So you have decided to take the plunge and enter the Japanese market, or your Japan business is up and running and you are ready to ramp up growth. Deciding on who will lead these two very different types of challenges is crucial to success in the Japanese market. The types of leadership and the skill sets that will be required can differ greatly and will differ from those required in your home market.
Japan is the third largest economy in the world, and arguably the most developed and competitive due to the prevalence of large corporates and the underlying structure. It is also arguably one of the most challenging in terms of both unseen barriers and a famously tight labor market. While growth rates are lower than the first and second largest economies, Japan has virtually no extreme swings or volatility. In times of uncertainty, the Japanese market can be a source of stability, yet also one with tremendous growth potential by employing the appropriate strategies.
Whether you are launching or trying to grow the business, the appropriate strategies need to come from a leader who has the relevant skill set and experience. These are rarely the same set of skills, experience, or knowledge. Japan is a “high context” country, meaning trust relationships are of utmost importance. Having someone who can recognize, build, and maintain the important trust relationships that your business needs to succeed is arguably the most important attribute of a leader in Japan. Carving out your piece of the Japanese market requires a careful choice of the right leader at the right time, and moreover, the mindset and ability to pivot-both leadership and business model.
Entering the Japanese market and launching a new business can seem daunting, from one perspective, and look easy from another perspective. The reality is somewhere in between and knowing how to start is the key. From both perspectives, choosing the right launch leadership is one of the most important decisions a company can make when starting up in Japan. The views at HQ can range from “we have to have a Japanese native because after all this is Japan” to “let’s get a sales agent on the ground and start selling first.” There are of course all the variations of these views, but the most important questions to ask are, “what kind of skill set does a launch leader actually need?” and “do we have a Japan market ready leader already in the company-someone with Japan specific cultural intelligence?” The Japanese market has very distinctive characteristics and is like no other market. Choosing the right launch leadership can make or break a Japan business launch.
After the Japanese business has launched, it is imperative to take a rational look at how things are going at strategic points in its growth. The best launch leader may be perfect to take you to 5, 10 or 20 people. That person may be a great founder type. But it happens so very often that the launch or founding leader is not the same person to take the business to the next level. A growth leader will be experienced in pulling together the many moving parts of a new business and ramping up growth. Particularly in Japan, the first year or so may be indeed focused on getting relationships in place, handling relevant regulatory filings, hiring some key people, and establishing the presence. At some point, you need a leader who can capitalize on the foundations and “take charge” to expand. An experienced Japan based culturally intelligent leader can often help HQ to see opportunities that are distinct to the Japan market. There are so many ways that Japan looks like another western country on the surface, but underneath is a very different story. A talented growth leader can help HQ see through the veil to identify new opportunities.
The Flexibility of Strategic Leadership
It is helpful to use these four types of strategic leadership to organize thoughts about how to deal with or approach the Japanese market. In that context, there will be many situational permutations of each cadre. The beauty of strategic leadership is its flexibility.
A particularly appealing aspect is that these strategic roles can be non-exclusive and for a specific term, such as one year. Moreover, they can be structured to suit the needs of the Japan business. This is particularly attractive to SMEs who cannot afford and do not need a full time C-level, such as a CFO or CMO, but desire to have that kind of deep expertise. Many new and growing businesses would benefit greatly by having a C-level executive for only two or three days a week over a specified period. Additionally, these non-exclusive and potentially non-full time engagements allow you to access a much wider pool of experienced executives with deep Japan experience.
The Japanese market has unique challenges that require very Japan-specific strategies. It is an extremely tight labor market that has limited liquidity due to the continued aversion to job hopping in the market. Therefore your leadership choices need to be considered with an open mind. Any firm looking to enter and succeed in Japan would do well to think outside the box and work closely with Japan based market experts to assess how to launch or how to ramp up growth. There is a vast experienced pool of talent that goes unnoticed because they may be outside the traditional employment ecosystem. But these are the people who have the kind of experience or entrepreneurial talent that you need to grow and succeed in Japan.