Overseas Expansion by Japanese Companies

Cross border M&A’s by large Japanese firms have been on the rise over the last 10 years. So too have been overseas expansion efforts by small and medium sized enterprises (SME’s). In fiscal year 2011-2012 474 M&A’s totaling (US$92 billion) was the new record. This activity is of course being driven by the current poor state and worse future prospects of the local economy, and the attractiveness of lower labor and other costs abroad. A more serious driver in recent years is the fact that many of the SME’s have discovered that the large Japanese companies they used to sell to have already moved their operations overseas and are now looking for local suppliers close to their overseas factories.

However, many of these ventures will fail to produce value if they are managed in the same way that the previous (bubble era) round of overseas activity was managed and if the wrong people are selected to lead them. The main cause was a lack of understanding of how to manage globalization: usually as a result of attempting to export Japanese management style to global operations.

Today, the ability to manage diverse workforces is critical to success: Japanese overseas investment is not just in manufacturing anymore. Now, Japanese companies must globalize R&D, logistics and marketing capabilities as well. To do this requires a clear business strategy and a corporate culture that functions across diverse markets. Companies that fail to do this well will end up risking much and losing huge amounts of money and big opportunities.

Reasons for failure:

Historically many Japanese overseas acquisitions have performed badly, producing little or no value and occasionally, huge losses. The reasons for these failures can be grouped into two broad categories: (1) Poor post M&A integration management and (2) A lack of global leadership skills.

One extreme example is Nippon Sheet Glass. They acquired the huge British glass company, Pilkington, in 2006 in an effort to expand overseas. But due to poor planning, poor leadership and a culture clash, two foreign presidents quit in disgust and ultimately, NSG’s revenue dropped 35% by 2011.

 

1.     Poor post M&A integration management[i]

The specific reasons for failed integration management efforts generally fall into four categories:

  • Lack of alignment between Japanese home office and the overseas office
  • Attempting to export Japanese management practices overseas
  • Lack of attention to overseas talent retention
  • Lack of skilled post acquisition management/leadership

In fact the inability to integrate the acquired company into the parent organization and benefit from business synergies often stems from language barriers, culture differences and a lack of mutual trust. As a result, the two companies fail to share knowledge and best practices and gain little or nothing from their union.

 

2. Lack of global leadership skills

In a recent survey of HR professionals and leaders in 2600 Japanese companies only 4% said that the leadership at their firms was of very good or excellent quality, compared to 38% globally[ii]. This tells us that Japanese companies are very aware and very concerned about the quality of their global leadership talent. As we can see from the data collected by the Ministry of Economy, Trade and Industry (see graph below) finding and training global leadership talent is one of the biggest challenges faced by Japanese companies when expanding overseas.

Figure 1: Problems experienced when establishing overseas operations[iii]

 

Another survey, conducted by Jeitosa, shows us a slightly different (global) perspective, but with some agreement in the sense that managing cultural differences and securing global leadership talent are very big issues for any companies seeking to do business globally.

Figure 2: Challenges to Being Global[iv]

 

 

Success Stories

Good examples of overseas expansion do exist: Suzuki Motor’s acquisition of Maruti Udyog, and Takeda’s acquisition of Millenium are good cases to examine. In both cases the acquirers had a very well-defined strategy for post acquisition integration, one that was focused on making the most out of the combined strengths of the two companies.

Collaboration is the key to success in mergers and acquisitions, the leadership of both sides must make efforts to understand their new partners and work hard to find the best way of operating in the new, hybrid culture to discover business synergies, share knowledge and leverage the benefits of diversity. To do this, a clear strategy, strong leadership skills and intercultural sensitivity are the foundation.

Update: The Suzuki-Maruti merger has begun to suffer somewhat due a series of complex labor-related issues. This just reinforces the fact that this type of deal is extremely complex and even the best plans will require effective implementation.

 

Global Leadership Competencies

But what skills are required for a global leader to be successful? More data from the same global survey suggests that the following skillset is ideal for leaders to function successfully overseas.

