There is earthquake activity in Japan. Not the ground shaking and destructive kind but it will still be earth shattering in its own way.
In Japanese business, there is seismic activity that can no longer be contained beneath the surface or within country. Japan is being forced to open up due to major corporate scandal and inefficiencies that have placed a long overdue spotlight on the way some things are done.
Japanese companies from now on will find that they can no longer hide behind the “we the Japanese” curtain that has veiled corporate ineffectiveness and given a mythical view of their management styles. The boom of 80s is over for all of us. What worked then, is not working now.
The inefficiencies, the backward thinking and lack of much needed new thinking are pushing their way to the surface after years of deep rumbles and ruptures underground. The Japanese “face” cannot hold.
And this might be what saves Japanese business going froward. When companies are forced to see what is not working, faced with non-containment of processes and policies that are outdated and revealed to be causing more problems that they solve, then it is time to change.
Japan Airlines is pretty much bankrupt. Toyota is facing massive recalls and a PR nightmare on a global scale not experienced by them in all their history, to name just a couple. Usually the massive errors and scandals that hit Japanese companies have been contained in Japan and dealt with in a much quieter way in their own country, but no more.
Japan is finally seeing being a global player means that all of you is on the global stage. The good, the bad, the ugly and the embarrassment.
If Toyota handles this crisis the correct way and if Japan, Inc. in general takes this as a much needed lesson and starts to institute some major changes, we will look back on this as the turning point when Japan realized that it needs to use its traditions as a foundation with which to build on and innovate rather than as a way to excuse outdated thinking and methods and a lack of corporate evolution.
Martin Fackler's article, In Toyota Mess, Lesson for Japan last week in the NYT is more than timely, it is urgent. For Japan, the train has long left the station and it is not going to return. So what can the nation do to catch up in areas that it should have been leading?
As there is evolution of species so too must there be evolution of thinking. What has been the thinking in Japan for the past twenty years?
The following sentence from Mr. Fackler's article sums it up "Many economists and business executives say they hope that Toyota’s trauma will be the wake-up call that Japan needs to understand that its reliance on manufacturing and industrial exports, which served the country so well after World War II, is no longer wise."
If it worked to build the nation after the war, it was thought that it would always work. Not so. Japan did what it needed to do to rebuild after the war and it did it brilliantly. Where it has fallen short overall is that it has not adapted to the way the world has been evolving in the past two decades.
When I tell people that I am a Japan-US business consultant and I work on a lot of technology projects between Japan and the U.S.-- they are always surprised because they think the Japanese are so advanced in technology that they don't need any help. I always smile at this--it is part of the misconception about Japan. Yes, Japan is technologically advanced when it comes to hardware and manufacturing. But in terms of information technology and software, it lags behind as Mr. Fackler mentions in his article.
How can this have happened? I will try to answer that question in the coming days.
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