Toyota Problems; Are They Unique to Toyota?

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Recalls of Toyota cars spread and accelerated its speed in late January.  This is such a regretfully serious problem not only for Toyota but Japan as a nation because the corporate ‘Toyota’  is an iconic company which represents Japanese technology and quality of manufacturing, a company which represents Japan to the world and is deeply trusted by the world.

To be frank with you, I would rather refrain from commenting further on the Toyota problems since I have brought them up in my web-site twice already (Ref.1).  I think the problem is deeply rooted and can be identified in any Japanese mega corporate; and in their background you will find characteristics such as ‘Tate Shakai (Hierarchical Society)’, ‘Male chauvinistic society’, ‘Seniority-based promotions’, ‘Difficulty in sliding sideways (difficulty in changing job)’, ‘Permanent employment and big severance package’, or ‘Monozukuri shinko (Faith in manufacturing)’ ? elements which reflect traditional Japanese ‘Common Sense’.

The Economist magazine points this out in its most recent issue （Ref.1） .  It is the same as what I repeatedly point out ? the wrong responses of Japan (which are commonly seen in many cases) to this flattening global society.

Not only Toyota but many other big companies embrace the same problems which you see as illustrated in this Economist article.

I urge people in business sector to buckle up, too.  Political leadership faces big issues, but business sector clearly needs a drastic reform as well.  It might be a beginning of 'The Third Lost Decade', I fear.  I don’t think we have much time left for CHANGE.

Toyota’s Problems and Sufferings: Eyes to See From Outside, Hearts to Sense Outside

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Although Toyota announced the recall of a huge number of its cars, problems are still likely to continue for a while.  The news coverage has been pretty in U.S. including the news of President Toyoda’s possible visit to the U.S. very soon.  Toyota hearings expected at the U.S. Congress, responses of the US legislators, reports and articles,…… there are plenty of overseas media coverage open to public in this internet age ? news coverage in Japan are not the only source of information to us.  All you have to do is just ‘Google’ Toyota.  It is important to follow news from various aspects.  Especially, in this case, it is about the leading company of Japan and the problems were identified mainly at overseas, mainly US, the largest market of Toyota.  Relying only on Japanese media will be misleading.  Quite many good source of information is available via internet, the media of web age, including internet newspapers and magazines.

I would say that the newspaper most read by business persons of the world is Financial Times  (circulation of 420 thousands is pretty modest compared to that of major Japanese newspapers, but its impact to the world is incomparably huge compared to Japanese newspapers), and a weekly magazine most read by business persons of the world is The Economist. What do you think?  Articles in Financial Times and The Economist report news of the wide world, they do not particularly take U.S. side, is often critical to U.K, too, the reports they write are high quality, and their views are well balanced as well as objective.  These characters are what you might call ‘the British style’, but I feel that many articles are indeed the ‘works of professionals’, i.e. they grasp good timing, and has very good focus.  Personally I am a fan of these two and have them in my ‘Kindle’.

For Japanese readers who do not read much English, I recommend ‘JBPress’ , an On-line Press.  I read ‘Toyota Slips Up’ and ‘Toyota　Losing Its Shine’  in The Economist 2009 December 10 issue and was a bit concerned when I found President Akio Toyoda’s comment saying that he thought ‘Toyota is already at a dangerous point’ after he read ‘How the Mighty Falls’ by Jim Collins.  A large part of these articles in The Economist is available in Japanese at JBPress.

The Financial Times also has some coverage on Toyota issue recently, and some of them are translated into Japanese, again at JBPress.  (These articles include ‘Toyota By Itself Invited The Fall Of Its Reputation’ , ‘Staggering Sons Of Toyota’, ‘Toyota Messes Up With Customer Service, Its Damage Control Is Not Working’, ‘Safety Crises Threatens Toyota; The Price It Has To Pay For Going Too Far in Spreading Its Market Share’ ）  I feel that these two newspaper and magazine are musts for business persons.

