Rehfeld, J.E. (1990). What working for a Japanese company taught me. Harvard Business Review, Vol. 68, No. 6, pp. 167-76.

What can we learn from Japanese companies that we can apply in our own management roles?

Describes ten management techniques that can be useful even in America and why they are effective (with examples from 10 years top management experience in Toshiba and Seiko).

> Welcome to Japanese Management

* Budget for Six Months

Japanese fiscal year runs from April to March. A full-year budget is prepared but only the first six months (A period) is approved. The next six months (B period) is modified according to the results of the A period. At first this seemed like too much work, but after a while the ability to change the budget according to the fast pace of the changing business environment was a big help. This practice also gave everyone a chance to ‘wipe the slate clean’ – this was good for motivation because it gave managers to readjust goals that had become unacheivable.

* Fix the Problem, Not the Blame

Discussions were always calm and focused on fixing the problem rather than apportioning blame. This led to a greater feeling of team spirit and trust.

* Don’t Rest on your Laurels

Acknowledgement of success is rare – this can lead to discouragement and resentment. But, looking at this from the perspective of kaizen (continuous improvement) it can be understood as a focus on process, reflection and improvement as opposed to absolute results (i.e. plan, do, stop and look at the results and see how it could be better). American managers are more task oriented, seeing the results/discussion as a ‘report card’, or ‘pat on the back’. The point is not whether it is good or bad to withold praise but that constantly trying to do better is important.

* Stay focused.

Americans like big deals and get rich schemes. Japanese value incremental improvement. Staying focused channels energy and helps define your business. This may be boring but with practice it becomes easy.

* Quantify Everything.

The numbers you come up with might not be an end in themselves, and maybe Japanese do take it to an extreme, but there is value in trying to quantify the uncertain (forced estimation, consideration of alternatives, benchmarking).

* Know the Whole Person.

Building personal relationships builds trust and makes communication easier.

* Get People to Buy into the Decision

When everyone bought in they really made a commitment and worked so hard that they made up for the slow process of consensus building.

* Empower the International Sales Group

Japanese organizational structure and job titles are not comparable to those in America – there is a lot of ambiguity. The power that the international sales and marketing group (ISM) had at Toshiba meant that the author had two bosses (one formal – the president of Toshiba America, and one informal – the general manager of ISM). This led to greater flexibility as he could channel he opinions through his informal boss.

* Visit Customers, Build Market Share

Japanese place high importance on meeting with customers. At Seiko there were guidelines for the percentage of time that each type of manager should spend with customers (e.g. marketing, 25%; engineering, 5%).
Market share is also important – it makes you visible and builds word of mouth, leading to confidence in your product. This costs money but is acceptable if the company is making a safe amount of profit. This may be harder in America where most companies have to produce results quarterly to support the stock price.

* Demand Active, Informed Directors

The board of directors in a Japanese company consists of 15-20 top operating managers and a few close outsiders. This means that the board is a kind of extension of top line management and that their focus is on building value rather than ‘financial or legal maneuvering and deal making’.

> Japanese Blindspot: Outsiders

There is a sharp insider-outsider distinction in Japan, which can lead to ‘old boys’-style networks in companies. This can mean that they are loathe to hire outsiders for anything other than entry-level positions. Non-Japanese managers are often left behind in terms of career advancement.’Shadow manager’ refers to a Japanese employee who informally communicates to Tokyo regarding the situation in the (for example) American subsidiary – this can be a negative or positive experience.

> Japanese Blindspot: Women

Women are terribly underused. One reason for this is that top management expect them to leave when they get married.