Figure 3: Global Human Capital Competencies[v]

 

But the question remains: is leadership competence development sufficient to achieve business success? Unfortunately, the answer is “no”. Without organizational support for global leadership competence, isolated efforts to develop global leaders will ultimately fail.

Global Leadership Development

So what can be done to develop leaders who can then guide these Japanese companies to growth and competitive advantage overseas?

Globalinx has been working with Japanese companies to prepare managers for overseas assignments in leadership roles for over 40 years and we have discovered one fact to be true. Simple training programs (leadership, intercultural awareness, communication skills, etc.) alone have not proved to be effective.

All too often graduates of such programs come back to Japan (after short overseas assignments) totally frustrated because although they may have worked very hard to develop their leadership skills, intercultural awareness, and communication skills, they have been unable to apply their knowledge and skills to produce any meaningful results. This is often because too much “organizational friction” has hampered their ability to get things done.  And their overseas colleagues end up being equally frustrated because they see these well-intentioned managers getting tied up in red tape and bureaucratic complexity.

So a more holistic approach is necessary, one that takes into account the knowledge and skills of the individual as well as the organizational environment in which they will operate. Rather than thinking of leadership development as a skill-building activity on an individual level, one has to think of it as developing organizational capability.

 

 


[i] McKinsey and Co; Honda,K; Lostaglio,K; Oka,G: A Yen for global growth, 2012

[ii] Development Dimensions International; Global Leadership Forecast; Boatman, J; Wellins, R; 2011

[iii] METI, グローバル人材育成に関するアンケート調査 [Survey on the development of global human capital], 2010, p. 4.

[iv] 2010-2011 Going Global Report Highlights; Jeitosa Group International.

[v] 2010-2011 Going Global Report Highlights; Jeitosa Group International.

Leveraging Social Media

Leveraging Social Media For Business Development

Many businesses consider social networking tools frivolous and have banned their use in the workplace or have not supported them by limiting access. Many companies still frown on the idea of employees spending any part of the workday on Facebook, YouTube, or Tweeting. However, social networks offer significant benefits to corporations if used properly. They can enrich and enhance business processes, and significantly increase employee productivity. By embracing social networking tools and creating standards, policies, procedures, and security measures, corporations can ensure that these tools are used in a manner consistent with the corporation’s strategy and leveraged as business support and learning tools.

Personal and Business Use Has Benefits

Human beings are social animals; we build communities through family, school, organizations, work, and personal interests. We create networks of people with whom we have personal contact, and we frequently turn to these contacts when we need advice or information. It’s no different in the work environment; when we make personal contact with someone, that association makes it much easier to accomplish a business outcome. It makes sense for businesses to encourage employees to get to know one another, even though they might not encounter these individuals during the course of the typical workday. Providing a forum for employees such as a company-only Facebook page or Twitter page will encourage employees to reach out to one other. They might be networking about work-related interests, or about golf or scheduling a drinking party. Such activity, whether work- related or not, builds relationships and it is our relationships that enable us to find appropriate people and work with them more effectively than if we did not know them at all. Somewhere within that random series of connections lies genuine value to the business, as employees exchange information and make contacts outside their “normal” sphere of work acquaintances.

Business Support Selecting the appropriate social media tool depends on many factors, including corporate culture, business needs, etc. However, there are a few basic functions that organizations need to leverage when using social media: Collaboration: Tools that allow people to meet and share documents, and give presentations, etc. This can include text, video, audio, and other combinations of functions. This can be accomplished through file sharing sites and communication tools, such as Skype, WebEx, or GoToMeeting, etc. Information: Wikis and other types of interactive document storage facilities such as Google Docs and various other file sharing services provide workgroups with secure access to project information and documents. The information is updated by the group’s members making the information fresh and relevant. Communication: Blogging and Tweeting has become a favored way for many people to communicate with friends and colleagues and for executives to communicate with employees. YouTube- style videos and Webinars can be used to share information and train dispersed teams and workforces.Access to expertise: Linkedin and Facebook-style platforms allow (and encourage) employees to post information about themselves, their experience, and their skills. Because these are highly interactive, content can be pushed to people who have indicated specific interests.

