In my nearly two decades of working in Japan, I have witnessed numerous success stories of international businesses doing well in Japan. At the same time, I have also encountered many organizations that struggled to fit in with the local culture and challenging market demands.
Earlier this year, during my presentation to students of the Waseda-Nanyang Double MBA Program at the Waseda University Business School in Japan, I shared on some key points that business people and organizations need to be aware of in order to succeed in Japan. Here are some of them.
It is commonly known that most Japanese tend to be wary of foreign companies and business operators. As such, it is important to be able to establish a clear communication channel with the locals. To achieve this and to build trust, being able to understand and converse in the Japanese language is essential in managing the business and the human resources involved.
Effective communication also includes being able to grasp non-verbal cues. Nuances, gestures and non-verbal actions are used heavily by Japanese to reflect the context of what they are saying rather than the literal meaning of the words they use to say it.
As a foreigner, while it is important to respect the local culture and the people of your host country, it is also necessary to convey the strong points of your company’s homeland. Bear in mind that local personnel is also keen to find out more about your home country’s culture, people and market environment.
On the other hand, you must also be genuine in representing the Japanese interests towards the company’s head office. This is as crucial as your role in protecting the home country’s interests. If it’s a one-way-street only, you will not have the backing of your local personnel. This two-way exchange of information and sharing is indeed a catalyst for forging better communication between both sides.
Japanese are renowned for taking great pride in their work and they pay attention to every detail of undertaking a task. As they are always in pursuit of mastering their profession, often termed as shokunin, it is important to constantly provide feedback on how they can improve.
But instead of merely pointing out or verbally talking about it, it is best to allow them hands-on experience to work on those improvements. Know that for the locals, the process of being perfect in their job is just as important as the outcome of the task.
The infamous bursting of Japan’s bubble economy in the early 1990s is widely known globally. Following a decade of market stagnation that not only was hurting the nation’s economy but was also a painful experience for its workers.
As such, it is important for business owners and managers to motivate local employees and forge strong working relationships with them. Do not think that Japan is entirely different; like the rest of the world’s workers, people’s needs are basically the same.
To make the locals feel like they are part of the organization, you need to be clear on their career advancement opportunities and the impact they have on the organization. It is also important to empower them with the right level of decision-making and assign immediate superiors who are able to help staff achieve their goals.
Japanese employees generally lean towards a group mentality and often look to their superiors for approval before making big decisions. Traditionally, superiors are kept informed of everything; every decision, no matter how small must go through the defined chain of command and get the necessary approvals.
While Japanese workers are highly responsible when it comes to wastage reduction, cost control and other aspects of business management, they generally have a lower sense of entrepreneurship as compared to their Western counterparts. This is something a Western company may be able to help improve upon.
Start by making Japanese employees responsible for their own projects with decision making and accountability resting on their shoulders. Give them the authority and opportunity to tackle work problems head-on and solve the problems creatively.
Japan, like the rest of Asia, is a unique market on its own. While it has an ultra-modern infrastructure and boasts many technological facilities, it is also driven by a very specific market and consumer needs.
As a multinational corporation or a foreign business, while you have vast financial resources, sophisticated systems and well-established delivery and operating practices, you must accept that you are not a local resident. Trust your local partners and Japanese colleagues on their market knowledge as they likely have more information on the constantly evolving consumer trends and are more aware of local consumers’ likes and dislikes.
Armed with a deeper understanding of the local culture and a better appreciation for local flavors and tastes, you should be flexible enough to offer products and services to meet the preferences of the local market.
An option for businesses planning to set up offices in Japan is to work with an experienced partner who is well established and familiar with the local market. Among them is DKSH, who have been operating in Japan since 1865 and are able to provide services like sourcing, market analysis, marketing and sales, distribution and logistics as well as after-sales services.
Contact me below with your thoughts on what has worked for you while operating an international organization in Japan.
Michael Loefflad is President & Representative Director of DKSH Japan since October 2017. He has more than 18 years of experience working in Japan. In addition to his proven track record in leading and managing businesses in Japan, he is fluent in Japanese. He was born in Munich in 1966 and studied law at the University of Munich.