Strengthening human resources has become increasingly urgent for Japanese companies since 2017, rapidly catching up with improving profitability as the top management priority, according to a survey from the Japan Management Association.* Other issues such as increasing sales/market share, or introducing new products and services or reviewing the business portfolio are declining by comparison.
Nikkei Business looks at various ways that Japanese companies are dealing with this, including my old employer Mitsubishi Corporation. Their approach does not seem to be that different from 20 or 30 years ago, which is to treat everyone (at least, those hired in Japan) as if they have leadership potential and offer them opportunities accordingly.
Impact of the Ice Age
The concern of companies (over 75% of respondents to a Ministry of Economy Trade and Industry survey in 2017) is particularly around having sufficient leadership and management resources within the next five years. This is not surprising as the cohort that would be entering into senior management are the group that were most affected by the Ice Age of recruitment, when companies drastically cut back their graduate recruitment in the 1990s to 2000s.
New recruits don’t want to be leaders or specialists
But part three of the Nikkei Business special indicates that the roots of this lack of leadership might be in a mismatch between the expectations of the younger generations and their managers too. New recruits are showing less interest in becoming President than in 1999, more interest in senior roles such as board director or General Manager, but interestingly, less interested in become a specialist.
Generational mismatch, again
The qualities of an ideal leader vary between generations too. In 1999 41.3% chose “someone who listens to the views and wishes of their subordinates” as an ideal quality, but this was chosen by only 26.8% in 2019. “Someone who gives directions politely” was the top choice (44.5%) of the 2019 new graduate recruits, but this was chosen by only 32% of new graduate recruits 20 years previously. The 1999 intake were significantly more keen on leaders who were passionate about their work than the 2019 intake, whereas the 2019 intake valued a leader who places importance on private lives, not only work.
Nikkei Business concludes that the type of leader needed has changed over the decades:
- 1990s – after the economic bubble burst, strong leaders were needed, who were more top down, able to solve problems using their skills and experience. If you tried hard, you succeeded
- 2000s – with the spread of information technology it became important to gather in information from the gemba – where the work was happening
- 2010s onwards – employees place importance on diversity. Globalization and digitalization gain pace – the leader’s skills and experience aren’t always relevant. Effort does not always bring results
*Japan Management Association seems to have given up putting anything new in English on its website since 2017.
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