13 Japanese business concepts that will help shift your perspective
All humans have cultural “default-settings” that are “hard-wired into our boards at birth” (David Foster Wallace). They are so encrusted into our thinking that we aren’t even aware that others might have a very different perspective. An obvious and popular example would of course the difference between our western social atomism (where the individual is the primary unit of analysis) and the communitarian perspective of many societies in Latin America, Asia and Southern Europe.
But there are so much more ways in which our thinking diverges from others. And so I wanted to share some different perspectives here that are typical of Japanese culture to show that there really are many alternatives to our default settings, from which we stand to learn a lot.
Solving radical problems: Fu
Like China, Japan is a collectivistic culture. That is why business people tend to look at challenges in a very different way than in the West. According to Toru Takahashi, president of GLOBIS Europe Japanese business people tend to believe that someone else’s problem is their problem too while the typical Western reaction would be “That is your problem, not mine”. In his words: “Problems such as climate change, geopolitics, and the COVID-19 pandemic impact all global societies. They cannot be solved by individual companies or countries.”
So it’s no surprise that the priority of most Japanese companies goes beyond making profit, with a heavy focus on how they can contribute to customers, the community, and society. The concept of ‘Do more for others than for yourself’ is deeply embedded into their culture.
That’s why, according to Tomoko Katsurayama, president of GLOBIS Asia Campus in Singapore and GLOBIS Thailand, “the Japanese cultural perspective is similar to an SDG mindset. The natural inclination is to contribute to society.” Japanese companies want to solve “Fu” which is “some unsolved large issue no one has realized or acted on, and that could potentially transform the industry structure. And of course, this change could generate profit”.
As a side note, to me, “Fu” is actually very reminiscent of Google X’s ‘Solving for X’ formula (or is it perhaps the other way around): find radical solutions to huge problems with breakthrough technology.
Finding the root of the problem
Japanese business people are very calculated and mindful when it comes to problem solving. Rather than trying to fix problems as soon as they occur, they take the time to carefully think about the origin of the problem. They want to find and prevent the root causes of the issue in order to make sure that the same error will not repeat itself.
In the West, we are much more focused on solving. Books on decision making over here often try to develop systematic approaches to giving an answer. To the Japanese, the important element in decision making is defining the question. The important and crucial steps are to decide whether there is a need for a decision and what the decision is about.
Consensus is key: Ringi
Japanese institutions, whether businesses or government agencies, make decisions by “consensus.” The Japanese debate a proposed decision throughout the organization until there is agreement on it. And only then do they make the decision.
In the fast moving business environment of the West, this process might seem frustratingly tedious and slow. But while it may take much longer in Japan to reach a decision than in the West, from that point on they do better than we do. The time that they deliberate before the decision is made, is made up for during the implementation, which tends to then happen faster.
Comfortable with radical decisions
What stands out in Japanese history, as well as in today’s Japanese management behavior, is the capacity for making 180-degree turns. They are said to be comfortable with reaching radical and highly controversial decisions.
A great example from this HBR article is Toyo Rayon (today called Toray Industries ) which is the largest Japanese manufacturer of man-made fibers. It produced rayon until the mid-1950’s and then it decided to switch to synthetic fibers. But it did not “phase out” rayon making, as pretty much every Western company in a similar situation would have done. Instead, it closed its rayon mills overnight, even though, under the Japanese system of employment, it could not lay off a single man.
Hansei is usually translated as "introspection" or “self-reflection”. It is a type of meditation where one looks inside oneself. In the hansei process, the emphasis is on what went wrong and on creating clear plans to ensure that it does not happen again. This is done constantly and consistently.
At Toyota, even if a project is completed successfully, there is still a hansei-kai (reflection meeting) to review what went wrong. If a manager or engineer claims that there were not any problems with the project, they will be reminded that “no problem is a problem”. That means that they have not objectively and critically evaluated the project to find opportunities for improvement. No problems indicate that no one stretched themselves to meet (or exceed) their expected capacity.
Customer service: Omotenashi
You may have heard about Japan’s superior customer service, even if you haven’t visited the country yet. No matter where you travel within Japan, the people are polite, your surroundings are clean, and, as a customer, you often feel like the most important person in the building. This is Omotenashi, Japanese hospitality culture at its finest.
‘Omote’ means public face (the image you wish to present to outsiders) and ‘nashi’ means nothing. Together, it combines to “service that comes from the bottom of the heart – honest, no hiding, no pretending”. The origin of this spirit lies in the Japanese tea ceremony (sado), where the tea master faces the audience and makes tea right in front of them, open and clear.
The true meaning of omotenashi goes a lot deeper than just proving outstanding hospitality. Instead, the omotenashi meaning is about entertaining guests wholeheartedly.
