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ASIA: "The Japan Automotive Industry - Sector Report". 8-page report by JETRO Japan External Trade Organization.
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backASIAtalk June, 2009
Know the Culture – Values to Keep in Mind When Doing Business in Japan
One of the most frequent pieces of advice given about doing business in Japan is "Know the culture." Well, what does that mean exactly? JETRO asked Brian K. Heywood, managing partner and CEO of Taiyo Pacific Partners LP, to describe some of the major values of the business culture from his extensive work experience in Japan.
Mr. Heywood spent seven years with JD Power & Associates, and two years with Citibank as Vice President and Head of Sales for its 22 retail branches in Japan before starting the Taiyo Fund in 2003 with renowned investor Wilbur Ross, Jr. as a member of the investment committee.
Below, he offers the values he found to be important for foreign companies to keep in mind when conducting business in Japan.
Value 1: Patience
This is probably saying a lot more about me than it does Japan because I went in very impatient, wanting to get stuff done now. Most foreigners have a year, two, maybe three, and then they have to go back. So in those two or three years, they've got to get things done.
But the Japanese person can say, "My company has been here forever," and in some cases, "My company has been here longer than your country has been around, and I don't have to make any changes right now."
You don't want to wait forever to get the change done, but you need to realize that you've got to find other ways to get that change to happen – by aligning interests.
You can't go in and say, "Here's the logic. We need to do it now." You need to go in and find out how to align your interests.
Value 2: Relationships
In the US, you're raised to ask questions, to put logic there. And logic is almost the highest of virtues in US business. If you put the right logic there, then everyone will see it, and they'll go, "Oh, yeah, ok. Then let's go that way." People in Japan don't necessarily put logic first.
An example of that is, in our business, let's say we went to someone and said, "You should take your company private. You'll make a lot more money that way, we'll make some money, and we'll all win." We don't know them, but we present the logic to them. The logic is really compelling, and everybody's going to do really well in the deal.
But the management says, "No, I don't think so." And as an American, you say, "Why wouldn't you?" And maybe five people will approach him with the same plan, and he'll say no to all of them.
But someone else goes out to eat with him, and they find out the guy likes to go fishing. He's got a summer home down in Izu, and he goes to Hawaii twice a year. He spends six, eight, ten, twelve months working with this manager. And he might not even have the best deal on the table, but because he knows the manager, because he has that relationship with him, he gets the deal and nobody else does. And it's not based on logic; it's based on that relationship.
Value 3: Saving face
In some harsh corporate cultures in America, you win by cutting someone else. In Japan, if you do something that makes someone look bad, on the surface they may smile and seem ok, but they can be patient and end the deal or your chances later on when it may be too late for you to change direction. Find a creative solution to their problems or concerns, and you will have an advocate for life and strong supporter in making the deal move ahead.
Value 4: Finding the right balance between "being Japanese" (i.e. when in Rome) and being a foreigner
Being Japanese, there is a time to bow and apologize; there is humility that's built into the language. There are times, as a foreigner, when you have to know how to act Japanese. Especially as an American, you're instinct isn't to be quiet, but sometimes you just have to. Just be quiet and listen.
On the other hand one of the mistakes that I saw US companies make in particular when they went to Japan was that they would go to one extreme or the other. They would either come in with this cowboy attitude and try to be totally American, or they would do the opposite extreme, which was to be totally Japanese.
But the Japanese are expecting something different from foreigners who come into the country, so there is this unique advantage that foreigners can benefit from when you have something that is unique to the Japanese culture—not to be arrogant about it but to share it.
Value 5: Patience
Value 6: A little more patience
Source: JETRO - GAI
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