Philip Deane, Globalinx President

The Growing Importance of Communication Skills in the Workplace.

Hello everyone,

 

It has been a year now since I started working at Globalinx Corp. In the seminars that I have facilitated, I have realized a trend that the majority of the participants who have attended still need improvement with their soft communication skills in order to be successful in global business. The soft skills I am referring to are verbal skills, self-confidence, eye contact, listening ability, vocabulary, etc.

 

Today, employers need managers with the critical soft skills. These skills are important for effective performance across all job categories. These soft skills have come to be an even more crucial role in management positions in today’s environment.

 

In the last few years, surveys were conducted in various parts of Japanese Business. Employers have been asked what skills they want to see in their employees. Time after time the results remain consistent. The soft skills are in demand. Unfortunately, these are the skills that are in short supply today. Topping the list for most Japanese businesses are skills such as communication skills, team player skills, problem solving and critical thinking.

 

Communication Skills

 

Communicating ideas in the workplace is different than in an academic setting.  In a classroom, the instructor usually leads group discussions or assigns written homework, and students respond or ask questions when directed to do so.  In the workplace, however, the format for interaction varies.  Sometimes your supervisors may specifically ask you for your opinion or ask you to express that opinion in writing.  More often than not, however, they assume that if they need to know something, you will bring it to their attention.  The challenge of communicating in the workplace is learning how and when to share your ideas or concerns.

 

Listening is also an important communication skill.  Employers report that the average entry-level candidate struggles with knowing how to listen carefully.  They may not immediately process essential instructions or be able to understand how their tasks relate to the overall goals of the organization.  One way to improve your listening comprehension skills is to ask questions.  Other tactics include restating or paraphrasing what you thought you heard to confirm you understood correctly, and taking notes.

Teamwork

Successful businesses rely on team players. Understanding how to act as a member of a team may begin when you play sports or work on group projects in school.  In the workplace, knowing how and when to lead and follow takes practice, as does knowing how to avoid unnecessary conflict.  Working on a team also allows you to build closer relationships with your co-workers, which can make any job more fun and interesting.  When working on a team, make sure that the workload is shared and that everyone is communicating.  While some competition between team members is healthy and contributes to productivity, too much negative personal interaction can have the opposite effect.

Problem Solving and Critical Thinking

Companies have learned they can no longer conduct business exactly the way it was conducted ten years ago. Today’s changing environment requires companies to adapt to the current world. This means employing people who “think outside the box” that will help outline the vision for tomorrow’s organizations.

Creative problem solving and an ability to identify opportunities are critical in this dynamic environment. Employees who can “think outside the box” and present new solutions to the old problems will be highly valued.

While many employers feel they can train employees in the technical skills needed to perform the job, there is more concern with the ability to teach the softer skills. Employees of the twenty-first century must be committed to the soft skills. This commitment doesn’t begin the first day on the job. This is a commitment that starts even prior to entry in theworkforce and stems from the dedication to become a lifelong learner — constantly updating and revising skills to better meet the needs of the changing marketplace.

For all these reasons, I believe communication is crucial and vital to business. Specialized business knowledge is important, but not enough to guarantee success.

Thank you very much; I look forward working with all of you again next year.

Happy Holidays,

Joe Hull

Training and Development Specialist

Globalinx Corp

The Benefits of Active Listening

Active Listening

I spent long hours learning to read and write and even had classroom training in public speaking, however I never had a lesson in listening or thought of listening as a learnable skill until I entered the world of business as an adult. As many trainers, including myself, have come to understand, listening is a learnable skill. Unfortunately, it is not typically taught with other communication skills at home or in school. In the seminars that I have facilitated I have noticed many of the participants experience difficulty conveying their thoughts and desires to others, asking appropriate questions, and trouble voicing their opinions. One of the keys to getting along with others is to have highly developed communication skills. When it comes to great speakers versus good listeners, only 18% of the population would prefer to speak to a great speaker. The other 82% prefers to speak to a good listener. So, the best way to get along with others is to listen to what they have to say. By ‘listen’ I mean what is called ‘active listening.’ Active listening means you are fully engaged, not distracted. You carefully weigh the communication and ask for clarification where necessary and encourage the person you’re with to speak freely and express interest in what is being said.

