Wednesday, October 21, 2009

The Japanese Business Mindset: Enigmatic but Efficient and Effective



The prolonged recession of over a decade cast a deep shadow on the Japanese economy.  The emergence of nimble corporations from countries such as Korea and Taiwan has posed new threats to Japan.  Yet, Japan continues to lead the world in industrial innovation and business leadership.  Despite the four-fold adverse movement in Yen-Dollar parity over three decades, Japan continues to retain a global market share for its products.  Despite not following the Western management concepts, Japan continues to be effective in global competition.  Japan amazingly defies the aging characteristics of a mature economy and continues to be youthful and vigorous in terms of technological and business leadership.

Japan’s unprecedented industrial success is often traced to the culture, homogeneity, discipline and hard working nature of the Japanese society. The inscrutability of the typical Japanese businessmen and the invisibility of the Japanese industrial system are often cited as barriers to competitors trying to replicate the Japanese success. 

The Japanese enigma, however, cannot be explained by a simple cultural or behavior paradigm.  The Japanese performance model is a national phenomenon that transcends industrial or business classification. It has its roots in a thoughtfully seeded and carefully nurtured mindset that seeks perfection and practicality in all the activities.  This paper distills the over three decade experience of the author with reputed Japanese corporations and distinguished Japanese professionals to analyse the Japanese mind-set in terms of five essentials of (i) design mindset, (ii) manufacturing mindset, (iii) marketing mindset, (iv) collaboration mindset and (v) individual mindset.  All of these reflect a simple but exacting, and uniquely Japanese, philosophy of fusing quality with elegance in whatever is done under the brand of Japan.

(i)  Design mindset

Product design is the key driver for the success of any industrial operation.  The Japanese design philosophy can be viewed in terms of five key facets which reinforce each other mutually and result in a product that is differentiated for performance, quality, reliability, usability and elegance, providing a total product life cycle experience for the users.  These five aspects are reviewed below. 

Incremental innovation-pioneering inventiveness

Japan has been a leader in Kaizen that embodies the concept of continuous improvement.  The Japanese believe that a product platform has to be basically robust but intrinsically adaptable for continuous enhancement.  The Japanese design philosophy emphasizes incremental improvements as a cost-effective yet value building route to enhance product life cycle.  The Japanese also believe that quality can be enhanced and costs reduced simultaneously.  Typically, a product design is characterized by several basic performance characteristics which when individually leveraged provide successive phrases of product enhancement.

Alongside incremental innovation, Japan has been a pioneer in breakthrough design concepts which help create whole new markets.   From the time Japan pioneered the design of robots to replace manual operations (for example, robots for welding) to the more recent development of the world’s first commercially viable humanoid robot(for example, Honda’s Asimo robot) or Toyota’s hybrid car (Prius), the country has demonstrated an uncanny capability to leapfrog ahead of the technology development curve.  If the rest of the world is focused on integrating cameras with cellular phones, Japan would be ahead integrating camcorders with cellular phones.  If the world is focusing on moving from LCD technology to LED technology, Japan is focusing on moving imaging from 2D to 3D. Except for one or two slips (for example, flat panel technology a few years ago), the Japanese industry has been a step ahead of the rest of the countries in terms of breakthrough inventions that could be commercialized.

The ability to simultaneously follow the twin strategies of incremental innovation and pioneering inventions helps the Japanese companies expand and diversify the market segments on one hand and create totally new markets on the other.  It also helps the Japanese industry to straddle multiple price points and value points with effective product-market segmentation.

Lighter in weight but higher in strength

The success of the Japanese design philosophy is rooted in its reversal of historic engineering principles.  Even as the Western designers tried to equate higher weight with higher strength, Japanese designers consciously strove to explore light weight designs as a means of saving materials and costs while enhancing performance.  A study of various automobile designs of the world would reveal that for comparable specifications and performance, the Japanese products are at least 10% to 20% lighter.  The feature of lower tare weight directly translates into the benefits of lower manufacturing costs, higher operational productivity and better life cycle economics.

Clearly, use of newer material and component technologies and a perceptive understanding of the likely usage conditions drives the low weight-high strength philosophy.  Customization of designs to different countries and user conditions also helps the Japanese designers optimize their product characteristics with relevant design parameters. The cost impact of product weight is well appreciated by the Japanese companies.  When hit by recession, all Japanese automobile makers targeted to take off a certain percentage in the weight of the automobiles to enable meaningful cost savings.  That such weight and cost savings could be achieved with concomitant increases in strength is a reflection of the Japanese design ingenuity.

