Strengths and Weaknesses of Japanese Companies

Strengths: Continuing to do the right thing

Japanese people are very good at continuing to do things in a steady manner. If you continue to do the wrong thing, you will not succeed, but there are many companies in Japan that continue to do the right thing, even if only little by little, on a permanent basis. I think this is the secret of the strength of Japanese companies.

Being late for an appointment is a little thing if it is a one-time incident.  Failing to greet or listen to someone would not be a big problem if it just happened only once.  

Japanese companies are good at caring about details.
Japanese companies are good at caring about details.

However, what do you think will happen if you are always late, make no greetings, and take a rude attitude toward other people?  Though each behavior may seem to be insignificant, the accumulation of choices you make on whether to go right or left will make a significant difference in the outcome.

We should be aware of the law that, whether it is a success or failure, the result of our attempt ultimately depends on the accumulation of our small, ordinary, and insignificant doings.  Each of our successes and failures is something like an epic poem composed by accumulating seemingly little things we do in our everyday life.  This law also applies to corporate management.

“No matter how trivial the job appears to be, it is a part of a big project.  If the job is not done successfully, the whole project cannot be completed.”

These are the words by Eiichi Shibusawa (“Rongo to Soroban (The Analects and Abacus)”), who is known as the “father of the modern Japanese business world” because he played a role in the establishment of more than 500 companies around the start of Japanese capitalism.  Recently, I have found interesting that Tadashi Yanai, the founder of Uniqlo, was saying a similar thing as follows:

Planning is perfectly done in a Japanese company before conduct.
Planning is perfectly done in a Japanese company before conduct.

“What is common to successful companies is that they have been doing the right, small, and fundamental things thoroughly.  Many companies fail to do these things although they may seem to be doing it on the surface.  To do the fundamental things, small things and things that are 100% right thoroughly and continuously.  Once you decide to do so, you have to stick to it.  This steady implementation is very important.  Even a gap of 0.001 meter or 1 millimeter gets bigger and bigger as time advances.  Things will eventually work out if you focus on the basics every day.  You won’t be able to go to the next stage otherwise.  The key to success is to keep doing the fundamental things every day, to do them so many times that you get fed up” (“Kyusho Ippai (One Victory and Nine Defeats)” by Shinchosya Publishing).

The truth is the same throughout the ages.

Weakness: Little Learning from Experience

Trial and errors are necessary to do business.
Trial and errors are necessary to do business.

It is gratifying that the overall level of Japanese people’s academic career has increased.  At the same time, however, it is sad that more and more people have gotten the wrong idea that knowledge from books can be used as is in the real world.

There are things that we can teach and learn.  On the other hand, there are things that we cannot teach or learn and we therefore have to find the keys to them by ourselves.  It is important to separate these two things clearly.

Knowledge can be taught and learned, but wisdom cannot be taught or learned.  For example, the theories of business administration can be taught and learned, but corporate management itself cannot be taught or learned.  The know-how for management can hardly be explained by words, so we have to obtain it on our own.  To do so, we have to sweat and labor at actual work and continue our efforts so that we can catch or feel it through our experience.  After that, we just need to improve it.  That is, the only way to find the know-how for management is to continue efforts and accumulate various experiences in everyday life.

A person who has learned the science and theories of business administration and also acquired the knack of management from experience is as mighty as an “ogre with an iron club.”  The fact is, however, there are not many such people in the real world.  If we can’t have both, it is of course better to acquire the knack of management through real-life experience than learning book knowledge.

As a matter of fact, a person who has not acquired the knack of management but has just learned from textbooks often fails in real management or is even at risk of leading a company to bankruptcy because of his or her wrong management.  There is no shortage of such examples.  One of the most well known examples is that of a famous business scholar who embarked on the actual management of several companies but ended up in bankrupting all of them.

Experience real management and then analyze the experience academically so that you can apply the theories more appropriately.  This is the way to achieve a greater success.  Reversing the order of these two things often leads to failure.

Japanese companies are good at working according to a set of rules. However, it is difficult to learn through trial and error. In a world that demands speed, Japanese companies, especially large companies, are not very good at this trial-and-error process.

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