Episode #305: The Japanese business Glass Permanently Half-Empty

Many years ago, my job was to help Australian companies crack the Japanese market. One of the elements of that job was explaining the Japanese business psyche to the Australian businesspeople targeting Nippon. As you might imagine this wasn’t an easy task, as the mindsets are so different. White colonisation of Australia started in the late 1700s and the first convicts and settlers arrived into a vast continent, without one permanent structure, bridge, road or port. Aboriginal life was nomadic. Hunt everything you can in the area around you, then pack everything up and move to the next location. You didn’t need modern infrastructure for that lifestyle.

The consequence has been that the culture built up amongst the early English settlers was very much one of “can do” and optimism that they could tame the heat, droughts, fires, cyclones and floods that are part and parcel of life in Australia. Six generations ago, my ancestors hacked their way through the bush by hand, to create fields for agriculture and to feed the cattle and sheep. If you couldn’t take it, you could always go back to Mother England.

Japan is a also country with no shortage of natural calamities. Earthquakes trigger fires in cities and wooden houses burn quickly. They also trigger tsunami and these can wipe out entire towns, as we have seen in 2011. Typhoons and floods destroy crops and building. Floods and landslides are common. My super wealthy, famous Japanese friend was walking his dog after heavy rain and a wall suddenly collapsed and killed him. Japan has volcanos as well and recently the well known Sakurajima volcano has had a major eruption. This tough environment is part and parcel of Japan and there is no Mother England to retreat to – this is it for the Japanese population. The mindset of the Japanese in my experience is one of the glass is half-empty and life is difficult.

When I was trying to explain the different attitude between the Aussie glass half full and the Japanese glass half empty approach, I found a useful comparison. I discovered a graph showing the degrees of business optimism in Australia spread over many years. Fundamentally the Aussies were positive and optimistic. Japan has regular tankan surveys of business optimism and fundamentally the Japanese scores are usually negative or very low in terms of positivity. When you compare the graphs, the results are strikingly different.

Historically, when a person working the land in Australia needed to replace an implement, there would be a six month turn around, as the sailing ship went off to Merry Old England and then sailed back with the replacement. In the interim, people became innovative and flexible about finding a solution. It created a “can do” mindset, because there was no choice. So having these problem solving, positive, “can do” Aussies convincing Japanese buyers to start relying on them was a huge job. I would show them the graph of how basically for the Japanese the glass was always half-empty and so the Aussies should curb their enthusiasm and approach the sale in a different way.

This is a generalisation and it doesn’t make it any less true, but Australia is a country of creating things out of nothing and finding solutions and Japan is more one of caution. Once you understand that the Japanese are not expecting anything spectacular to happen and are more concerned about things going horribly wrong, then you focus on reducing risk, rather than trumpeting your capability and your successes. This is where track record, data and “smarts” about doing business in Japan come in.

Japan is a graveyard for MVP (Minimum Viable Product) launches. The product has to be working extremely well, with no defects or problems. If it has any of these issues, the situation becomes problematic very quickly. Similarly, early adopters in business are a small crowd here. Basically, in business, nobody wants to go first. “You trial it, we will watch very, very carefully and if it doesn't blow up, we may take a look at it” is the usual ethos. Note the word “may”, because even if it goes well, they may not take any action. You don’t get into trouble in a Japanese company for not being a path finder. Steady as she goes is preferred to anything smacking of risk taking.

When things go wrong in Australia, then the suppler gets to work to fix it and if some money needs to change hands as a result, then it gets done and everyone moves forward. In Japan, you have to fix it, but that isn’t where it ends. You have to head around there to apologise in person, bearing gifts and expect to be lambasted for your poor reliability and shoddy work. You also have to have forensic detail concerning why this problem occurred in the first place and a detailed, clear plan of making sure it never happens again. Even then you may be removed as a supplier, especially so if you are not genuinely contrite and authentic in your remorse, for having caused the buyer problems. Never forget, your buyer has their own buyers. If your problem got shared with their part of the food chain, then you have endangered their trust with their own clients. This is the most disgraceful and egregious error you can make for any Japanese company who values their reputation and they all value their reputation.

Approach the deal with a solid understanding the Japanese side isn’t going to get excited about your widget and that they are world champion sceptics. Emphasise the track record, safeguards, measurement systems, quality control and the worst case scenario plan of action. Expect to start small, in order to prove what you say is true. Keep in mind that apart from you, no one is in a hurry to do the deal and so adjust your expectations accordingly