Smaller in size but greater in functionality

The Japanese design philosophy emphasizes miniaturization far more extensively than is attempted anywhere else.  Miniaturization is both an art and science.  The constraints of space that govern life in Japan could have, over generations, established a mindset which aims at space optimization.  Yet, transfer of such space-efficient approach into an organized industrial design mindset requires fusion of engineering and art.

The Japanese highway system is the most visible icon of the Japanese designers’ skill in optimizing space.  All the elevated highways are of single centre pillar design and enable free and full flow of traffic both on the ground and elevated tracks.  Industrial products with multi-functionality convergence represent a contemporary and amazing wave of new product innovations that combine smaller form factor with more ubiquitous functional performance.

Co-design with suppliers

The Japanese design philosophy is a comprehensive, end-to-end system that integrates material and component design with the end-product design.  Typically, each new product creation or new product upgrade commences with the end-product designers unveiling the total design concept to the suppliers and vendors and encouraging them to come up with their suggestions.  This collaborative process creates new products with seamless integration of multiple technologies.

In several cases, new product developments are led by the suppliers and vendors.  Globally, we have a few examples like chip manufacturers (such as Intel) constantly driving up the processing capability of devices.  This capability, however, is so diversified and deep rooted in Japan that usually every supplier or vendor has the capability to take its material or component technologies to newer levels and thus initiate fundamental changes in the end-product itself.

Product elegance for user delight

Japanese society is known for its harmony with nature.  A green, flowery ambience permeates the general landscape.  The innate sense of aesthetics prompts Japanese designers to combine product elegance with user friendliness.  Whether it is a simple product such as an instant tea sachet or a complex product such as a camera, the ability to reach higher levels of product elegance and user delight is a characteristically Japanese feature.

The Japanese design philosophy combining aesthetics with ease is an affirmation that in contemporary design style has, in fact, technological substance (see the author’s blog “Style is Substance: Management of Product Design and Manufacture” in cbrao2008.blogspot.com).  For example, a sachet which tears off in the right manner with the right effort requires a wrapper of special quality and crimping with exacting tolerance.  The approach of using technology for elegance extends to a range of products that cover industrial and domestic applications.

(ii)  Manufacturing Mindset

While innovative product design is the driver of the unique Japanese mindset, manufacturing creativity is a core facet of the Japanese industrial ingenuity.  Japan’s unique manufacturing mindset is revealed in several distinctive approaches as below.

Simplification with standardization

Manufacturing philosophy in Japan emphasizes modular manufacture with simple, standard equipment.  Japan has been a pioneer in development of flexible manufacturing systems and transfer presses.  Japan has also been a leader in quick die change systems.  Complete balancing of a production line from start to finish with careful definition of tact time is an essential feature of work flow design in Japan covering the main assembly lines, as well as the supportive sub-assembly and machining lines.  The concept of quick die and tool change is based on perfect matching of multiple sets of tools and dies to basic equipment beds.  Together such concepts ensure that a vast shop floor operates in perfect synchronization.

Unitized manufacture is yet another hallmark of the Japanese manufacturing system.  Amazing flexibility is achieved by understanding the essential core of any seemingly complex manufacturing operation and then designing operations (whether machining, casting, forming or assembling) around the core unitized operations.  For example, in the manufacture of an automobile engine, capability to handle the machining of one cylinder bore is all that is required to develop a flexible, unitized machining system that can handle a wide variety of automobile engines, from single bore to multiple bore configurations. Uniquely Japanese innovations in tool and die design and the mounting arrangements can make it possible for standard machines to undertake non-standard, variable operations, Competencies in manufacturing tools and dies of different designs is yet another capability that adds flexibility to the manufacturing system.  The quality of a manufactured product is  related to the accuracy and the detail that is ingrained in a typical tool or die.

Digitized upgrade

It is one of the enigmas of the Japanese manufacturing mindset that some of the most gleaming and tight-tolerance products are produced out of even old and seemingly obsolete machinery.  While modern Japanese plants have mirror finishes and complete automation, aged plants are also well utilized to produce contemporaneously acceptable products.