What happened to Toyota ? a company known for its technological excellence?  Mr. Reizen who is sending out messages from U.S. gives us good insights into the brake and accelerator of electric car.  (this web-site is run by Mr. Ryu Murakami).  His information made several things clear to me.  In this new system of electric control, the mechanism of brakes and accelerators are very different from traditional ones.  However, this is no excuse to end users, i.e. the drivers.  Brakes and accelerators are particularly important components for drivers, and if anything goes wrong with them, it may directly cause accidents which will risk the lives of drivers or other persons in the car, or people involved in the accident. Automobile makers are responsible for being strategically prepared to provide cutting edge technologies, create market value of their products, and build good customer satisfaction/social relations.

In other words, the point is whether you are capable of telling customer-oriented ‘stories’ of cars, of driving.  It’s not just about developing great technologies.  Securing good control of parts that directly connect to safety of human life must be a top priority.

The press meeting of Toyota was, as I have written in my previous column, a big problem.  What kind of attitude/meeting is good to the eyes of the public?  To answer this question, a team of professionals is critically needed.  All Toyota members, I expect a lot from you.  Please keep on working hard.

Closer Ties Between India and South Korea

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I have strongly appealed (Ref.1), more than few times, Japan’s low presence in India, a country with 1 billion people with expected economic growth for decades to come.

As you see in my recent series of five blog postings on a victory by the South Korean team on the bid of nuclear energy plants of the United Arab Emirates (UAE), South Korean business sector has been very aggressive in ‘Go Global’, eg, Samsung, LG, Hyundai and many others.

Another big surprise (Ref.1) of the last few days was press coverage that Indian government honored South Korean President, Lee Myung-bak as the chief guest of the Republic Day of India, January 26th, perhaps one of two major days of India (another one is August 15th, Independence Day from British Colonization); it is apparently the first time head of state of Asia received this honor. President Nicolas Sarkozy of France received this honor- though Indians were not happy with his being with his new girl friend.

What I was a bit worried in my blog posting part 2 of Korean victory in UAE, Japan has not been, in my view, aggressive enough to pursue our various missions to the world partners with strategic vision.

A press of January 20th, explained why India is keen to further its relation with Korea. Of course, nuclear technology is one of them.

A series of aggressive global campaign of President Lee is to show the world his nation particularly at this time, hosting later this year G20.  Is there any attempt by the Japanese government to show its leadership in various global stages, for example, World Economic Forum in this month, G8 Summit in June, and its presence in hosting APEC in November this year?

I wish you try to learn lessons what is going on in the world with your eyes wide open trying to develop ‘Vision’ and Strategy toward Vision.

Still a Long Way to Go for Women

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In my previous posting, I commented on ‘fear or prejudice against women’ in Japanese companies seen in the event of globalization.  However, such feelings against woman empowerment are shared largely in Japan as I have often pointed out in this web-site.  Please search within this site for keywords such as ‘women’, ‘men and women’, ‘gender empowerment’, etc.

One reason for this is that men, especially those in higher rank of social ladder, oppose mentally to changes of a men-centered chauvinistic social structure.  Don’t they have enough confidence in themselves for being compared to women?

However, it is a fact that more than 50% of the economy and buying power belong to women. Besides, given the fact that Japan’s population is shrinking, we cannot miss the opportunity of inviting women’s participation and their power in society just as we do with senior people’s power.  From my point of view it is just prejudice to say that doing so will turn the country to ordinary ‘domestic oriented’ thinking where economic and business growth will be hindered.

Kathy Matsui proposes on‘Womanomics’  a detailed  analysis of relations between women participation in the workforce and economic growth.  The most important element is change in social structure, i.e. social innovation, conducive to gender empower..

I would also like to point out that basically men and women have different views and values.  With more women in the workforce, what would this world be like?  Certainly it would change to a different society compared to historical men-centered one.  Like it or not, this is a world trend and it is not only bad as some of you may think otherwise.  Many good examples are also known.

In global enterprises, outstanding female CEOs are increasing;K. Nooyi of Pepsi is one example. At Xerox Ms Mulcahy who led a major change retired as chairman, and the succeeding CEO is again female; Ms U Burns. And Avon and so on.  These companies all appear to be in good shape.  Female participation in social workforce is expected to expand in Middle East as well.

