Management tips for Japan
It is an honour to be associated with EURObiZ Japan, the magazine of the European Business Council. The EBC has a clear agenda relating to trade and regulations for improving the EU-Japan partnership. For my part, I will focus on the day-to-day experiences of foreign executives in Japan. Alongside that, I will be discussing macro-economic and political trends, and assessing how they impact the operational side of foreign businesses in Japan.
You may be wondering about my qualifications for this job. Well, my job as director of the Economist Corporate Network involves meeting a great number of executives working at foreign firms, while economics and politics is the backbone of The Economist newspapers and its research arm, the Economist Intelligence Unit (EIU). That is a superb platform from which to relate macro-economic issues to firm-level issues.
One thing is for sure: executives arriving in Japan in 2010 will need to hit the ground running, and exploit their business and social skills to the utmost. With the economy contracting at 6% in 2009, Japan is more challenging right now than any other market in Asia. Even senior Japan hands are being replaced; sometimes with a nod to localization (this sometimes seems to be a substitute for the hard thinking you need to re-craft your strategy). Not surprisingly, in my discussions with my members – especially the new arrivals – I frequently come across the need for operational advice. There is a real sense of urgency amongst executives in terms of getting actionable tips, especially on HR issues.
The other recurrent theme is managing the relationship with the firm’s head office. When the global CEO comes through Tokyo, it can be difficult to explain to him that the splendid buildings of Roppongi Hills, Tokyo Midtown and Akasaka are not easy to translate into surging revenue. Yet despite the CEO’s disappointment, this is just the time you need a rock-solid ally: internal company politics are notoriously complex in Japan. One country CEO told me jokingly that the key to success in Japan is choosing who will be supervising you back in Europe. Another solution – admittedly not easy to achieve – to ensure that you have the necessary authority to push through your Japan strategy is to be a member of the board back home.
There are, nevertheless, plenty of reasons to believe the well-prepared executive can succeed in Japan. Managers and consultants I have spoken to are confident that agriculture worldwide is set for a revival, and that Japanese agriculture will build on its traditional expertise to become a profitable industry. The recession means that the internet is strengthening its grip on people’s shopping habits, and companies which can provide the right combination of product and price will thrive. A major European manufacturer of running shoes has done extremely well with the launch of a special type of exercise shoe aimed at women. The provider of sophisticated dioxin-detection machines (which test for environmental poisons) also reports booming sales in Japan and other countries in Asia.
It is the lessons of these various ventures that I will be presenting to you, the reader. Foreign businesses have a huge amount to offer, and to learn from, Japan. By blending the best parts of their collective experiences, we can push forward the whole EU-Japan project.
danslater@economist.com
www.corporatenetwork.com