Digitization of the older equipment is extensively used by the Japanese to enhance process integrity and achieve tight manufacturing tolerances that are comparable to the ones that can be achieved by newer machinery.  Mechatronics and robotics represent the powerful face of digitization in Japan.  Even transportation and storage are highly automated using digital technologies.  Japan being the home to the electronics industry it is not surprising that digital upgrade is extensively used in the Japanese manufacturing system.

Predictive variability

Japanese understand that controlling the variability is the key to manufacturing perfection.  Control of variability is achieved in two ways.  The first is by total transparency and connectivity of information across the entire manufacturing value chain.  Japanese resort to visual communication of process flows, material flows, product machining and assembly characteristics to ensure that all participants in the manufacturing system are harmonized with a clear understanding of the requirements.

The second way of achieving predictive variability is through a resort to real time, continuous statistical process control (SPC) systems and periodic process capability studies, supported by a systematic maintenance approach.  The SPC charts not only enable strict control of quality but also provide early warning signs of any creeping process variability, enabling proactive corrective actions.  Japanese have indeed been pioneers in the use of statistics in the fields of quality control and quality assurance.

Just-in-time inventory system

The famed Kanban, Just-in-time (JIT) inventory system of the Japanese needs no introduction.  JIT is integrated from the very foundations of building a manufacturing system by eliminating spaces for inventory.  The geographical limitation of space in the country which acts as a constraint and the collaborative expansion of supply chain that includes component and material suppliers are harmoniously used by the Japanese to eliminate idle inventories.  The Japanese are clear that inventories lead to inefficiency in the manufacturing system.  If a breakdown or slippage occurs in any part of the manufacturing line, the line as a whole is stopped instead of allowing stage-wise inventories to be built up.

Adoption of pull-type manufacturing planning helps the Japanese plan production to match demand.  The pull-type system enables synchronizing of the material system and manufacturing system to the sales system through a fine-tuned logistics system.  Just-in-time inventory system synergizes with the pull-type manufacturing system as the whole system operates in a perspective of demand certainty.  The Japanese philosophy of pursuing profitability rather than chasing market share also harmonizes with the pull-type manufacturing and Just-in-time inventory systems.  Together, the continuous flow and the pull-type planning ensure that the Japanese manufacturing system operates with the lowest inventories and highest efficiencies.

5Ss, 3Ms and PY/RC approaches

The Japanese manufacturing philosophy is rooted in designing efficiency and effectiveness into the workplace.  Lean manufacturing is a way of life in Japan.  It is exemplified by the 5S and 3M concepts.  The system of 5S helps in efficient workplace organization for high productivity.  Seiri (sorting), Seiton (set in order), Seiso (cleanliness), Seiketsu (standardization) and Shitsuke (sustaining) go far beyond housekeeping to ensure workplace efficiency and safety.

The 3M concept is focused on eliminating waste in the manufacturing place.  Toyota Motor Corporation, as part of its famous Toyota Production System, defined three broad types of waste:  Muda (non-value adding work), Muri (unreasonable work) and Mura (fluctuating work). By eliminating these three broad categories of waste, the Japanese manufacturing system benefits from enhanced productivity.  These concepts are strengthened by the poka-yoke principles of fool-proofing facility design.  In the unlikely event of errors occurring, the Japanese adopt root cause analysis (with fishbone diagrams, why charts and FMEA analysis) to identify the fundamental causes of errors rather than stop at correcting the symptoms.  This process is also carried out straight at the source of the problem (Genchi Genbutsu) rather than in offices.

(iii)  Marketing mindset

Japanese marketing mindset is quite differentiated from that of other countries.  While the Japanese companies utilize the essential elements of sales and marketing as any other company, be it in terms of market research, customer segmentation, brand promotion, point of sale service and after-sales service, the Japanese marketing mindset is notable for five differentiated characteristics.

Quality as price builder

Japanese corporations aim at what they perceive as an optimal mix of market share and profitability.  The marketing mindset emphasizes the Japanese brand of functionality and quality as an enabler for seeking price premium.  Whether due to the intrinsic cost premium of superior design and superior build, the external impact of adverse Yen-exchange rate (Yen 90 to a dollar in 2009, compared to Yen 360 to a dollar in 1974!) or the deliberate premium sought for the Japanese brand, Japanese corporations price themselves at least 10 to 20% higher than comparable Korean or Taiwanese brands.  The Japanese believe that pursuit of excessive market share has an adverse profitability impact.