By the way, in relation to my recent 4 postings on the victory of Korea in the bidding of nuclear power plants in Abu Dhabi, Ann Leuvergeon (Ref.1), the CEO of Areva, a French company which was the strongest candidate, is also woman. 

In Japan, although the number of female senators have increased after the recent election of the House of Representatives – that ended in the victory of Democratic Party of Japan -  its proportion is still less then 15% of the whole.

Japan, a country of ‘soshokukei danshi’ or "herbivorous men" and ‘nikushokukei joshi’ or "carnivorous women" with high ability who are being hindered from working actively….  I wonder where this country is headed to…

Nomura Securities and Lehman: Eyes to See Japan from ‘Outside’, Senses to Feel ‘Self’

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Since the ‘Lehman shock’ of September, 2008 (though this is now a hackneyed phrase), the world economy is struggling.  How terrible the ‘Greed of Elites’ flocking at the Wall Street could have done to the global world, but now, I think positively of the movements of past one year in which people started to discuss the essence of ‘Capitalism’.

It was around this timing, I trust that you all remember, that the news of Nomura Securities having succeeded in buying the Asia & European division of Lehman was reported.  The media basically said that Nomura made a daring move and it was a good decision for Nomura in the context of expanding its business to the world.  I agree.

However, a question that quickly came in my mind was how well Nomura could handle its new ‘non-Japanese employees’?.  Do the managements of Nomura have such expertise and ability?  Financial market is a bit different from manufacturing industries and this has to be taken into account, too.  In financial sector, your value rests mainly on brain-power and judgements, and your ‘pay’ is determined principally based on this kind of overall performance.

Here is an article that made me convinced that I was right.  A piece from last Summer’s ‘Wall Street Journal’ .

I was of course concerned about how Nomura will cope with the difference of staff management and compensation, but what is described in this article in addition, is nothing but gender discrimination.  I suspect that Japanese do not see anything ‘wrong’ in things like these ? many people would say that such policy is a part of standards in Japanese companies…, or judging from how western media reported this, if the media treat Nomura like this, then Japanese banks are more conservative, not to mention mega-companies.  ‘You call yourself a ‘global enterprise’, but in reality… far from it….’  I would say that this is Japan as seen from ‘outside’.

Such tiny things of daily actions in the management, each one so small that you might think of them as problems within the company norm, is in reality something that can become a big problem of credibility of the enterprise.  When these questions on the credibility of the enterprise spread, it will eventually lead to the decline of the power of nation.  It is a serious problem.

Do you dislike global world, then?  Do you want to close our country, then?  Do you really believe that you can do such things?  Don’t you care that our lifelines; energy, food… depend largely on import from overseas?  Are you suggesting Japan to be a ‘closed nation, Sakoku’?

Korea wins the Nuclear power plant bid at United Arab Emirates – Part4

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This January I have posted series of 3 reports on this theme.  I write this because I believe that there are many lessons to be learned from this news, its background, and in thinking how Japan should promote ‘clean energy’ – the growing industry of the future.

In my 4th report, I introduced information/reports on what requirements the UAE proposed　, and what were the points where the proposal from Korea’s was highly evaluated. They are taken from open sources, but I think you will find them informative and useful.  Don’t try to get away by saying ‘We knew it’ or ‘They are just beautiful words’, because that would make you a whining loser.  Such attitude will only lead to another defeat.

Please take time to read through carefully through these interesting materials.

A mind to learn humbly, learning from defeat, to ‘Katte Kabuto no O-wo Shimeyo (tie up the strings of your helmet after victory)’, is the universal wisdom and important attitude.  What message do you see from these materials? What lessons do you learn from this and/or my previous 3 reports?  How do you react to any request, gather information and proper connections?  Equally important is to make effort in filling the gap between our view and theirs.  This can be said about other cases too – not only the UAE.

At any rate, the renewal of oil contract with UAE (50% of UAE oil export is to Japan and 25% of the oil import into Japan is from the UAE ? a very important relationship!!) is expected in 2012, and as competition for energy is becoming ever severe, our rivals must be making smart moves already. As the saying goes, ‘Yudan taiteki’ (“you can't be careless or inattentive but be alert, be observant”) and ‘Ogoru Heike wa hisashikarazu ("the moral import of the tragedy and of the swift and extreme vicissitudes of fortune").  I urge all of you in government, ministries and  business  to prepare yourself and work hard for the good of the Japanese people. Buckle Up.

