The Seven Habits of Highly Effective Japanese Global Companies

Inspired by the title of the influential Seven Habits of Highly Effective People bestseller by Dr. Stephen Covey, I will look at the underlying mindset and behaviors necessary for the successful globalization of Japanese companies in the most significant areas, as expressed by seven key business “habits.” My definition of “globalization” here does not mean merely copying existing global standards, but rather effectively adjusting Japanese organizations’ systems and practices to engage with global counterparts and markets to the minimum extent necessary to maximize their global business success.

I should point out that these seven habits do not necessarily relate to the principles of Covey’s book, or precisely match academic research. Rather, they summarize my practical experience of more than twenty-five years of intercultural business training and consulting in Japan. While supporting Japanese business people in their struggles to follow domestic with international success across intercultural barriers, we noticed that some barriers were very obvious, while others were unseen. In many cases, even when there was strong realization of the need to change, and even understanding how to go about changing, actually changing the organization and its many employees’ habits was a considerable challenge.

Therefore, in this series of articles, I talk not only about what “global” should look like in Japanese companies, but also what are the keys to making necessary changes happen in reality. For example, employees may be at different stages in their overall journey towards globalization:

  • Stage 1: Unaware of global pressure, and not recognizing any need, urgency, or benefits related to change
  • Stage 2: Aware of why change is needed, but not sure of the type of change
  • Stage 3: Aware of the whys and hows related to change, but lacking the motivation, power, or skills to act on this awareness

I would like to create stage 4 for you here: successfully sharing a version of the Japanese organization’s business culture (its most successful management and working style elements) to which non-Japanese employees and stakeholders can effectively contribute.

My colleagues and I attempt to support all these stages by suggesting benefits, insights, and best practices to globalize Japanese corporations’ systems, leaders, and employees. Changes may be cascaded quickly from the top down to the bottom, but bottom-up change may also need to be executed, especially in conservative organizations.

Japan’s large, and perhaps unwieldy, traditional large corporations seem particularly resistant to fast change. It can seem to a cynical observer as though each wave of incumbent leaders is unwilling to take risks that might deliver failures on their watch. These people may seem to be endlessly deferring necessary future painful changes until after their retirement. In such cases, bottom-up changes can most be effectively delivered in an agile manner, as a series of small wins moving the organization in the right direction and reinforcing motivation and confidence to become more global.

Another key consideration is that all Japanese organizations are different from each other, and each Japanese employee also may have considerable diversity, based on age, gender, experiences, and character. For example, Japanese organizations with founder CEOs may tend to move more quickly and practice top-down management, while those with hired CEOs tend to be more conservative with group-oriented decision-making. However, there are still tendencies we can see at the organizational level in both types which are significantly different from those of their global rivals. In comparison with Western peers, these often include an emphasis on unspoken understanding, team-based working style, Confucian style discussions, and situational-related formality. Similarly, even though American or Northern European companies may have different values or decision making styles, in general, they are likely to prefer an apparently friendlier, clearer, and more verbally persuasive communication style and systems based on individual accountability.

Finally, even though some may have achieved top global market share and profitability, we are perhaps unlikely to see any fully successfully globalized Japanese companies. Rather, globalization is an ongoing journey for each organization as they integrate their head office culture with local overseas office cultures. They may be succeeding in some, but perhaps not all, areas.

Each organization may have its own specific best path for globalization depending on its unique history, working style, industries, production locations, key markets and trends. We believe that even the top global Japanese organizations would be significantly more successful if they could overcome all of their cultural barriers in the optimum way. The articles in this series, then, will attempt to explain the principles and mindset required to help each Japanese organization find its own optimum path for globalization. The recommendations will be based on the seven habits listed below.

  1. Aim to Be ‘Glocal’ Market Leaders
    Provide the right products and services in each major market in an effectively customized way that maximizes demand and profit
  1. Communicate Clearly and Positively
    Promote inclusive information and sharing of ideas so that everyone can contribute to his or her full potential
  1. Innovate from Everywhere
    Ensure full contributions by every region, department, and partner to innovation and future direction
  1. Embrace Diversity: Lead Inclusively and Engagingly
    Ensure that the best workers are rewarded and promoted, regardless of diversity factors, and that all employees want to take responsibility, and feel that they have influence and a voice that is heard
  1. Manage Strategically, Clearly, and Transparently
    Ensure that the management system and working style are both clear and transparent
  2. Motivate All Staff to Reach Their Full Potential
    Find ways to maximize motivation, engagement, and productivity
  3. Embrace Calculated Risk-taking and Change at a Global Speed
    Encourage a risk-taking, fast-moving business culture

Jon James Lynch is the founder of J-Global, which provides organizations in Japan with training in the J-Global method, a powerful new framework of mindsets and skills for managing, working and communicating more effectively in an international environment.

Jon has decades of experience in Japan consulting for business leaders and facilitating training sessions and workshops. In his partnership with the Nikkei Group during the past 5 years, he has expanded his reach to hundreds of leading Japanese and multinational companies.

This article was originally posted on Link Global Solution’s website.