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PREFACE

The “Smell and Taste” of Japanese Companies

JAPAN IS ONE of the most lucrative consumer and industrial markets in the world. It is also one of the world’s most challenging markets, requiring special knowledge and special talents as well as extraordinary commitment, patience, and persistence.

Japan’s maverick author, consultant, and criticat-large Michihiro Matsumoto says that the best way to understand how Japan’s business world works—and to succeed in it—is to look at each company as a glob of natto (not-toe).

Natto is a traditional Japanese food made from fermented soybean paste. It looks terrible, smells awful, and to the unconditioned foreign palate tastes like a batch of glue gone bad. Until recent times, one of the ways the Japanese used to measure the commitment of foreigners to Japan was by whether or not they could eat natto. The question was not if they liked it, but whether they were able to eat it despite its taste and smell.

Matsumoto describes all Japanese organizations, political, professional, and social as well as economic, as natto organisms, and he makes several points with his pungent analogy:

1. Japanese companies are quintessentially Japanese and are therefore unlike companies in any other country.

2. Japanese companies have a distinctive character and flavor that only the Japanese can fully understand and accept.

3. And, foreigners who have not acquired a “taste” and appreciation for Japanese companies over a long period of time will inevitably find them difficult to deal with.

Until the 1990s, one of the unique characteristics of Japan’s natto companies was that few of them had permanently established, well-defined “doors” for letting in outsiders, whether businesspeople or the public at large. Each organization was more or less a gluey monolith that was difficult or impossible to penetrate using the typical, straightforward Western approach.

A great many of these natto characteristics are still discernible in most Japanese companies, including those with conspicuously Western images, and there has been little if any change. In many large older companies such adjustments are neither visible nor measurable in practical terms.

The examples of such high-profile companies as Nissan and Sony appointing foreign executives as CEOs and chairmen are rare exceptions that shake the still deeply embedded cultural roots of Japan’s business community and government.

Generally, the only partial exceptions to Matsumoto’s metaphorical image are new enterprises—usually smallto medium-size—that were founded by young entrepreneurial mavericks who broke all of the traditional rules. But the larger these entrepreneurial companies grow, the more “typically Japanese” they become.

Given these circumstances, there are still valuable lessons to be learned from the Matsumoto “handbook” on Japanese companies. He says that when an outsider who has no inside connections tries to establish a relationship with a company—in the hope of doing business—he almost never penetrates the outer wall of the castle.

When the outsider makes a cold approach to a company, its walls may “give” a little at the point of pressure, like a mushy balloon, and bulge out somewhere else, but no permanent break is made in the company ramparts.

Matsumoto maintains that the only way businesspeople—foreign or Japanese—can actually get through the protective “shell” of a company is for someone on the inside to pull them in. Again, there are conspicuous exceptions to this rule, but they are still rare.

If an outsider does manage to get inside the walls of a company with a project proposal—via an acceptable introduction with help from someone on the inside—and the company is in fact interested in the project, it proceeds to digest or “Japanize” the project to make it compatible with the whole corporate organism. This homogenizing process is not something that can be done quickly. In fact, it is often the straw that breaks the back of the impatient time and moneyconscious foreign suitor.

Regardless of how far along Japanese companies might be in dispensing with their traditional natto characteristics, there are specific culturally sanctioned protocols for approaching and dealing with them that are as structured as mathematical equations. Generally, one cannot successfully establish contact and develop a business relationship with a Japanese company without following these protocols in the right order and in the right way.

On an individual, personal basis, the traditional attitudes and behavior of the Japanese have changed dramatically from the hidebound cultural patterns of the past to a mind-set that is as open and as pragmatic as that typical of Westerners— particularly among the young.

But in the adult business and professional world when these people interact with other Japanese as members of a group or team, they must conform to the existing culture of whatever organization they belong to—and that culture remains very much “Japanese” in the traditional sense.

This quick guide to doing business in Japan identifies key cultural factors that continue to be the basis for the nature of typical Japanese companies and provides insights and guidelines for approaching and dealing with them successfully.

Boyé Lafayette De Mente

Tokyo, Japan