Japanese companies are more entrepreneurial than you might think
What’s in a name? A lot, apparently. At a recent Economist Corporate Network event discussing “entrepreneurialism” it rapidly became clear that nobody quite knew what the word meant. This was all the more surprising with someone as experienced as the number two of Softbank Mobile discussing the concept, as well as the chairman of Qualcomm, not to mention William Saito, a top internet entrepreneur with experience in Japan and the US.
The confusion emerged as the topic of “keeping a foreign company entrepreneurial in Japan” was being debated. Naturally, much of the attention was on Softbank’s founder, Masayoshi Son, as well as Qualcomm’s founder, Irwin Jacobs. We heard some excellent, close-up anecdotes about Son’s management style: the life-plan he drew up at the age of 18; the result of his first inspirational speech to his workforce (they both walked out), and his ability to take terrifying amounts of risk without blinking (the $20bn acquisition of Vodafone Japan in 2006).
However, Victoria Bolam, the CEO of Kepner-Tregoe Japan, pointed out that the content of the speeches did not match the expectations raised by the title. Most foreign companies want to learn from the experience of Softbank in pushing innovation and financial success – but there are not many Sons to hire for their companies. In effect, the question becomes: how can you adopt some of the virtues of entrepreneurialism without some superman like Bill Gates, Steve Jobs and Masayoshi Son to force them through?
Indeed, it’s clear that the common perception of entrepreneurialism is quite flawed: we think of it as rather collegial and cuddly, perhaps a bit like the Beatles – a bunch of friends meeting while they are quite young and stumbling onto something which changes the world through their passion.
But while that might be the first state of entrepreneurialism, it rarely lasts. If that first creative idea is to blossom, it quickly has to come under the control of a master businessman. With the Beatles, it was their manager Brian Epstein and the singer/songwriter Paul McCartney. At Microsoft, Bill Gates took uncontested control, as did Steve Jobs (eventually) at Apple.
So successful entrepreneurialism (monetising the original idea) is quite different to early-stage entrepreneurialism. While it’s often considered “good” (or at least fashionable), one has to question whether early-stage entrepreneurialism is in fact desirable in a large company.
Should you allow people free rein to work “creatively”? Does anybody even understand the creative process sufficiently to create the right environment? Are you really willing to undermine hierarchy, and allow people who are junior and unqualified to speak with an authority equal to recognised experts? In all likelihood, again, you are not. Whatever they say to the contrary in their recruiting and marketing brochures, Western companies of a certain maturity agree that formal systems and channels are essential.
Superiors are gods
And here is the other contradiction: while even Silicon Valley companies end up being run along generic, Harvard Business School lines, Japanese companies are different. Ironically, while entrepreneurialism is not associated with Japanese companies, some of the qualities of early-stage entrepreneurialism are very much present even in mature, large Japanese companies.
Thus, while Western firms often control the firm in a top-down way, in Japanese companies, things are more bottom-up. Lower and middle managers need to be consulted, and a consensus needs to be built up before any action is taken. This concept undermines the common view that Japanese companies are very hierarchical and strict. It is certainly confusing. Western companies (with the possible exception of Scandinavian companies) preach openness and collaboration, but are very hierarchical in practice. Japanese companies treat their superiors like gods – but these superiors tend to listen far more closely to their subordinates than their Western counterparts.
Another intriguing point: Japanese technology is very creative, but often insufficiently monetised. That leads me to think that entrepreneurialism without money is actually craftsmanship, or art: done for its own sake. And money without art or craft, is speculation. You could conclude that entrepreneurialism strives to combine the two: to create something, as well as to make it lucrative.
Does that conclusion help in managing Japanese employees at a foreign company? Yes, but the answer may be quite unexpected: be more Japanese in your management style, while keeping the Western focus on monetisation.