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JAN 17, 2018

Beyond the Paradox: Understanding the Secrets of Japanese Business

With Cristian Vlad, Tadahiro Wakasugi

For people new to Japan (but certainly not limited to them), it can be a challenge to understand how to do business. Many concepts seem mysterious at first, or, even if understood, remain paradoxical at best. And yet, many people claim that if you can do business here, you can do it anywhere. For the GLOBIS JMEx program, our faculty shared their hints on the local business culture with our overseas students. Here is Part 2.

Toyota: Diversity + Kaizen = Exponential Innovation

Students of Japanese business may know of the Toyota Business Principles, and the Toyota Way. Perhaps the most famous part of this is known as kaizen: gradual, incremental improvement or innovation. Cristian Vlad, a Romanian who has lived and worked in Japan for more than twenty years, including working with Toyota, shared with his students some of the most frequently encountered procedures in the kaizen process: 

– saki-yomi (先読み – reading the future: being ahead of the game)
– koma-yomi ( 駒読み – reading the game: being able to “read”/predict the moves of each individual player)
– soi-kufuu ( 創意工夫 – creative and original ingenuity)

Sometimes, however, a company is faced with a situation where innovation cannot be done incrementally, but new “start from scratch” ideas may be required (the Toyota Prius being a good example). In cases like this, diversity (diversity of thought, experience, aspirations, etc.) can be a great resource to stimulate new ideas and innovation, especially exponential innovation and leadership. Furthermore, ecosystems of open innovation—where customers and thought leaders are invited to co-create products and services together with the developers—can create a process for continuous innovation. Innovating something one time may be attributed to luck, but repetitive innovation can be the result of a great deal of thought into developing a process for continued growth.

As examples, Mr. Vlad showed the case of the Sheraton Marina Bay in Okinawa and Toyota’s Window to the World project, where advanced analytics and the reverse engineering of customer experience in Europe gave birth to new applications, with functions relevant to the global market.

Paradoxical Thinking: Accepting the simultaneous existence of opposites

Japan can tend to befuddle many outsiders, and economists are no exception. For example, Japan has had, for decades, a weak economy yet low unemployment and almost zero (even negative) interest rates but weak investment. Again, these go against the conventional theory. (Perhaps “convention” needs to be challenged and updated.)

Tadahiro Wakasugi explained to students that culturally as well, one can often find in Japan an “appreciation of wholeness”—an acceptance of dichotomy in embracing yin and yang, good and bad, or A and B. In other countries, many people are uncomfortable with such dichotomies existing simultaneously. Japan has historically been accepting of traits incorporated into society, such as the effort to combine two different religions, Shinto and Buddhism. (Japan can be said to be both 70-80% Buddhist and 80% Shinto). Another example is the so-called “KY,” or “reading the atmosphere.” In a group discussion, Japanese may tend to listen to all viewpoints and respond in ways that do not upset the group dynamic.

What does this mean for business leaders coming to and working in Japan? It may mean opening yourself up to new ways of thinking, perhaps uncomfortable or even illogical. Taking an attitude of appreciation of wholeness could lead to new forms of innovation (such as a new combination of A and B). On the other hand, it could also lead to maintaining the status quo (embracing the bad), so be on guard to make your own positive contributions as well.

As with any cross-cultural encounter, the key lies in first understanding yourself, and then understanding the other, and finally looking for ways to create something new and beneficial.

Top image copyright: PaylessImages