Episode #346: Hire People Smarter Than You And Trust Their Judgement

Allan Smith: Ex-CEO of RGA Japan

Generally speaking, compared to other nationalities, they are a bit more reluctant to state their opinions so you have to know that, and cater for that by asking for opinions and waiting. They do however speak amongst themselves, so another useful source of information is having fellow Japanese people who are willing to come and tell you the vibe of things going on.

I have found in Japan there are two extremes. People who do not speak English well, but want to speak English, and people who speak English perfectly well but would rather speak Japanese.

Employees always rate the company and their job satisfaction as very low in Japan, but that is a cultural bias, no matter whether you survey Japanese companies or foreign companies in Japan.

I tried to go out once a month with my direct reports and I expected my managers to do the same with their direct reports.
I always tried to hire people who were smarter than me, and then trusted their judgement.

We tried to share best practices, for example, instead of each division writing their own internal guidelines, we would come up with the best template and distribute it. Internally, I found this worked well, but externally with clients, I would sometimes run into the problem of the clients employees not taking it on, because it was not from their own rules.

My philosophy is you do not fire someone without a cause. You coach them, you involve HR, you come up with a plan and you give them time to implement it. If nothing changes, then you say maybe this is not the place for you. It is different to if they are not performing or they do something contrary to code of conduct. But in most cases, I found if someone was not fitting in, either because they could not get along with people, or they could not perform to the level required, if they had a sense of pride, then they would look for another position of their own accord.

I have generally found that Japanese are good at taking an idea from another country and rejigging it for the Japanese market, so that concept of kaizen.

Foreigners have a tendency is fill silence, but in Japan, it is important to not try and fill up and space, but use it as a pause to allow Japanese people to speak up. Another useful tactic is to ensure that someone is asking their opinion before the meeting. It is easier to get opinions outside the meeting.

If you have a situation where the company is not doing what you ask them to do, then it is a big problem, because Japanese will turn any organization into the Japanese model of not-for-profit, market share driven organization if they can. Profit is seen as inefficient, because you have to pay tax, and then give what is left to the shareholders, so it is better to expense it in hiring more people and having a larger organization.

Foreign companies that are successful in Japan are successful because they are not doing what everyone else is doing. A good mix of Japanese and foreign staff is necessary. You need a good mix of people who have experience in the market and people who come over with new ideas so that they can work with each other. Having a dialogue and coming up with the best approach is ideal. You shouldn’t have too much of one or the other. If you have a completely American organization in Japan, it's not going to work. If you have a completely Japanese organization, it's just going to be like every other Japanese company. So, I think the advantage is having that mix.