The Many Benefits of Active Listening Include:

1. It builds stronger relationships. (Trust and respect)
2. It makes it easier to resolve problems.
3. It creates a safe environment to collaborate in problem solving.

Active listening is an essential skill as it enables the listener to receive and accurately interpret the speaker’s message, and then being able to provide an appropriate response.

Here’s an example from my experience being in Japan. I have lived in Japan for seven years and am married to a Japanese citizen. My wife is from Tokyo and speaks standard (Tokyo) Japanese when she is with me. When I met her father for the first time, I couldn’t understand a word he said because his dialect (Sendai prefecture) was completely foreign to me. Yet, after a thirty minute conversation, my father-in-law was surprised at my ability to understand every word he said. How did this miracle take place?

Well, although I didn’t understand the words he spoke, his body language and tonality revealed his feelings, which quickly changed with each story he told me. So all I did was remain in sync with his feelings by interjecting generic phrases to show I understood. At the appropriate time, I threw in expressions such as, “oh, I see. Really? I understand how you feel. That’s surprising. Oh, that’s interesting.”

Some Barriers to Active Listening Include:

1. Anticipating what is going to be said instead of being open to what is being said.
2. Paying too much attention to what is being said, rather, than how it is said.
3. Seeking confirmation of your preconceived ideas, rather than new information.

The Response


Another principle of communication is the response you get. It is not the words we use, however the response we receive that determines whether our communication is successful. After my first conversation with my father-in-law, as soon as we left he informed all family members and friends about my excellent fluency, making me a welcomed guest everywhere. The response I received made my communication successful. The response is an integral part of the listening process and can be critical to the success of a negotiation or business meetings.

Tips on Improving Your Active Listening Skills Include:

1. Ask questions
2. Encourage elaboration
3. Listen empathetically
4. Give feedback to check your understanding
5. Be accepting and nonjudgmental
6. Pay attention. Don’t let your mind wander
7. Maintain eye contact
8. Don’t jump to conclusions
9. Remain open-minded
10. Don’t finish your counterpart’s sentence.
11. Check your understanding by paraphrasing and summarizing what you think was said.

Think of people as closed treasure chests. It is only by openly engaging with them that they open up. The ability to listen with empathy may be the most important attribute of people who succeed in gaining the trust and cooperation of others.

Joseph Hull, MBA, PMP

Global Readiness

Situation

Globalization is possibly the hottest word in business today. And yet, does anyone really know what is involved in going global? And if your company has decided to be- come a global player, do you really have what it takes to compete on the global stage?

The answer is probably “NO.” In fact, most mid-sized companies are completely unprepared to pursue a globalization strategy. Global readiness is not just about having the right products, services, or go-to-market plan. You also need to think about your organi- zation’s ability to simultaneously support existing and new market organizations without burdening either with costly or unresponsive operations or procedures.

Complications

While the opportunities presented by a global expansion are potentially huge, so are the risks and barriers. Some of these include:

• The company’s firm specific advantages and core competencies may not be transferable to the target market

• Economic, political and regulatory risk can wipe out profits overnight

• Cost advantages in labor, raw materials, capital, etc. are usually short lived as competitors quickly catch up, and can be outweighed by increased coordination costs

• Globalization plans are often poorly considered, commu- nicated, misunderstood, and sometimes sabotaged by internal resistance

• Inability to collaborate with foreign counterparts limits innova- tion and consumes profit and time

Solution

For globalization to proceed with minimum risk and maximum return the strategy needs to be resilient and to be a realistic fit to the organization expected to deliver on it. Strategic Alignment: What we do begins with assessing the firm’s globalization strategy from the top down to identify risks and make recommendations.