The fundamental premise of Japanese marketing is that higher quality provides better product feel and longer usage besides ensuring lower after sales costs.  In addition, the strong association of Japanese brand image with robust quality helps to position the users in the society as a class appreciative of a superior brand.  Whether Japanese would have achieved market dominance in each and every product segment had they pursued a strategy of price parity (if not price competitiveness) vis-à-vis their competitors is a debatable point.  As an overall system, however, long term stability and profitability of the system are perhaps better balanced with the Japanese conservative price and market policies.

Brand segmentation for market segmentation

Products with multiple functionalities are the new driving force of market segmentation.  The Japanese industrial system focuses on creativity of product design as a driver of market segmentation. In respect of a cellular phone, for example, combinations of mega pixels, optical zoom, picture capture capability, connectivity options, multi-media flexibility, battery life, display screen size are creatively combined to develop multiple product-market segments leveraging contemporaneous technologies. Gaming console companies have created new brand statements based on innovative functionalities of real time activities.

Japanese, in addition, have perfected the art of using brand segmentation as a tool for market segmentation.  Sony Ericsson’s Walkman and Cybershot branding of music and camera oriented mobile phones, respectively, is an example.  Similarly, development of concepts such as an urban off-road utility vehicle  or small family small car has been uniquely Japanese. Creation of unique brands such as Lexus and Infinity s has helped the Japanese automobile giants Toyota and Nissan make green-field positioning statements against established luxury marquees such as Mercedes and BMW.

Packaging as differentiator

Japanese retail stores have a knack of using packaging for providing customers with enhanced shopping experience.  From the smallest piece of purchase to the priciest piece of acquisition, packaging gets an integral and elegant treatment from the Japanese retail stores.  As a result product functionality, whether the product is a perishable item or long term usage item, gets preserved till the time of commissioning, and is further protected in subsequent phases of transportation.

Japanese provide an emphasis on packaging that is equal to that laid on design and manufacture.  Packaging itself has three layers; the first being the primary packaging that occurs with product delivery at the manufacturer’s end.  This ensures a perfect fit of the product and all its accessories in a creative packaging unit.  The second is the secondary package that distributes the product to different parts of the globe without any untoward mishandling or breakage.  The third, and most important, is the way the product is unpacked and repacked at retail end while providing factory-fresh delivery to the customer.  In the Japanese system, the packaging value chain is total, robust, elegant and user- friendly.  Packaging design is a fundamental part of product design in Japanese hands.

Global customization

The global success of the Japanese brands is due to a marketing mindset that is adaptive to different user requirements and usage conditions in different parts of the globe.  The phenomenal success of the Japanese automobiles across the globe is linked to the companies’ ability to identify the core characteristics of consumer demand in each country.  In the case of an automobile, for example, these are fuel efficiency, ground clearance and turning circle as far as India is concerned.  Automobile design for USA, on the other hand, emphasizes power, robustness and interior trim.  Design for Europe is focused on styling, external trim and internal trim.

Japanese companies believe that products have to be developed, manufactured and positioned in the host country markets in alignment with core country characteristics.  As a result, portability of brands across the regions is relatively limited, compared to that on offer by the Korean, US or European competitors.  Japanese cellular phone markers for example, have developed designs with user feel essentially aimed at the Japanese users as a result of which some great phone designs are yet to move beyond the Japanese shores.  This certainly is a disappointing result of the Japanese marketing conservatism.

That said, global production has been taken up aggressively by the Japanese companies in select fields to integrate their design, manufacturing and marketing philosophies with local needs.  The ability of Japan to withstand the volatility of global current markets and economic conditions is related to development of multiple manufacturing bases across the world.  Japan has thus been proactive in letting technology and operations lead the way on the marketing path.

‘Hared’ tortoise

Japanese marketing mindset is highly deliberative and rarely opportunistic.  With increased competition from other developed nations, especially the Asian Tigers such as Korea, Taiwan and China, the Japanese marketing philosophy of hastening slowly has perhaps inhibited the Japanese companies from achieving a market penetration that is proportionate to their technological superiority.  For example, though the Japanese have been first off the block in terms of light emitting diode technologies, it is the Koreans that have introduced the first products into the markets.  The hesitation of the Japanese to translate the technologies pioneered in the laboratories and shop floors as first mover products into the market place is surprising on the face of it.

