Creating a successful business culture

Today’s Japan presents huge opportunities, both personal and professional. Residents can enjoy safety, quality education, and a variety of lifestyle activities. What is more, the country has a developed economy with much potential for growth.

Of the many factors that have made this possible, not least are cultural and historical considerations. Thus, when we look to the future, one of the biggest concerns of many firms is how to facilitate further growth after some 20 years of relative stagnation.

There is a demand for cultural change in the Japanese workplace, in particular because the ability of businesses to thrive in the global economy is somewhat restrained by the culture.

While localisation is critical for the success of any firm, solution or product in overseas markets, at what point does the cost outweigh the benefits? For example, one must balance Japan’s highly valued need for decision-making by consensus and contribution with that for efficiency and structure.

Determining this elusive equilibrium requires that we ask ourselves what will achieve the best outcome for clients.

Doing anything simply because “that is how it is done here” or “that is how we have always done it” cannot be considered acceptable reasoning. Even as many culture-based practices produce fantastic results for the client, some tend to hinder the best outcomes.

Thus, the culture of a business must be open to logical dissection, not just fit traditional cultural norms. The deciding factor is whether a firm’s current culture is helping it attain the best outcome.

The same approach can be applied to the current regulatory environment that Prime Minister Shinzo Abe is struggling to change. In fact, the present regulations are undermining their objective, namely, to provide stability and security for society.

The current framework discourages employers from taking a chance on increasing salaries or hiring more workers simply because the system lacks the flexibility to allow the measures to be reversed should the current optimism not become long-term reality.

The challenge that the current regulations pose has been recognised by a broader range of people than just the newly arrived expats or Asia–Pacific managers on a brief visit. In fact, it is senior Japanese managers who often advocate change, albeit they may be unsure how to proceed.

So, how can one bring about change? Based on my own personal experience, implementing change requires a long-term commitment of about two years.

Before changes are implemented, first of all consideration should be given to whether one can afford to incur short-term fluctuations in the interests of fundamentally improving the business over the long run. One should be prepared to write off some changes in performance; ultimately, the results will be worth it.

Second, the total commitment of the entire executive team should be secured.

Third, the change should be communicated to the rest of the staff, while what is, and is not, acceptable should be clearly stated. People will be against the change—some openly and others behind the scenes—and some may even attempt to ignore the change, hoping it will go away.

Eventually some people will resign, which is good. As recruiting specialists, we have seen countless cases of businesses benefiting from staff turnover, when people who are not the right cultural fit resign and are replaced by others who are aligned with the firm’s new way of operating.

It is important that, following change, the message be consistent at every meeting, and form the basis of every decision. Over time, it will become the norm. Until then, one should stay the course and constantly ask whether any fluctuations that do occur are taking one to the desired goal.

The need for discussions, explanations and an exploration of the reasoning behind new measures are important buy-in mechanisms. However, after six months, one should draw a line and assert that the changes made are here to stay.

The culture of a firm is critical to its success. Equally, the cultural influence of Japan is critical to success and is a real differentiator. Business leaders now have the best opportunity in more than two decades to move the country forward. But this can only be achieved through an understanding of the right cultural balance.