Judging by an interview last year (Nikkei Business – in Japanese) with Terumo’s Chairman Koji Nakao, Nakao’s attitude is one of the reasons Terumo has been more successful than most Japanese companies in managing its overseas acquisitions (as previously blogged). 50% of Terumo’s sales and 40% of its production are overseas, with about 75% of its employees being non-Japanese.
Nakao states that since 2012 he has been trying to change the behaviours of his senior executives, encouraging them to take the initiative to have conversations with their subordinates and also undergo 360 degree appraisals (past participants of our Japan Intercultural Consulting seminars will be amused to know that one of the feedback items Nakao got from his 360 degree appraisals was that he had a habit of closing his eyes in meetings which made him look like he was asleep). “I want to change the culture of the company to a more “free and easy” one, where many discussions take place… the changes have to come from the top, including myself”.
He lived for some time in the USA, where he was known as Koji, and got used to being able to discuss freely with his employees, and have them challenge his ideas. “Yet when I returned to Japan, I was addressed as “Chairman””. He believes this strong hierarchical sensitivity in Japan in some senses makes life easier. If there is a gap in seniority amongst meeting participants, then tough discussions and conflict can be avoided, as noone wants to contradict their seniors.
“But if this goes too far, you end up doing things, not for the company, but for the boss….It also has the result that Japanese are not as convincing as Westerners in negotiations, because they are not used to having to convince their bosses.”
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