Korea wins the Nuclear power plant bid at United Arab Emirates – Part3

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As a follow up of my report on the victory of Korea which I have been writing about in a series of Part 1 and Part 2, below are some interesting reactions of Korea, France and other countries

By the way, the person in charge of this project in Abu Dhabi referred to in my previous column (Part 2) is ‘Prince Mohammad’, correctly ‘The Crown Prince Mohammad’.  I have had the honor of seeing him twice in person sometime ago and just by listening to him I could clearly see his wisdom and intelligence.  This Crown Prince Mohammad is the person who is mentioned as the ‘top management’ in the comment #1 which I have quoted in my report Part 2.

As always,The Economist or Chuo Nippo of Korea (Japanese site) provide us with some movements.  How shocking it was for the French, the top of the world, is described in the report of ‘France 24’ titled ‘UAE nuclear deal: a French flop?’.  France has already started planning the next strategy  based on the analysis of this defeat.

Chosen Nippo continues to send us vivid reports and follow ups.  Here are some titles of the articles which I have quoted from the site.  I think Japan can learn much from this kind of information

●Exporting nuclear power: Reversal after reversal, behind the scene of negotiation (Part 1); in Japanese
●Exporting nuclear power: Reversal after reversal, behind the scene of negotiation (Part 2); in Japanese

●Exporting nuclear power: Search for target after UAE, total war in opening doors of overseas nuclear market. (Part 1); in Japanese
●Exporting nuclear power: Search for target after UAE, total war in opening doors of overseas nuclear market. (Part ２); in Japanese

●Exporting nuclear power: ‘This contract makes Korea brother of UAE for 70 years’; in Japanese
●Exporting nuclear power: ‘Impressed by Korean spirit of “let’s try and see”.’; in Japanese

A Glowing Achievement for Korea

KEPCO Clinches Mega Nuclear Plant Deal with UAE

Then, what are the reactions of Japan?  I have written on it in my earlier reports (1 and 2).  My advice is to learn from the contents in this Part 3 or elsewhere, compare and think hard.  Winning and losing is a part of competition, so reflecting and humbly learning from the experience would be the first step to next move.

I think that difference of top management of the organization; whether the leader is a ‘winner in tournament’ (basically, one who avoid mistakes will make it through) or one who ‘won in league’ (one who learn lessons from his/her defeats will climb up the ladder) will be clear and causes effects at situations like this.  Refer to books by Kazuhiko Toyama, ‘Yubi ippon no syunen ga shyobu wo kimeru (A finger-tip of obsession decides the winner), ‘Kaishya wa atama kara kusaru (A company will rot from the head)’ or Ref.1 .  People without any personal experience of fighting hard in their young age tend to lack spirit of learning lessons from defeat, or seeing chances for growth in defeat ? in other words, these people lack adventurous sprit, spirit of entrepreneur, value of‘nails that stick out’ (Ref.1, in Japanese)

For Japan that failed to grow and now suffered ‘lost 20 years’ after the bubbles, 2010 will without doubt be the crucial year.

Efforts to understand ‘Japan as seen from outside’

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　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　Recently, I have posted two columns (Ref.1, 2) on ‘Japan as seen from outside’ which I have written in rather a straightforward style.  Via internet, I could see a number of people agreed and approved of my views.
　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　So what can we do about it?  I suggested a small example.  It appears as an interview article (English translation of article written in Japanese) in a monthly magazine‘GOETHE’ .

