Effectively Globalized Japanese Companies’ Habit #1: Aim to be ‘Glocal’ Market Leaders
Focus on Global Markets
Our first and most important “globalization” habit for a Japanese organization is to think global and act local, in a “go glocal” strategy, as first expressed by Akio Morita for the Sony Corporation he founded. To achieve profitable growth in each of its main global target markets, a company needs to truly engage with the people of that market, overcoming linguistic, geographical and cultural barriers, and hiring and developing its local leaders.
It is no longer enough for a Japanese organization to just develop products and services first for domestic clients, then make them available globally. If it only sells products globally via dealers, trading companies or online as a kind of afterthought, by just translating its homepage and product instructions and complying with minimum market needs, it would be unlikely to beat locally strong competitors. This would limit global sales growth and eventually risking losing domestic market share to a larger global competitor enjoying economies of scale from its operations in all major global markets, or even invite a takeover from them.
If “global success” means to profitably win market share around the world, then going “glocal” achieves this by providing the right products and services for each key region via direct communication with customers, in ways that maximize demand and profit more effectively than their competitors. It requires hiring local teams or at least providing deep long term support for local partners in each market, which means overcoming cultural and other obstacles to create winning teamwork.
The other six habits then become ways to support the achievement of this “glocal” habit whilst leveraging the unique combination of special strengths of each Japanese organization.
Leading in each key global region means adapting marketing, sales and services effectively for each market, so overall sales ratios per global market would basically match each market’s size. By this definition, if the Japanese market for a given organization’s industry happens to comprise 10-20% of the global market, then its percentage of total global sales in the Japanese domestic market should also be only about 10-20%. In reality, for logistical, innovation-focus and cultural reasons, most global organizations sell more in their home country or region, but arguably most Japanese organizations have traditionally been far more reliant than global competitors on their domestic market (See McKinsey 2006 survey) and on dealing globally with Japanese global clients, than their non-Japanese competitors.
Satisfy Local Markets
Each market around the world has its own peculiarities which affect which types of products and services will sell best, and how to sell them. For example, P&G’s Gillette consumer marketing innovation team lived with Indians to learn the locals’ needs, and were surprised to learn many Indians shaved without water. When Gillette released a self-lubricating razor, it became the top seller in the Indian market. Toyota’s Lexus was created for the “affordable luxury car” space in the North American market and quickly supplanted its rivals.
B2B selling styles should also vary according to markets; whereas Japanese companies may prefer receiving lots of information and documentation in a slow, group-oriented process which aims to minimize risk, many Western companies may prefer paperless presentations explaining unique strategic value and ROI (return on investment) over the next few years, culminating in a quick negotiation. In contrast, Indian or Chinese bosses may prefer to know exact lowest price solutions, and how to move fast to make a profit in their specific short-term situation.
If “glocal” means the optimum balance of efficient global standardization with key adjustments for each local market, then Japanese organizations need to have excellent information sharing, global-local branding expertise, and globally well understood and properly used systems. Such systems may include cloud or enterprise solutions for sales management, CSR, content marketing, marketing automation and other techniques which ensure high demand for uniquely valuable products and services.
Support Local Information Sharing
IT systems which support effective information and idea sharing across countries, time-zones, departments and individual job movements are important to for keeping everyone understanding what local needs are and what can be provided globally. In return for timely and clear information sharing back to head office, each local market’s team could be provided with its own budget to use flexibly for sales, marketing and innovation. Successful activities could be shared as best practices with other regions. If this could happen independently of head office, with rewards for good sharing, then local staff could have their own chance to become global leaders, and globally-focused (rather than Japan-focused) marketing would spread faster and stronger.
Also, discussion needs to become more “Socratic”: franker, quicker, and allowing new ideas and challenges to headquarters’ top managers’ thinking. When we ask mixed groups of Japanese and non-Japanese participants of all ages if they would prefer more Socratic meetings, they overwhelmingly say yes, but are unsure how to achieve this change. Altering the flow and roles within meetings using clear templates for each different meeting type could assist this.
Explain How Locals Can Influence Head Office
Finally, cross-functional and cross-market communication needs to be enhanced by building a shared understanding of Japan’s “ameba” or team-based working style and how it can interface with more global style individual responsibility systems (LGS refers to these as “Tetris”) or hybrids of the two styles in each country with better ho-ren-so between functions, regions and headquarters. In support of this, human relationships also need to improve, and business speeded up, by making faster decisions, and faster calculated risk-taking that supports risk-takers and derives benefits from failures as well as successes. Clearly all these changes are somewhat connected and a movement towards “glocal” marketing would involve a synergistic introduction of a number of communication improvement initiatives simultaneously, affecting everything from planning to meetings to reporting to support systems.
In summary, “going glocal” is a wide-ranging endeavor, combining strategy, marketing, information sharing systems and developing local talent. The rewards are huge, including ensuring the very survival of the organization itself, as well as earning the chance to grow across the world.
Jon James Lynch is the founder of J-Global, which provides organizations in Japan with training in the J-Global method, a powerful new framework of mindsets and skills for managing, working and communicating more effectively in an international environment.
Jon has decades of experience in Japan consulting for business leaders and facilitating training sessions and workshops. In his partnership with the Nikkei Group during the past 5 years, he has expanded his reach to hundreds of leading Japanese and multinational companies.
This article was originally posted on Link Global Solution’s website.