Although Brexit caused an immense economic impact around the globe, it hit the Japanese business world especially hard, resulting in an uncharacteristically direct level of demands from the Japanese government to its British counterpart. But it was not surprising given that it pushed all their cultural buttons.
Instability and Unpredictability
Firstly, the Japanese try to avoid instability and unpredictability. Group harmony, inflexible hierarchies, long termism and love of consensus are powerful forces within Japanese business. We may be used to some level of unpredictability in our decision-making processes, but the consensual decision-making Japanese are not.
They were not expecting the outcome of the referendum, and the feedback and reassurance needed by the Japanese to achieve harmony, enable long-term planning and to ensure there are no nasty surprises or loss of face is still not forthcoming.
Obligations and Commitments
Secondly, there was a sense that obligations arising from their long-term investments in the UK have not been met. Long-term commitments are a crucial part of business in Japan and investments into job creation, training, education and community links by companies such as Toyota (GB) PLC, Nissan Motor (GB) Limited and Hitachi, Ltd. are part of this sense of commitment.
However, this normally comes with a set of reciprocal expectations, including loyalty to your employer or the group. There was a palpable sense of betrayal by those Japanese companies in areas where the Brexit vote was high, especially when they had made some attempt to communicate with their employees.
The Japanese also invested heavily into the UK on a basis of trust in the commitments made by the previous government regarding EU benefits, and the potential withdrawal of these benefits, which were seen as “firm” commitments, has been interpreted as a breach of trust rather than a result of democracy.
Building up trust: a case study
The Japanese are one of the major investors into the UK, and they are still undertaking large global mergers and acquisitions deals from which the UK can benefit economically in these uncertain times. The prospect of Brexit has shaken the foundations of trust, which needs to be re-built not just on a diplomatic level, but by businesses wanting to enter the Japanese market, working with Japanese clients or being taken over by Japanese companies.
I work with companies to support them in doing just that—making sure their dealings with Japan at all levels are set up to create trust and long-term business relationships. One of the companies I recently worked with was Tokio Marine HCC (formerly called HCC Insurance Holdings Inc.), who were bought out by Tokio Marine Holdings last year in one of the biggest acquisition deals by a Japanese company to date. The human resources (HR) department, based in the Leicestershire village of Rearsby, wanted their staff to know more about Japan, as for many of the staff it was their first experience working for a Japanese company and they were keen to build the trust from the outset.
Raising interest in Japan and local links
Together we developed an introductory presentation for staff in Leicester and London to get an insight into current Japanese culture, society, language and corporate philosophy, so that they could understand the background of their new owners.
The staff in Leicestershire also got to find out what was happening in their area regarding Japan, especially as there are many such links through the University of Leicester and the local community. It also formed a foundation for executives transferring these skills to any direct involvement they might have with the Japanese headquarters, so that working relationships were optimised and there were no communication issues.
The positive attitudes from the HR team were reflected in the high level of interest shown by participants and their genuine curiosity about Japan. Every time I visit the office, people are asking questions about the country, and they all know the name of the Japanese representative from Tokio Marine in London—Kenichi Sakakibara—better known as Ken to the local staff.
This interest in Japan and willingness to learn about how to work together properly was acknowledged and appreciated by the Japanese side, and it also led to some recognition among the Japanese business community in London. Although it happened on a very soft level, it formed the basis of a trusting relationship founded on shared understanding and the willingness to learn about each other.