We all know that CNN and BBC are not the only global television networks, and we understand that The Economist (about 440,000 circulations) has a large number of subscribers, but I believe that we should utilize Internet more.
　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　An interview article of Mr. Kensuke Watanabe (Ken Watanabe) (English translation of article written in Japanese) appears on the left part of the page of my article, so I uploaded the whole two pages for your interest.  Just taking a look at his biography will convince you how wonderful his background is, but his activities are also impressive.  He published a charming problem solving book for children ‘Sekai ichi yasashii mondaikaiketsu no jyugyo – jibun de kangae kodoh suru chikara ga mini tsuku’ (The easiest course on problem solving in the world ? lessons on how to think and act by yourself) (Translations in English and other languages are available ) and not only that – he is actually practicing what he writes in his book.  Mr. Watanabe is a good example of those wonderful young people that I meet once in a while and try to support as much as I could as appropriate.  Dr. Yohei Sasagawa also introduces a moving story on Mr. Watanabe in his blog (in Japanese).  Mr. Sasagawa himself is working very hard in the field of Global Health.
　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　　Sometimes, you find truly wonderful young people in Japan who will be making the future of this nation.

 

Concerns about ‘Japan as seen from outside’

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As frequent visitors to my blog will already have noticed I am one of those who have had concerns about the future of Japan for some time.  Until just several years ago, an odd optimism on economy of Japan that sounds somewhat like an ‘excuse’ was spreading widely in Japanese society along with expression such as ‘upwards economy since Izanagi Keiki’ (Izanagi keiki refers to an economic boom that lasted from 1966 to 1970).  I was sending out warnings then, too.  For instance, please see my interview in Toyo Keizai January, 2008  issue. 

I assume that there are many those who do not want to or will not buy my opinion, but just recall, at the time of ‘Lehman’ shock, there was an atmosphere in Japan of ‘Japan will be all right’ at least in the beginning.  However, generally speaking, I think basically Japanese enterprises- especially managements – are weak.  Of course new industries emerge but I hear many instances of major companies obstracting the growth of new businesses by entrepreneurs while they are still young and small.  Big enterprises are naturally slow in adjusting to changes, which is a common story.  Also, I feel that a large number of Japanese people are not good at intuitively sensing the value of ‘Diversities and Differences’ that exists in this global world simply because they do not have much first hand experience.

This truly is the crucial stage for Japanese politics, economy, industries, and universities in the face of, as correctly put by Asia Innovation Forum;The Earth’s limits, Asia’s growth.  The ‘leaders’, unable to catch the essence of global age having climbed up the ladder in many decades-old system, think that situation in Japan is ‘so-so’ and tend to lie back in their comfortable chair failing to take any drastic actions.  Some people compare them to ‘frogs in lukewarm water’.  Oh, but Japan has so many ‘strength’ that it can utilize and I would urge all of you to take advantage of this strength.  ‘Entrepreneurial spirit’ is the key word.  We must recognize our ‘weakness’, focus not only to domestics but broaden our views to international affairs and collaborate with partners around the world in taking actions.  Speed matters.

Japanese who have long worked abroad as an independent ‘individual’ understand and feel intuitively what I have just said.  I call this an ability to ‘see Japan from ‘outside’’.  What they see is very different from ‘Japan in the world’ as seen by most Japanese because most Japanese have been used basically to‘see world from Japan.’.
In the past two weeks, I had a visit from two Japanese scholars/researchers.  One is Professor Hisashi Kobayashi of Princeton University.  I assume you all have heard of him.  He was so concerned abut the too-domestic-focused ideas and actions of Japan that he decided to come to see me. I shared his view 100% so we discussed very much on what to do or what could be done.  I believe that readers of my blog would understand how I am making efforts to make changes, but even universities, the ‘campus of intellects’ that should be standing highly by itself, are seeing things in a narrow inward way.  Especially at the ‘leading’ universities, the young students naturally would think that the standard there is ‘first class’, and this general perception in Japan is causing significant damages.misleading students.

The second guest wasDr. Ryo Kubota.　He has been working in the field of biomedical research in USA for 10 years and founded a Biotech Venture. Dr. Kubota stopped by at my office during his stay at Tokyo to express his deep concern about how Japanese research and venture businesses were being conducted.  He was apparently alarmed by what was happening in Japan.

I think that the concerns of these two people represent‘Patriotism’.  Experience such as theirs’ will hardly nurture narrowly-minded ‘Nationalism’.

In addition to these two Japanese guests from abroad, I had opportunities to welcome visitors from the top managements of SITRA (Ref.1), a public investment fund of Finland and two biotechnology related investment funds of US in sequence.  Everybody had same topics, concerns and points.

