Episode #587: The Collapse Of On-the-Job Training in Japan: A Wake-Up Call for Companies

When I first got to Tokyo in 1979, there was a very well established corporate educational system in Japan. Unlike Universities in Australia where you studied a subject and expected to work in a closely related field, Japan was concentrating on producing generalists. It didn’t matter what you had studied at University, because the company would educate you on what you needed to know. I also discovered that the tertiary educational system was broken, so companies couldn’t rely on Universities to educate the young. I was so surprised to realise that except for those entering professions like law, medicine, architecture, etc., and needing to pass national exams, most students were living their best life (at their parents’ expense). Think a four-year sojourn at Club Med and you get the flavour of spending most of your time engaging in club activities and working part-time jobs, rather than studying.

The principal education tool for companies wasn’t formal training. There were a few weeks at the start as new grads were onboarded, where you learnt about the firm, systems and the basic etiquette of business. After that, your sempai or seniors and your boss would teach you the ropes. As everyone joined the firm for life, there was a logic in the boss spending their valuable time grooming the next generation.

In 1978, the first Japanese language word processor was developed, which allowed everyone to type in Japanese more easily. There were still secretarial pools in those days, so the boss didn’t have to get their hands dirty playing around with this tech. In November 1995 Windows 95 was launched in Japan, which made it easy for anyone to access the internet. With the take up of email, the boss was now required to write their own emails and gradually the secretarial pool went the way of the Dodo.

The upshot is that this change meant the boss and the sempai were now much busier than before, doing their own emails and their own typing. The amount of time available to train the next generation on the job went down and has been down ever since. There was no supplementation with formal training, because the OJT system was so accepted as all that was needed. These changes are glacial, so they didn’t attract much attention on the way through, but things did change.
Where are we today? During Covid, we found a not very amusing contradiction with Japanese corporate training. Those domestic Japanese companies who had already come to the realisation that corporate training was required just stopped in their tracks. They cancelled set classes because of Covid and were worried about the safety aspects of people gathering together.

Dale Carnegie in the US had started online training delivery in 2010, so fortunately, we had specialized manuals for online delivery and certification systems in place for trainers and producers when Covid hit. We could teach them global best practice techniques accumulated over the previous decade. We ran our first online class in March 2020, free for our clients and covering Stress Management. We quickly found that WebEx at that time had a 100 person limit and we crashed the system. We regrouped and completed the training session. We proved to ourselves that using the Dale Carnegie approach of highly interactive training also in the online training environment was a viable option. Unfortunately, many domestic Japanese companies didn’t think so and refused the online option, believing that it couldn’t provide sufficient delivery quality compared to face-to-face. That actually wasn’t true, but nobody in Japan ever gets fired for foregoing opportunities to embrace change and do something new. They didn’t want to return to the classroom, and they didn’t want to do it online, so with this Catch 22, they did nothing.

Some of these companies are slowly coming back to face-to-face training. What Covid revealed though, was that the Middle Manager level of capability wasn’t well developed, having relied only on OJT and they needed to fix this problem. We have been doing a lot of leadership training as a result. The gaps we notice are that the managers are totally undereducated on what is required to be a leader. They have spent time on the job so they can run the machine. They can see that it runs on time, to cost and at the required quality, but these managerial attributes do not make them a leader.

The difference between a manager and a leader is that the leader does all of those things a manager does, plus sets the direction for the team, builds the culture and develops the people. The upshot is that those companies who invest in their people and give their Middle Managers leadership training will do better in the zero sum game for retaining staff. People leave bosses, not companies. With the declining population and permanent shortage of people, replacing staff can be extremely difficult and potentially fatal to companies. I believe the continued reliance on the broken OJT system for training leaders is a nonsense and a suicidal choice. Get your people trained if you want to survive this war for talent.

Young people are much more mobile and one in three are departing their companies after three or four years and joining the competitors. This is very expensive after they have been trained and they are hard to replace. With properly educated Middle Managers, the retention rates will be much higher and will yield a competitive advantage against rivals who have only been trained through OJT. This is no joke and the consequences of getting the equation wrong are deadly serious. OJT is dead. Companies should stop relying on it and should instead get professional leadership training for their Middle Managers before it is too late.