Lessons learned doing business in Japan (and some handy tips)

We all have our idiosyncrasies. In the structured Land of the Rising Sun, institutionalised politeness and honour sometimes flourish in a visual field of explicit comics and drunken karaoke-singing executives. The lesson is nothing is quite what it seems. If we’re to succeed in Japan, it’s vital to understand a mindset moulded by tradition. And we don’t have to look far to see it in 21st century guise.

With this in mind, I’ve gathered some revealing anecdotes from my 15-year stint working with a Japanese company in the US and Australia. I observed many foreign companies come (and go!) in the Japanese market, and know that embracing the cultural differences will certainly tip the scales in your favour.

The Paradox of Loyalty

While Japanese are not known for showing emotion in public, I vividly recall the tearful Japanese call centre team leader on one of my business trips. For four years, she’d worked on a small US account and, thanks in part to her work, the account was stable and successful. Yet when her boss offered her a promotion – the opportunity to work on a new, much larger account – she burst into tears. Her strong inclination was to remain loyal to the client she’d worked with for so long, rather than accept a more lucrative transfer to a new responsibility. While this situation would be surprising in a Western firm, in Japan, it’s simply a reflection of the importance of loyalty and human relationships in business. (Paradoxically, perhaps, my personal observation is that extra-marital affairs amongst co-workers are more common in Japan, placing the issue of loyalty in a different light.)

The Ubiquitous “Zu”

If ever there was a culture that liked expressing concepts and plans in diagrams and flow-charts (“zu”), it’s the Japanese! This sometimes leads to frustration in business between Japanese and Westerners, who prefer words (“Oh no, not another zu”, I must have said a thousand times!) For the Japanese more than other cultures I know, arrows, circles and boxes seem to make concepts easier to understand. So if you’re making a presentation in Japan, throw in a zu or two, and you can’t go wrong!

Overtime and Underpaid?

It’s well-known that Japanese executives frequently don’t take all the vacation days they earn. But it’s interesting that even amongst call centre agents on an hourly wage, there’s a willingness to stay and complete work without overtime pay, and without pressure from their manager. Such is the ingrained sense of obligation to the company and readiness to make personal sacrifices for it amongst Japanese employees.

When Apologies are due

One of my clients was a European ecommerce company. When Japanese consumers bought online, they didn’t always want to pay by credit card – some preferred payment at a local convenience store, at pickup, and others preferred postal or bank transfers. The European firm’s systems did not accommodate these different payment preferences well, causing a lot of customer dissatisfaction. In fact, the call centre was burdened with a tsunami of complaints. Recognising this, the firm’s most senior Japanese executive turned up at the call centre one Saturday with a massive box of chocolates for the agents, apologising in person for the inordinate number of complaints against his company. This story illustrates the importance of the customer service team at the executive level, and the sense of accountability at the top when things go wrong.

Apologising for poor quality merchandise is just as important as for poor quality service. Japanese consumers demand a higher quality of merchandise than almost any country in the world. I recall numerous cases where consumers returned merchandise for reasons considered too picky by overseas marketers, and demanded reimbursement for the cost of shipping. Likewise, a damaged box may be considered unsatisfactory in Japan, where packaging and wrapping are an art form. (The head of a wrapping company told me staff training is two years!) This cultural gap causes frustration on both sides. A discount or gift certificate may not be enough for the disgruntled Japanese consumer, who appreciates a more sincere expression of apology. A personal apology letter from a senior executive would probably go further.

I recall friction with US clients who would tell the Japanese call centre to stop wasting money calling customers to apologise for things – a mismatch between what a Japanese company considered important to retain customer loyalty and the no frills Western approach.

Consensus and the Price of Failure

Japan has always been a “consensus society”. The “ringi-sho” (proposal circular) used in Japanese business is the ultimate symbol of this. This is a document which is circulated around to relevant employees to get their thoughts and buy-in on a new idea. So by the time it reaches the big boss for stamp of approval, everyone is on board and in harmony.

In preparing for implementation of a new project, much time is spent on building consensus and a good relationship amongst team members. In some markets, RFIs, RFTs and RFPs rule, with some government agencies and companies signing contracts without ever spending any get-to-know-you time with the vendor. My Japanese colleagues were always bemused by this approach. One client was the Japanese arm of a US multinational, and they needed to follow the process of issuing an RFP to 5 vendors based on head office instructions. They followed instructions, but the only company they ever intended awarding the business to was the one that had patiently built a relationship with the Tokyo office.

NDAs (non-disclosure agreements), while common practice overseas, used to annoy my Japanese colleagues as they were wheeled out by our US clients just to have a preliminary conversation – it was as if the relationship with the prospective client was based on “we don’t trust you” from Day 1. Producing an NDA for signature at a first meeting is a guaranteed recipe for failure, as it will never be signed on the spot.

Westerners sometimes accuse Japanese of not taking initiative, and not speaking up when they think there’s a better way of doing things. We should remember that in Japanese society, the price of losing face through failure is heavy (historically, suicide was the ultimate expression of unbearable loss of face, whether in business or politics.) “Japanese society is not generous to a failure,” one of my colleagues once said, justifying his reluctance to challenge the shipping and payment options of a client, which he privately didn’t think would work in Japan. He didn’t speak up because he was afraid of losing face if his objection was disregarded.

Japanese consensus is even visible during the lunch break, where one person’s order of a restaurant’s prix-fixe special will trigger a series of the same orders from co-workers – perhaps conscious that a different order may cause a delay in their colleagues being fed? “Kizukai” (thoughtfulness) flows through Japanese culture. Indeed, where else would the Chairman of a billion-dollar company send personal birthday cards to his employees around the world?

Tips for Tokyo after-hours

Finally, having just come back last month, here are some places you might like to visit in Tokyo when you're not doing business:

1. Uobei Zushi in Shibuya (a sushi restaurant with no waiters, everyone has an iPad style screen, and your order is delivered via high-speed conveyor belt directly to your seat).
2. VR Zone and Mystery Circus in Shinjuku - for the latest in virtual reality and Japanese-style escape rooms (some as short as 10-minute experiences, and in English)
3. A day-trip to majestic Mt Fuji, with a visit to Owakudani where there's an active volcano and you can eat black eggs said to prolong your life by 7 years!
4. Sundays head to the crowded Takeshita St in Harajuku for an out-of-this-world dive into a sub-culture where women wear pink wigs and teens dress in various costumes
5. Visit a (family-friendly) Maid Cafe in Akihabara for an unforgettable and bizarre experience which really defies explanation (just go!)

And keep an eye out for interesting names of Japanese fashion shops - we noticed "Psycho Bunny" and "Loveless" - and animal cafes featuring, variously, miniature dogs, owls, cats and echidnas! If you can't get to Mars, head to Japan :-)

Sharon Melamed started her career as a Japanese-speaking call centre agent, and went on to become Senior Vice President of a fast-growth Japanese BPO, Prestige International (now traded on the Tokyo Stock Exchange). Today she leads Matchboard, a business matching platform she founded with inspiration from the Japanese - the business model is based on trust and an obsession with customer satisfaction.