The Japanese marketing philosophy may remind one of hare and tortoise.  The Japanese corporations deliberately play the tortoise in the marketplace despite developing superior or comparable technologies ahead of competitors.  Presumably they use the time to read the customer needs in a more thorough manner and also let the faster, first mover competitors open up the markets for the superior but costlier Japanese products.  It is instructive that despite the history of continuous follow-on introductions, the Japanese remain market leaders in terms of customer appreciation and brand recall.  Their brand resilience and technological virtuosity perhaps would make the Japanese proverbial tortoise in the global marketing race.

(iv)  Collaborative mindset

In today’s globalised conditions, collaborations and alliances are the essential components of globalization.  Japanese companies are a major focal point of the wave of alliances and collaborations.  This is only natural, given the needs of other countries for the Japanese technological resources on one hand and the Japanese need for global markets and cost-effective material and component supplies on the other.  Yet, the Japanese mindset on collaborations and alliances is quite unique and hesitant.  The collaborative mindset of the Japanese is expressed in five key different ways.

Cautious consideration

The typical Japanese approach to collaboration is marked by cautious consideration.  Unlike the Western counterparts, the Japanese are neither hurried nor opportunistic in trying to sew up collaborations despite the existence of market or partner opportunities.  Perhaps a perception of being adequate as a nation in revenues and profits leads to a rather smug Japanese view towards collaborations.  More importantly, the Japanese commitment to the long term and the preference to make only the winning moves influences the typical Japanese corporation to consider a host of factors prior to even deciding to start the process.

Also, the Japanese mindset is typically concerned about governmental and environmental factors that could promote or inhibit a free play. The Japanese appear reluctant to manage a restrictive bureaucratic regimen.  The flexibility and cost-competitiveness of the country as a sourcing base of the market rather than the scale of the market seem to dictate the Japanese decision to take up any market for evaluation.

Diligent evaluation

Even after the Japanese decide that a particular host country’s industrial and economic environment is aligned to their interests rarely does a Japanese corporation move into a market without extensive due diligence.  Whether the move is in the form of an investment in advanced countries such as US and Europe or a collaboration in emerging markets such as India or China, complete feasibility studies are an essential part of the exploratory process.  Typically,  the Japanese prefer to conduct their due diligence processes in alliance with local partners. Such studies, however, provide no assurance that the Japanese company would eventually tie up with the diligence partner.

The system of Japanese diligence is so rigid and unique that new facts discovered in the process of diligence hardly motivate the Japanese to make course corrections.  The Japanese tend to stick to sequential phases of diligence even if early diligence points out the need to advance certain entry steps or re-jig product and manufacturing plans.  The Japanese also are typically unwilling to share their inner perspectives with the partners, thus losing the benefit of their local insight.  While the Japanese lay solid and robust foundations for their business moves with their detailed diligence, very often they pass up major market opportunities due to the inbuilt rigidities in the diligence processes.

Planning for perfect execution

Inevitably, planning by the Japanese corporations tends to be extremely detailed aiming for perfect execution.  Several departments are simultaneously roped in with shared vision, strategy and programs of collaboration. Detailed program management plans are drawn up with all micro level issues fully considered, prior to commencement of physical activities.

The success of the several Japanese ventures in rather divergently aligned business environments of different countries (China to India, or Europe to USA) could be traced to the detail and rigor they bring to the execution plans.  The success of the Japanese automobile ventures in India is certainly attributable to such diligent planning for effective execution.

Collaboration with commitment

A typical Japanese corporation is reluctant to enter into expansive or open-sky collaborations, which could provide unlimited access to their technologies or which could demand major commitments on the part of the Japanese partners to the markets.  Collaborations usually are highly product specific and focused on a few deliverables.  This approach is prompted by a desire to understand the potential for partnership success in phases and also take up only a scope that could be successful. That said, expansion of collaboration is a challenge, but not insurmountable as demonstrated by several case studies of Japanese collaborations in India

Once a collaboration is taken up, the Japanese partner could be expected to provide the needed inputs to make a success of the collaboration.  In execution, commitment remains focused on the collaboration rather than the broader company issues.  Japanese companies stay committed to their collaborations and alliances even if they encounter unanticipated surprises, as evidenced by Daiichi Sankyo-Ranbaxy alliance.  The same characteristic may not be held true of Western collaborations.  The Western companies could be opportunistic in entry into as well as exit from collaborations.