Once the strategy is strong, we then work with the organization to ensure that it is ready to deliver on the plan. This includes defining the new global competency re- quirements, assessing the current competency level of the depart- ment or business unit, design of the new organization, aligning and re-designing the hiring and selection, learning and develop- ment, performance management, and compensation strategies to support the global strategy. The result is an organization that is more performance oriented, that rewards risk taking and entrepre- neurialism, and that feels account- able for producing sustainable business results.

About the Author: Mark Beresford is Principal and Senior Consultant at Globalinx CORP. Tokyo.

Time Management

Fast-Paced Changing World

Technology is changing, the workplace is changing, competition is changing, customer demand is changing, products and services are changing, international relations are changing, and government regulations are changing. Are you changing? Is your work- force changing? How can you cope with the enormous amount of change taking place in your world and still do your work?

The answer is good time management. Time management is a skill that you can develop to help you maximize your efficiency, allowing you to complete all the needed tasks to be finished within the day and still having some spare time to relax and unwind with your family or friends.

Here are a couple of time management tips from our seminar that will help you maximize your hours of work in the office. Have a To-Do List: Instead of merely just starting with the load of paperwork that is waiting for you on your office desk, take a moment to create a to-do list, which includes all the tasks that you need to finish for today. When making your to-do list, make it a point to prioritize those tasks that would require the most amount of concentra- tion, focus and resources to be accomplished. The least priority should be given to tasks that you consider to be routine and non- challenging. Know Your Highs and Lows: When is your energy level at its highest and lowest? As a rule of thumb, work on complex tasks during those periods when your energy levels are high since this would allow you to focus and con- centrate on these tasks. Set the routine and non-challenging tasks during the times of the day that you feel your energy levels are low. If you want to be more productive and get more done in less time, then become more conscious of your time management skills and learn how to make better use of your time.

Joseph Hull, MBA, PMP

Searching for Balance in a Fast-Paced Changing World

echnology is changing, the workplace is changing, competition is changing, customer demand is changing, products and services are changing, international rela­tions are changing, and govern­ment regulations are changing. Are you changing? Is your work­force changing? How can you cope with the enormous amount of change taking place in your world and still do your work?

The answer is good time manage­ment. Time management is a skill that you can develop to help you maximize your efficiency, allowing you to complete all the needed tasks to be finished within the day and still having some spare time to relax and unwind with your family or friends.

Here are a couple of time manage­ment tips from our seminar that will help you maximize your hours of work in the office.

Have a To-Do List:

Instead of merely just starting with the load of paperwork that is waiting for you on your office desk, take a moment to create a to-do list, which includes all the tasks that you need to finish for today. When making your to-do list, make it a point to prioritize those tasks that would require the most amount of concentra­tion, focus and resources to be accomplished. The least priority should be given to tasks that you consider to be routine and non-challenging.

Know Your Highs and Lows:

When is your energy level at its highest and lowest? As a rule of thumb, work on complex tasks during those periods when your energy levels are high since this would allow you to focus and con­centrate on these tasks. Set the routine and non-challenging tasks during the times of the day that you feel your energy levels are low.

If you want to be more productive and get more done in less time, then become more conscious of your time management skills and learn how to make better use of your time.

Please contact us if you or your employees need help managing time or stress.

Case Study: Mentoring Program

Client Overview

This client is one of the largest design and construction companies in Japan, with ongoing projects in many regions around the world.

Project Overview

This client recruited a group of young, foreign construction engineers and project managers as part of their strategic plan to strengthen their position in foreign markets, and manage overseas projects more effectively. They recognized that the project management methods used in the local market and overseas had significant differences: these new recruits were to become a kind of bridge between the two sides.

It was decided to have the senior local staff train the new recruits in the ways of working employed at the head office so that when this group was mobilized overseas they could more easily interface with head office and eliminate confusion, mistakes and expensive rework.

