Facebook and Mixi, so to understand what has changed, I did some further analysis. It seems the ramp up is due to the recent popularity of smartphones and slates, giving people the ability to access these social networks while on the move.

It’s nothing new in Japan of course, to kill time while waiting or travelling (“jikan tsubushi”) by accessing social networks on mobile phones. However, the technology and understanding of how to launch such a service never made it outside Japan, allowing Apple and device manufacturers such as Samsung who use Google’s Android operating system, to gain the edge.

A couple of years’ after iMode, the first Japanese mobile internet service, was launched in 1999 by NTT DoCoMo, I was invited to speak to a group of British political bloggers about what was then being termed “moblogging”. My talk did not go down very well, thanks to the cynicism of the audience that anything useful could be communicated via moblogging, which I tried to counter by pointing out a key driver for people using the internet is to connect to other like minded people and thereby gain information relevant to them. It may well be impossible to convey complex political arguments via mobile phones, I admitted, but I pointed out there was evidence that people in Hong Kong used their mobile phones to organise pro-democracy protests.

Ten years’ later, assertions about the Facebook Revolution, and the use of Twitter and mobile phones during the Arab Spring have become unremarkable. Facebook has overtaken Mixi in terms of subscriber numbers in Japan, and Twitter is even more popular than Facebook.

It must be galling for Japanese mobile technology companies, but, undaunted, they are looking to promote their technology, services and content into the global market once more in 2012. Based on my experience ten years’ ago, I would say this cannot be done through nifty technology and fancy features alone. Japanese companies must learn how to communicate their leadership and vision for these technologies, both in business to business and business to consumer marketing.

A Japanese commentator lamented a few months ago that no Japanese city had made it into the top ten eco cities of the world, and yet Japanese patent numbers for eco technology far outstripped any other countries’. He put it down to Japan losing the communication war – an inability publicise what Japanese companies are doing – in English, inevitably.

Japanese companies will need the support of their employees overseas to win this war. They need to encourage thought leaders, who can generate white papers, podcasts, blogs, articles, speeches and interviews for their local markets. And the Japanese companies must support them by giving them as much material and insight as they can into the products and services they have.

This article originally appeared in the January 23rd 2012 edition of the Nikkei Weekly

The above article was highlighted by the Japanese Nikkei Weekly editorial team as well . The Nikkei editors commented that although there are more Japanese than before who are capable of expressing ideas globally, due to Japan’s relative economic decline, their influence is less than it once was.

An excerpt from the Japanese commentary is below:

今回は“thought leader”と手を組むことの重要性を訴えています。thought leaderとは、多くの人が耳を傾けるようなアイデアや主張を持つリーダーを指します。インターネット時代にあってはアクセス数の多いブロガーなども含まれるでしょう。筆者のパニラ・ラドリンさんは、日本企業にとって進出先でそんな影響力のある人を味方につけることが大切だと強調しています。

議論をさらに進めれば、日本の外にいるリーダーに頼るだけでなく、日本の経済界、個々の日本企業の中から世界に発信していく人を育てることも必要でしょう。科学技術や文化・芸術の分野では世界がその発言に注目する日本人が増えていますが、近年の経済界や政界は対外的な影響力が低下している印象が否めません。２５日から「ダボス会議」が始まります。対外発信力のある日本人エグゼクティブたちの活躍がまたれます。

For everything in Japan there is a season, even neckties

A former colleague of mine, a Japanese man who has been living in London for the past seven years, told me what he most misses about Japan is the distinctive seasons. Of course the UK also has four seasons, but this summer it has been rainy and cold more than usual and we all fear that it will merge seamlessly into the dark, damp days of autumn and winter.

Japan is well-known for its cherry blossom viewing season and anyone who has lived any length of time in Japan will also realise how obsessed most Japanese are about what food is best eaten at which time of year.

This sense of seasonal “rightness” even extends to clothing. I remember once hearing my home stay family debate whether it was too early in the autumn for the father to wear his maple leaf tie.

All this illustrates how being tuned into the seasons is vital to getting the right look and feel to your advertising campaigns and product packaging but there is also a strong commercial rhythm to the Japanese year which should not be ignored.

If you’re thinking about how to time your marketing campaign, there two bonus seasons each year, in summer and just before the New Year, when you’ll notice that advertising for luxury goods suddenly ramps up.

If you’re looking for the right timing for business proposals, it is also worth remembering that most Japanese companies operate on an April 1st to March 31st financial year. April 1st is when new graduates join companies and major reorganisations, promotions and salary changes are implemented. March is therefore a nervous month in most Japanese companies, and not a good time to propose new ideas. A mini-reorganisation is often carried out at the half year point too, on October 1st.

Japanese employees only take about half the holidays they are entitled to and so do not disappear for two weeks to a month in the summer as Europeans do. Still, business meetings in Japan are usually discouraged in July and August. This is partly because some factories close down around the Bon holiday period in mid-August, when people return to their hometowns to visit family graves, but also because the hot and humid weather saps people’s energy.

In September the business trip season starts, climaxing in the attempt to have all payments settled by the calendar year end, in order to start the new year with a clean slate. Unfortunately for those in Europe and North America who are working with Japanese companies, this final push coincides with the Christmas holidays.

The only time when Japan truly shuts down is in the first week of the year, and then another busy period begins, to the end of the financial year, and the annual ‘yosan’ (budget) panic. Then April is taken up with the after-effects of the reorganisations, after which everyone needs the Golden Week holidays at the end of April, through to early May. And so the cycle starts again.

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

Category: Marketing