Respect for partner

An industrial enterprise needs continuous induction of resources for long term play.  Even if a local partnership starts off with a majority or 50:50 equity share eventually the local partner would need to dilute its equity to bring in resources which only the cash-rich Japanese collaborator can bring in.  The Western approach seeks to assume 100% ownership and management control at the earliest and nominate its own management structure. Japanese partners on the other hand tend to be extremely respectful for the local partners, regardless of the shareholding level the local partners are reduced to.

The respect for global partner is exemplified by the Japanese in many ways.  India’s Maruti-Suzuki and Kirloskar-Toyota reflect the respectful manner in which the Japanese treat the local sentiments, from retaining the Indian names on the company marquee to continued representation of the partners in key decision making structures regardless of the equity percentage.

(v) Individual mindset

The Japanese society is as much plural as it is singular in its behavior. Anyone walking into a Japanese shopping district or shopping mall will find the sales persons extremely chirpy with pleasant greetings (“simasens” and “arigatos”) all the time. A keenness on the part of the sales people to connect with the customer will be palpable. On the other hand, a Japanese business professional tends to be cautious and careful, virtually reflecting an unwillingness to commit in any manner.

The professional approach of the individual Japanese businessman or corporate professional is marked as much by politeness and friendliness as by reticence and hesitation. As a group, however, the Japanese are amazingly focused, cohesive, analytical and achievement-oriented. The transformation from the individual to the group has a unique alchemy at work. Far from any mystical group catalyst, it is the Japanese individual’s unique underlying mindset that drives the visible group performance.

Superior role of the institution

The fundamental governing principle, either of the Japanese society or the Japanese corporation, is that every individual subordinates himself or herself to the institution he or she represents. Whatever be the inner individual preferences and predilections the individual expresses only those points of view that reflect the institutional position. The individual takes pride as a representative of the institution that has corporate achievements than as a person with personal or professional skills.

The amalgamation of the individual personality with the institutional personality starts from the time a professional joins a Japanese organization as a trainee. The training programs provide a complete exposure to the company’s business, products and processes, inculcating proficiency and generating pride in the individuals (for example, the famous Toyota Way program of Toyota Motor Corporation for its new joiners). This coupled with the system of mentoring the newcomers with identified mentors (sensei) helps the newcomers develop a total identification with the institution and its work groups.
  
Creativity of standardization

Nothing is more striking in the Japanese corporate system than the strong streak of standardization that pans across all industries and corporations, be they be small, medium or large enterprises. From the way data is captured and tabulated to the way data is analyzed and presented, there is only one unique way for the Japanese that is common across Japan. The Japanese have a time tested way of summarizing tremendous amounts of information in terms of simple bullets, graphs, schematics and tables with high visual impact. The standardization of information management across the nation in Japan is creative, and contrasts sharply with the diversity and plurality of information management which is often encountered even within an organization in other countries.

Even more amazing, however, is the very unique and creative manner in which the Japanese professionals are trained to capture, analyze and deliver solutions using a ubiquitous A3 sheet of paper. The A3 sheet has typically 6 sections comprising background, current conditions, goals and targets, analysis, proposals and the execution plan.  Sequentially, problems are comprehensively analyzed and solutions perceptively found using the A3 sheet.  Readers who are interested to learn more of this are referred to “Toyota’s Secret: The A3 Report” in MIT Sloan Management Review, Summer 2009, Volume 50, No. 4.

Management for technology

The typical Japanese, even as he grows in career, stays with technology rather than opt for general management as is practiced in the West. Management systems in Japan have a strong operational and technological orientation. There is far less importance accorded to perceptions and claims and far greater emphasis laid on facts and figures in the typical Japanese presentations. Individuals absorb and present only the corporate view of the organization. They are trained to understand and articulate operations as a system rather than as individual activities. Even at the CEO level the focus in a typical Japanese corporation is more on technology and less on management. There is thus an ambience of individualized as well as collective technological quest in all Japanese organizations. The overwhelming emphasis on technology and operations at the individual level to the detriment of managerial faculties has its own pluses and minuses perhaps.