Globalinx’ Role

Globalinx provided a team of training consultants who worked both on site and virtually on this one-year project. The project included the following work:

Needs Analysis: This included the following areas:

•Training objectives and experience

•Culture and communication styles

•Mentor selection and assessment

•Mentee readiness assessment and preparation

Train the participants: Globalinx designed pre-mentoring workshops to train both mentors and mentees and thereby prepare them for entering into a productive mentoring relationship.

Tracking tools: Globalinx supplied templates, worksheets, checklists, and guidelines to make progress easy to track and evaluate.

Monitor and control: Globalinx provided ongoing monitoring and support of the mentoring program by supplying a Mentor Program Manager (MPM).

Lessons learned: The program was evaluated against the original objectives and the lessons learned were documented for future projects.

Results

The participants reported high levels of satisfaction with the program and the new recruits are now performing well in their new roles.

A main reason for the success of the project was the inclusion of the consultants from the beginning. This level of involvement allowed the consultants to set up the program based on best practices and to establish clear standards of performance both for the mentors and the mentees. As a result, the mentees were able to understand their learning objectives and

Communication skills training for the masses

Recently, we were asked by a large Japanese company if we could provide business communication skills training for around 800 employees.

The main requirements were:

-Time – As quickly as possible – Completed in twelve months program

-Cost – As cheap as possible – 25,000 yen budget per employee for each skill developed

-Impact – As effective as possible

-Measurable – significant and clearly measurable improvement in each skill area

-Quality – As high as possible

-All – every students should receive

a consistent high level of training These criteria presented us with some  unique challenges, especially considering the variation in language and communication ability of the target employees.

Several years ago, Globalinx developed a new software program using the Microsoft Windows platform, to provide pre and post support for students participating in our business communication skills seminars. The program proved to be very successful, not only helping students to effectively prepare for the seminar but also enabling them to effectively apply the skills and techniques they learned and continue to improve and develop their communication skills.

However, the program itself was not enough to meet our client’s needs. So we set about developing the programs by creating a clear self-directed learning path complete with forms and templates, and incorporated online instructor support to evaluate the student’s work and provide real-time guidance to help each student achieve a significant and measurable improvement.

The result is that new program can be completed by all target employees with  12 months. The program is basically a cost effective self-directed program using the Windows software program with support and evaluation from professional business communication skill instructors. All employees are  using the same program, which by the way is bilingual (Japanese & English), this means that we could provide the same high impact, high quality program to all employees and maintain a high quality of consistent training.

Communication skills training for the masses – Joseph Hull

Training dispersed workforces

To meet the training and development needs of a globally dispersed workforce, HR and training managers must start to consider implementing webbased learning programs that will save money and increase the breadth of organizational learning. A globally dispersed workforce needs a combination of formal and informal learning with an emphasis on collaboration,
knowledge sharing and coaching.
Solution
Due to the rapid development of web-based learning and meeting software, high quality training solutions can now be provided to a globally dispersed workforce at relatively low cost. These technologies enable companies to conduct a wide range of live events ranging from informal discussion and knowledge sharing meetings to elaborate virtual classroom training
sessions (Webinars) attended by participants from all over the world.
These technologies can be implemented relatively quickly and provide secure, high-impact multi-media training sessions that can be recorded and archived for future access from
any geographical location. They are primarily designed to meet the needs of global businesses clamoring for convenient, secure and cost-effective alternatives to in-person gatherings. However, another key driver is the increased emphasis on “informal” learning, which comprises most of the corporate knowledge transfer within many organizations.
For example, one of our clients needed to provide company administration training to over 2000 multinational overseas staff located in 20 different countries.
Using web-based learning and meeting software, we were able to propose a relatively low cost solution saving the client thousands of dollars whilst increasing the effectiveness and
quality of the training.
New learning models will feature short and tightly focused instruction sessions (Webinars) delivered to globally dispersed individuals or groups that need it at precisely the right times.
Results are measured not by the number of courses delivered and employee satisfaction levels, but by the achievement of key performance benchmarks and bottom line impact. It is nothing less than a paradigm shift from training to performance, made possible largely by advances in web-based learning and meeting software.

Globalinx Corp