Episode #285: Japan Inc

“What anchors their behavior is the salaryman’s desire to protect himself – no one wants to put their position at risk by telling the truth”. This little gem of an insight was made by a retired nuclear engineer who worked for Toshiba. He was referring to the various scandals that had taken place there and explaining why illegal decisions made by senior management like cooking the books went unchecked internally.

Corporate Japan in some ways, could be a modern model for George Orwell’s dystopian novel “1984”. Big Brother is the leadership group who define that truths are lies and lies are truths. They determine that anyone against the system must be eliminated, because 100% loyalty is the minimum. There are facts and then there are “alternative facts”. The bosses do the thinking around here and your job is to carry out their genius ideas.

This is not surprising, because kids are inculcated into accepting authority, doing not questioning, following authority figures, even if they are only one year older. Sempai (seniors) sensei (teachers) are respected as part of Japan’s Confucian construct. Group responsibility lessens the burden and gives air cover to individuals. They have learnt this is essential if you want to avoid the stain of failure on your record. When everyone is responsible, no one is responsible.

Errors are kept track of and come into play later in your career when the bosses consider who gets the promotion to move up and who goes sideways. That is one of the reasons HR is so powerful in Japanese companies – they decide the transfers to new roles and locations and they have the dirt file on everyone as they come up through the ranks. This system guarantees little risk taking or attempts to push the envelope fold. Keeping your head down and a low profile is the safe path forward.

So how do we get innovation going in our companies? The innovation process has trial and error built into it, by virtue of the fact that what we are going to do is new, untested, experimental. How do we test stuff if no one wants to try anything new, because there is a risk of failure?

The fear of failure restricts people mentally from the very start. They are afraid to voice opinions because they have learnt from early childhood that going along is how you get ahead. Don’t stand out by taking a stand. Blend in, find the absolute middle of the fence and sit there. If the survey is a one to five scale select three for everything.

Just employing someone into your firm doesn’t erase years of conditioning here about what is acceptable and what isn’t. Yet, we hear foreign executives moaning about they don’t get any quality ideas from below, that productivity is low, decisions are painstakingly slow, people don’t contribute during meetings, etc.

All true, but not a fait accompli. The environment for failure has to be secured. The fear to step out has to be replaced with rewards for trying, not just succeeding. Performance reviews and the measures used have to be changed away from just outcomes to include more process. Process in the sense of generating ideas, suggestions, taking risks, trying new things. All unrelated to actual success.

If we only reward success, then we had better hope we have a bunch of geniuses working for us. In the Western work environment, we reward success but we don’t see failure as fatal, if people fail in the right way. Being incompetent in your current task is not acceptable. However, pioneering some new intervention or iteration is seen as good work and if it fails, the lessons learnt are considered valuable and the person is not terminated. HR is not making a note for later reference when the promotions are being considered.

In a Japanese context, nobody believes failure is not fatal. It has to be shown that failure is acceptable as part of the innovation process. That means bosses have to walk the talk. The worst case is saying we welcome innovation and then whacking someone in the head as soon as they fail.

Maybe “innovation is good, we accept failure as part of the process” is the ethos in the dark wood paneled recesses of the executive floor, but it also has to permeate the culture throughout middle management. Getting middle management to accept this culture requires a lot of re-training in Japan. However, is this factored into the firm’s formal innovation process or are we just hoping for the best instead? Let’s make sure we are all walking the talk and sending the right message of “your ideas are welcome here, experimentation is welcome here, we understand not every attempt will succeed but we support the attempts regardless”. Innovation is needed and the process is messy. Our internal systems and corporate culture have to be able to deal with that reality.