Acceptance for job rotation is high at individual level in the Japanese corporations. It is not untypical for R&D engineers to move into marketing and operations. It is also not untypical for legal people to do stints in assembly lines. Cross-movement of engineering talent to commercial domains and commercial professionals to quasi-technical domains is commonplace. Shared understanding of corporate issues develops as job rotation helps individuals enrich their core competencies with feedback loops from the markets and peer functions, and eventually become multi-skilled.

Small groups for big decisions

The Japanese organizational system is unique for the importance accorded to the middle tier (comprising managers, senior managers and general managers) in information analysis and decision making. The nuclear decision making groups are typically small, organized vertically within domains and horizontally across domains, providing ample space and scope for individuals to express, debate and conclude on their viewpoints. These nuclear groups are, however, networked across the organization forming a rather large discussion forum. The compact yet widespread organizational grouping helps in building the consensus system of decision making for which Japanese organizations are famous for.

With Japanese, formal meetings in office settings are a great method to share information and exchange viewpoints. However, formal meetings in Japan rarely serve the objective of generating a decision, contrary to the expectations in the West or other oriental counties. The Japanese believe that each meeting provides additional information which needs to be evaluated internally before any final decisions are communicated. Meetings, visits and interactions therefore end in polite handshakes rather than in collaborative hugs. It often takes several meetings before the decisions are crystallized and relationships solidified.

Velvet hands in iron gloves

The typical Japanese professional often gives the impression of being a very polite but somewhat impersonal partner. In the process of developing a collaborative arrangement as well as implementing it the Japanese operate behind a corporate veil that limits the amount of information that is provided. In fact, for a nation that prides itself for its technological depth and perfection, the information that is made available for partnerships is rather limited in a formal sense.

That said, it is more common in the Japanese scenario for professionals to develop deep and abiding relationships with their counterparts in the partner companies. Once a relation develops, the typical Japanese professional brings out all his experience and expertise to make the collaboration work smoothly and deliver effective results. On this dimension of establishing a lifelong relationship and rapport, Japanese professionals reflect an oriental culture of working from the heart. 


The Japanese business mindset in totality

The Japanese business mindset which has helped the nation achieve technological and industrial dominance globally is complex and unique with multiple facets that reinforce the total value chain. On one hand, a unique alchemy of high-end design, manufacturing and marketing deliver world-class products and services through a global network while on the other hand carefully titrated corporate and individual approaches towards business and professional collaborations somewhat limit the market dominance the Japanese companies could have enjoyed. For proponents of technological and operational virtuosity there is indeed a lot that can be learnt from the Japanese mindset.  It is enigmatic but hugely efficient and effective!



Posted by Dr CB Rao on October 21, 2009  


5 comments:

Narayanan said...

Really enjoyed reading this article, a compelling summary of the Japanese mindset with lessons for both personal and professional enrichment. Be it a tea ceremony or mouthwatering plate of sushi (my favorite!) or a high-tech gizmo, Japanese tend to perform all with equal panache. One aspect of the Japanese mindset that stands out is the ability to "ape" others, (sometimes in stealth) but with an improved result and one that exerts strong influence in the long run; all elements of a master strategist. It is said that one of the ministers in 19th century (Hotta Masayoshi, 1857) soon after its independence said something to the effect of ..."cementing foreign alliances, send ships to conduct trade, copy where they are the best, repair our shortcomings and gradually subject foreigners to our influence." A hared tortoise no doubt but with ambition and capability of being a Godzilla of any industry it chooses to dominate.

Unknown said...

At the end of it I was left with the feeling of standing in a busy highway in Japan.
At the end of it I am left with a deep respect for the Japanese.
At the end of it I am left with a dry thirst for learning more about the Japanese philosophies in the work environment and in Life.
At the end of it I am left with a strong desire to organize my life and my work based on these philosophies.
At the end of it I feel that if everyone in the organization I work for is injected with measured doses of detailed enlarged versions of appropriate portions of this write-up, the organization will become a better one in many ways.
Personally, I am going to make the change happen from today. From NOW!

Narayanan said...

http://www.economist.com/displayStory.cfm?story_id=14793432&source=hptextfeature

Link to a recent article in the Economist on medium-sized Japanese companies, their dominance and what they have to do to retain their position.

Zab said...

Efficient and Effective - that's truly the battle cry of Japanese manufacturing company in the Philippines like Papti.

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