Idea 25 - Japanese management
When
Richard Pascale and Anthony Athos wrote The Art of Japanese Management, they observed
that America's managerial skills were being challenged on three fronts. The
first was managerial practice, where doing more of what they already did well
was yielding less. The second was a shift in social values that meant people
were expecting different things from organizations and from work. And the
third? 'The competition is killing us.'
That was the point. The year was 1981. Japan's gross
national product was the third highest in the world and on track to be the
highest inside the next 20 years. Japan is a tiny country, very mountainous,
70% uninhabitable, with the remainder the size of Cuba. Yet with almost no
natural resources, it was growing and investing at twice rate of the US. It had
overtaken previous international leaders in one industry after another: Germany
in cameras, Switzerland (who would have believed it?) in watches, the UK in
motorcycles, and the US in consumer electronics, steel and a multitude of other
products including the zip. 'Japan', Pascale and Athos were obliged to note,
'is doing more than a little right.'
Though far from the only one, the book was an attempt to
nail down just what that was. The easiest differences to spot were in
manufacturing itself, where Japanese companies had studied the American model,
learnt at the knees of American quality gurus (prophets without honor in their
own land), and adapted and improved it until they had developed their own
distinct production model. They still leave the rest of the world standing in
terms of speed of design and production. Their methods found their way to the
West during the 1980s, either whole or in part, as total quality management Six
Sigma and lean manufacturing. Outside their natural habitat, these have enjoyed
variable rates of success and survival. Where they have failed, it has been
largely because the package that companies bought lacked two key items - the
style of Japanese management and the Japanese individual's attitude to the
organization.
Confrontation,
no Small as Japan is, it is stuffed with 127 million people who,
over the last two millennia, have had to cultivate an ethos of wa - harmony -
simply not to tear each other apart. So direct confrontation is not socially
acceptable. For historical reasons, Western society relies on different
institutions - church, state, the world of work- to satisfy different needs.
Japanese history has produced a society that tends to look to the organization
to satisfy the whole of its needs. It's well- known that large Japanese firms
provide jobs for life, though this is fraying slight! Y at the edges after the
'lost decade' of economic troubles. Even so, they still spend considerably more
than Westerners on company benefits like health and recreation facilities.
Managers, who all spend a mandatory year or two on the factory floor, identify
with subordinates and feel responsibility for their overall well-being. Workers
bring to their jobs not only hands and muscles, but intelligence, attitudes and
feelings. They are asked to contribute ideas, analyze problems and recommend
solutions, and are trained so that they have the means to do so.
Western companies are catching up in this department, but
the differences don't stop there. In Europe and the US, the command-and-control
management style may have become more touchy-feely but it hasn't actually
disappeared in many companies. Tellingly, there is no Japanese equivalent for
decision-making, and leadership, they say, is like air- necessary but
invisible. Decisions traditionally start in the middle and flow upwards,
gathering consensus along the way so that when they reach top management,
approval is mostly all that's required. That takes time, but it does mean all
are sincerely committed to a particular course of action. No subtle sabotage
here. Implementation reveals other differences. If a Western company decided on
an unpalatable course of action, like merging two departments, it would
probably start with an announcement - and then the grumbling would begin. A
Japanese manager would suggest a small change in workflow, then another and, if
there was an announcement, it would merely confirm what had already happened.
Gradual change is always preferred to direct assault. This thinking is
reflected in top management's attitude to strategy itself. Although its
five-year strategic plan is no longer much in use, Western strategy retains a
sense of commitment to a grand design. The Japanese plan ahead and have a
vision, but dislike being wedded to a single strategy, lest it blind them to
changing circumstance. They prefer meikiki, or 'foresight with discernment'.
Learning
from America Most shocking of all to Western capitalists is the
relative indifference to the bottom line - in Japan, people and the society
that the organization represents are more important. Now, an extended economic slump
and the clamoring of foreign investors has persuaded some companies to rethink
their attitudes. A number of them have speeded up decision- making processes to
make themselves more flexible, and begun hiring more part-time and temporary
workers, a cutting costs though, as you would expect, by enlisting the help of
the workforce rather than by whittling it down. Japanese critics have urged
Japanese companies to learn from America and, instead of books on the Japanese
miracle, we now have books on the Silicon Valley miracle. There is nothing much
about Californian strategies that the Japanese don't already know, however, and
the lessons being offered on 'shareholder value' may be unpalatable.
Recent economic stagnation has been the fault of Japan's
financial practices and structures, not of its industrial management practices.
Firms need more flexibility to get the most out of today's runaway markets and
they could certainly spruce up their handling of non-Japanese employees as they
move further abroad. But in their familiar segments of cars, optics, consumer
electronics, machine tools, they remain formidable competitors. When Toyota
lifts General Motors' crown as the biggest car maker in the world, as it is
about to, it will be a forceful reminder of that fact.
Reference: 50 Management Ideas You Really Need to Know
Book by Edward Russell-Walling
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