Episode #519: Empathy, Underperformance Management And Dealing With Population Decline As Leaders In Japan

“Does this candidate have a pulse? Yes? Then we need to hire them”. Does this sound ridiculous, a fantasy and dystopian snippet from the future? The Japanese Government says that if we don’t see a turnaround in the population decline before 2030, then the country will get tipped over the edge and into a decline from which it cannot easily recover. Covid wiped out the tourism and hospitality industries and there are still difficulties in hiring people. A lot of workers decided these industries were too unstable and have quietly moved elsewhere and are not going back.

If you need English speakers, then good luck because they are in massive short supply. The Kishida Cabinet says they are going to encourage 150,000 young Japanese to get degrees overseas. This is up from the current 62,000 a year and they want to achieve this increased target by 2033. That is good and we need this programme to work, but what do we do between now and 2033? Once upon a time, the foreign multi-nationals had this English-speaking market for themselves. Western educated English speakers were a challenge for Japanese companies, as they had been exposed to foreign concepts and weren't as easy to manage as local staff.

Things have changed. Japanese companies have to search beyond Japan for new and larger markets, as Japan contracts and the domestic growth prospects are meager. The problem with this approach is you need people you can send off shore to run the show or you need people here, who can deal with the enterprise staff located overseas. Now these domestic but internationalising companies are vying for the few English speakers. The move toward meritocracy rather than the typical nenko joretsu (年功序列) escalator promotion system has made domestic companies more tolerable. Mid-career hiring has also become more accepted, so this gradual increase in flexibility makes it easier for domestic companies to jostle for English speakers.

We are moving to a free agent system of employ, where the candidates are interviewing the hiring staff, rather than the other way around. Does this firm provide training, allow working from home, what is the work/life balance philosophy here, etc., are the types of questions popping up in interviews, which we have never had to contemplate before.

We know that 80% of the staff account for 20% of the results and in the past we had some freedom of having the worst performers move on. Given the hot market for candidates this is still a viable option, to have them depart willingly, except what do you about finding a replacement? I heard a Japanese HR executive working for a foreign multinational making some macho remarks about moving out underperformers the other day and I was quietly thinking, is that really a sustainable policy, given where we are headed? What fantasy world is this guy living in?

The future for leaders is going to be how to lead seriously underperforming staff? We have all grown up in a buyer’s market and we are now in a seller’s market. We were raised on tough love and no excuses for underperformance, but if we apply this regimen, we won’t have enough staff to run the organisation. Suddenly, empathy has become a clear market differentiator for leaders between those who will keep staff and those who will see them tramp out the door to the competitors. What empathy did we experience on the way up through the ranks? Not much that I can remember, so how do we tap into this mysterious well of goodness and bonhomie?

Our staff are also getting older and it seems to me that there is a definite increase in sick leave requests. I don’t know whether the pressure of modern business is causing more stress than before and therefore sick leave applications are increasing or is it because they are just getting older? Time off has to be respected for illness and we can’t be beating the drum to ramming speed on the oars of the slave galley, just because we can. Bosses need a lot more patience with and empathy for the team and more tolerance for the days of productive work which are increasingly being lost. They are definitely lost but the targets are not coming down to compensate.

We are finding ourselves in a vice. We are being crushed by targets and the pressure to produce on the one side and a staffing situation on the other, where if you push too hard, you won’t have enough people left to run the ship. Despite our own harsh upbringing in business, we have to strike out in a new direction where communication, people skills, empathy and coming out of your Comfort Zone are the aces in the pack for leaders.