mitsubishi corporation

Japanese companies need to pull up younger burdock roots if they really want to grow globally

Along with “tako tsubo” (octopus pot), another Japanese concept “gobou nuki” (plucking out burdock roots) used in HR has been deemed harmful to corporate Japan’s global prospects.

The term has been used frequently in the Japanese media recently, according to Masahiro Kotosaka, an ex McKinsey consultant now at Ritsumeikan University. In a recent article in Nikkei Business Online he points out that the recent appointments as President of Takuya Hirano at Microsoft Japan, Tatsuo Yasunaga at Mitsui & Co, Koji Arima at Denso, Tatsuya Tanaka at Fujitsu and Takahiro Hachigo at Honda have all been described as plucking burdock roots, as they are in their 40s or 50s, younger than normal for Presidents in corporate Japan. The average age of Japanese Presidents was 62 in 2014 (up from 61 in 2013), around 10 years higher than the global average.

The older age is of course partly explained by the continuation of seniority based pay and promotion in Japan – although Panasonic, Sony and Hitachi have all recently announced they are abolishing or looking to abolish this system.

The average age in Japan for a “kacho” (section head, the first managerial position in Japanese companies) is 38.6 and 44 for a “bucho” (department head, or General Manager) according to Recruitworks. In India, China or Thailand, the average is 9 years lower for kacho and 10 years lower for bucho. Even the US average is 5 years lower for both positions.

Kotosaka asserts that Japanese companies need to start pulling out younger burdock roots, people who might be future executives, and making sure they have early leadership experience. If this does not happen, the younger generations of Japanese will soon feel a big gap with their overseas peers.

Already Kotosaka has heard (as I have) from Japanese companies that they feel the utilisation of non-Japanese or external executives has increased and the presence of Japanese executives has faded.

The most notable example is of course Christophe Weber, President of Takeda Pharma, and his team of 16 executives, of whom 8 are non-Japanese and have come from outside the company and two are non-Japanese who joined through being executives in a Takeda acquisition. Weber had his first leadership experience at the age of 29 when he became a country manager at GSK. Carlos Ghosn of Nissan also became head of a factory at the age of 27.

My former employer Mitsubishi Corporation is mentioned as an honourable exception to the lack of experience given to juniors, along with gaishi (foreign owned) consulting companies and private equity firms. For such companies, people are the main asset, and it’s true I suppose that trading companies such as Mitsubishi that have now moved more towards acquisitions rather than trading, do afford ample opportunity for younger Japanese to take up management positions abroad. In practice though, I have seen many instances where the acquisition is left to manage itself, and the Japanese expat director mostly stays in the regional headquarters, processing paperwork to send back to Japan HQ, rather than hands on managing the business.

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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)

Japan’s M&A boom – a way of forcing globalization?

I was reading the last chapter of a book (The 1990s and beyond (pdf)) I wrote which was published in 2000 about the history of Mitsubishi Corporation in London, and was reminded that I had come up with a concept of “forced globalization” to describe what Japanese companies might need to do to truly globalize, based on their experiences up to the 1990s. Much of what I said still holds true, but what I had not anticipated was the surge in cross border acquisitions by Japanese companies as another route into globalization these past ten years.

My view then was that Japanese companies will not “naturally” globalize, in a business-led pursuit of profitable growth, because of the “representing Japan” mindset of companies such as Mitsubishi Corporation, and the fact that so much knowledge creation and business creation is in Japanese and the Japanese staff feel most comfortable with keeping it that way.

I proposed that human resource-led “forced” globalization – starting with globalizing the management, might be the only way to break the mould.The graphic I produced to illustrate this is not in the pdf, so I have reproduced it here:

“Natural” globalization:

“Forced” globalization:

I was imagining Japanese companies would continue doing what we attempted at Mitsubishi Corporation in the 1990s, which was to hire and develop more non-Japanese people, in the hope that they would then create more global business. This strategy still continues for many Japanese companies, but as I predicted, takes time, and often the non-Japanese employees quit before it bears fruit, through frustration.

Acquiring an overseas company is an instant way to globalize the business, and in theory should instantly globalize the management. But as described in previous posts, often the overseas managers are kept at an arm’s length.

The bottom line from all of this, which has not changed at all in the past decades, is that Japanese companies will only do what the Japanese employees of that company see the need to do. The majority of Japanese employees are not likely to want to become global themselves – it is too far out of their comfort zone. Nor do they want to bring non-Japanese into their circles as this would be a threat to their own careers and status in the company. Nor do they want to be actively involved in the management of the overseas subsidiaries – the risks of being associated with any failure are too great.

The constructive message of this, however, is it is therefore up to the employees and management of the acquired company to take the initiative and ask to integrate with the Japan parent – just as the Brazilian employees and managers at Schincariol asked Kirin to change the company name to Brazil Kirin. Japanese executives are familiar and happy with complying with requests that come from “bottom up” and represent the consensus views of a group of employees.

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.

Last updated by Pernille Rudlin at 2022-12-09.

Tag: mitsubishi corporation

Japanese companies need to pull up younger burdock roots if they really want to grow globally

Overseas experience and Japan’s elite, past and present

Japan’s M&A boom – a way of forcing globalization?

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