Diversification of products and services
While over here in the West venturing outside of your industry – like Amazon and Walmart in healthcare – is pretty novel as a practice, diversification and not putting all the eggs in one basket is a common idea among Japanese companies, and it has been for quite a while now.
Toyota, for example, Japan’s largest automaker, is shifting from being an automaker to being a provider of “mobility services.” Panasonic sold off its Sanyo white goods units as early as 2012. Today, apart from a small part of the home appliances business, Panasonic’s main business forms are environmental solutions, automobiles, and consumer electronics.
Harmony is a really important concept in Japan. There’s Chowa, a concept that emphasizes the importance of maintaining harmonious relationships and balancing competing interests in business and life. And Kyosei, the concept of living and working harmoniously with others and the environment. It emphasizes the importance of social responsibility and sustainability in business practices.
Over here, we tend to imagine harmony as being like-minded, but Japan has a different view. Very much like in China, Japanese culture is accepting of contradictions. Religions like Shinto and Buddhism coexist and are combined in a unique way, for instance. That creates a culture of harmony.
Continuous improvement: Kaizen
It would probably be considered bad research to publish a piece about Japanese concepts without adding Kaizen, but surprisingly enough the latter was influenced by American business and quality-management teachers. But I decided to add in anyway as it has become so deeply embedded into the Japanese approach to business and productivity.
Kaizen, is a community-driven concept referring to business activities that continuously improve all functions and involve all employees from the CEO to the assembly line workers. It is based on the idea that small, ongoing positive changes can result in significant improvements. Kaizen also applies to processes, such as purchasing and logistics, that cross organizational boundaries into the supply chain. It has been applied in healthcare, psychotherapy, life coaching, government, and banking. By improving standardized programs and processes, kaizen aims to lower defects, eliminate waste and redundancies, boost productivity, encourage worker purpose and accountability and promote innovation. Kaizen is core to lean manufacturing and the Toyota Way.
Go to the front lines: Gemba
In lean manufacturing, the idea of genba or gemba - meaning "the actual place" - is that the best improvement ideas will come from going to the actual place because the problems will be visible there.
The gemba walk, much like management by walking around (MBWA), is an activity that takes management to the front lines to look for waste and opportunities to practice genba kaizen, or practical shop floor improvement.
It’s interesting to see how Japanese culture if full of seeming opposites that harmoniously live side by side. For instance, it is highly focused on continuous improvement (kaizen) and at the same time it also accepts imperfection as part of life.
The concept of wabi-sabi, for instance, values imperfection and transience and appreciates beauty that is "imperfect, impermanent, and incomplete" in nature. It is often associated with the beauty of aging, weathering, and decay and is prevalent in many forms of Japanese art. For instance Kintsugi - the art of repairing broken pottery with gold or silver lacquer – is part of that very same concept.
Characteristics of wabi-sabi aesthetics and principles include asymmetry, roughness, simplicity, economy, austerity, modesty, intimacy, and the appreciation of both natural objects and the forces of nature.
Phoenix & Day After Tomorrow mindset
According to Hofstede Insights, Japan is one of the most Long Term Orientation oriented societies. Japanese see their life as a very short moment in a long history of mankind. In corporate Japan, you see long term orientation in the constantly high rate of investment in R&D even in economically difficult times, higher own capital rate, priority to steady growth of market share rather than to a quarterly profit, and so on. They all serve the durability of the companies. The idea behind it is that the companies are not here to make money every quarter for the shareholders, but to serve the stake holders and society at large for many generations to come.
So it should not come as a surprise that Japan boasts some of the oldest companies in the world. According to a report published by the Bank of Korea in 2008 that looked at 41 countries, there were 5586 companies older than 200 years: 3146 of these, no less than 56%, were located in Japan. Examples of these shinise (long-established businesses that have at least been in operation for a hundred years) are Kongō Gumi, a construction company founded in 578 AD, making it the world's oldest company and Nishiyama Onsen Keiunkan, a Japanese hot spring spa founded in 705 AD.
Negative space: Ma
In Japanese culture, the concept of ma or negative space refers to the intentional use of empty space in various art forms, including architecture, design, and music. It is considered a fundamental principle of Japanese aesthetics and is closely related to the concepts of harmony, balance, and simplicity.
Ma is often described as the space between objects or the space surrounding an object. It can be physical, as in the space between two buildings or the space surrounding a sculpture, or it can be temporal, as in the pause between musical notes or the moment of silence between lines of poetry.
It is also applied in business contexts. During meetings, for instance, where pauses and periods of silence may be used strategically to allow for reflection and consideration of different viewpoints. The result is a sense of openness and receptiveness among participants, which can lead to more productive discussions and decision-making.
I love that Ma is not just an absence of something, but a presence in its own right. It is a way of creating a sense of balance and harmony by carefully considering the relationship between objects and the space around them. Ma can be used to create a sense of tension or anticipation, as well as a feeling of tranquility and calmness.
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