It is so important to have more people, in their young age as much as possible (because you can afford to make mistakes…. You can learn from the mistakes and become wiser…) to go abroad to the wide world and to know what is happening there, to see Japan from ‘outside’, to have first hand experience and to become more capable of sensing instuitively how Japan would look like from ‘outside’.  ‘A frog in a well does not know the great sea’ – just as the proverb goes. ‘Knowing’ the great sea through actual experience is crucial to everybody especially in this global era.  The two Japanese visitors from overseas were so worried about the current status, thus the future of Japan precisely because they have had this actual experiences.

Well, even so, Japan holds yet the 2nd or 3rd place in the world economically.  In addition, we have so many strength that others would envy.  I urge you all to go out and fly.  Don’t become secluded.

Dr. William Saito (Ref.1) is a Japanese American that I have been working with for these two years and he also shares the same view with me.  His evaluation is actually very severe, clearly recognizing the systematic weakness of Japan perhaps partly because of his experiences and success in a venture business in the United States.  We are struggling to bring about some changes…  sowing seeds, crafting exciting mechanisms…

Democratic Party of Japan has won the election and?

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On August 30th, Democratic Party of Japan (DPJ) won a historical and land-slide victory over Liberal Democratic Party (LDP), the political party that held political leadership since 1955 building so-called ‘Regime 1955’ and ‘Iron-Triangle’ structure of Japan Incorporated (a brief break by Prime Minister Hosokawa lasted less than one year, but the Regime ’55 did not change a bit).

The result has far-reaching implications on the future of Japan. The results may not indicate the public at large tried to punish LDP for economic downturn, rising unemployment, and widening of income disparity or ‘Kakusa’, a view popular by the media here and there. Rather the results may indicate a rising awareness of the public’s thirst for ‘Change’ and realization that JDP cannot Change of resistance from heavily tied ‘establishments’ and ‘stakeholders’ of the ‘Regime ’55, eg, centralized powerhouse of bureaucrats-run ministries silos, big corporate establishment, farmers, civil construction and other interest groups.

This view which I portrait above seems consistent with the views of other opinion leaders outside of Japan who have watched and closely worked with and in Japan.  An Op-Ed appeared in September 7th of New York Times by a well known author of Japan, Ryu Murakami, ‘Japan Comes of Age’ also portays the public perception of reality of Japan.

The Economist, September 5th and other issues, for example, provide several pages of coverage such as ‘The vote that changed Japan’  , ‘Lost in transition’, ‘New bosses’ and ‘Banzai; A landslide victory for the DPJ Japan’ . Other media and presses abroad share similar commentaries.

In Huffingtonpost, a liberal on-line news and blog, which President Obama is one of frequent contributors, Dr Sunil Chacko (Ref.1), another frequent contributor and a friend of mine, also wrote on the DPJ victory with a title ‘Japan’s New Era’.

A writer, journalist, and a well know observer of Japan, Bill Emmott sent me an email in February saying ‘I also wrote a quick column for The Guardian the same evening I bumped into you for their online version with a title ‘A silver lining for Japan; The economic suffering here has been harsh and long, but at last political change is coming’.

When you read his column, it is of particular interest to note its concluding sentence (underlined) of the last paragraph, precisely the pointing to our democracy as I have been often pointing out in my speaking engagements and writings （Ref.1, 2, 3) (the sites are in Japanese except Ref.2). The paragraph reads as:

‘It is a country, in other words, that is in desperate need of a change of government, and the election of a party dedicated to repairing broken social services as well as shaking up the economy. No doubt as and when the DPJ wins power, it will bring disappointments and its own occasionally shambolic ministers. No matter. The important thing in a democracy is to punish those who have failed and to bring in a new crowd capable of making new mistakes. Japan has waited far too long for that.’

Be aware, Japan remains still second largest economy of the world, thus Japan must and is expected to carry its own responsibilities in the world affairs even in ‘The Post-American World’. Indeed, Japan has lots to offer to the global challenges, but not much signs of proactive action and engagements matched to its own economic power, at least to me.