The COVID pandemic shed light on an enduring gap between the HQ of foreign capital companies and the realities of the Japan market regarding executive leadership. On a macro level, the HQ view of the Japan market falls into three broad categories: “Japan is an important market, but we are unsure how to allocate resources to really succeed,” “We can just launch and approach Japan just like any other international market,” and “Japan is a nice little market that is humming along, no need to rock the boat.” When the pandemic hit and foreign executives had to return home for an extended period, the inherent gaps in executive leadership became more pronounced, and visible. Even an existing business that had been running smoothly will start to lose its way without a talented leader in place. Leading remotely is sub-optimal and it is highly difficult to steer an inherently rudderless boat. This is particularly true of leadership is not well versed in how the Japan market works. And if HQ didn’t know how to capitalize on the Japan market until now, the distance had been even more exacerbated.
As COVID eased and borders opened up, we have seen a rapid ramp up in interest in Japan, both for tourism and business expansion. The number of established companies looking to enter the Japanese market is steadily growing, and we are seeing momentum in growth of the number of startups that are keen to enter and grow in the Japanese market. The pandemic shined a bright light on the need for some kind of strategic leadership solution, as well as a need to adapt to a more flexible workplace when entering and growing in the Japanese market. We have identified four distinct types of Flexible or Strategic Leadership that will help to bridge that enduring gap.
Launch Leadership
Entering the Japanese market and launching a new business can seem daunting, from one perspective, and look easy from another perspective. From both perspectives, however, choosing the right launch leadership is one of the most important decisions a company can make when starting up in Japan. The views at HQ can range from “we have to have a Japanese native because after all this is Japan” to “let’s get a sales agent on the ground and start selling first.” There are of course all the variations of these views, but the most important questions to ask are, “what kind of skill set does a launch leader actually need?” and “do we have a Japan market ready leader already in the company-someone with Japan specific cultural intelligence?” The Japanese market has very distinctive characteristics and is like no other market. Choosing the right launch leadership can make or break a Japan business launch.
Growth Leadership
After your Japanese business has launched, it is imperative to take a rational look at how things are going at strategic points in its growth. The very best launch leader may be perfect to take you to 10, 20 or 50 people. That person may be a great founder type. But it happens so very often that the launch or founding leader is not the same person to take the business to the next level. A growth leader will be experienced in pulling together the many moving parts of a new business and ramping up growth. Particularly in Japan, the first year or so may be indeed focused on getting relationships in place, hiring some key people, and establishing the presence. From year two or so on, you need a leader who can capitalize on the foundations and “take charge” to expand. An experienced Japan based culturally intelligent leader can often help HQ to see opportunities that are distinct to the Japan market. There are so many ways that Japan looks like another western country on the surface, but underneath is a very different story. A talented growth leader can help HQ see through the veil to identify new opportunities.
Transformational Leadership
Transformation leadership can be an extremely compelling solution in certain circumstances. One of the aspects of the gap between HQ and Japan that is enduring and perhaps the most frustrating is the speed of change in Japan. As much as people read about it, hear about, even witness it, change in Japan can take three times longer than anywhere else. This is even more difficult for a new expat to effect. An experienced Japan leader can often parachute in with a specific mandate, and if that leader has the cultural intelligence and linguistic skills, effect change in a Japanese business environment faster than an existing leader or new expat from HQ. Change will still take longer than most other countries, but a seasoned transformation leader with Japan expertise can speed things up.
Another form of transformation leadership is when there is a special or new project that needs to be implemented. The existing CEO or Country Manager probably already has their hands full running the existing business. A transformation leader can come in and on an interim basis, launch a new project or initiative without straining existing leadership resources. This could also be termed “change” leadership in terms of implementing a new business project or driving a digital transformation that needs to be handled by a “third” party.
Authoritative Leadership
Leadership in times of crisis: determined, clear communicating, steady, trustworthy, motivating. Gets people back on track, gives the confidence, calms the entire team. Able to steer the team through dramatic change.
Evangelist or Advocate or Charismatic Leader
The visionary who is infectious with enthusiasm and brilliant with positivism. This is often the ultimate leadership style of a founder who has been able to go through growth cycles to become the charismatic evangelist of their first vision. After a transformation or dramatic change, companies and teams often crave a charismatic and evangelist leader.
Interim Leadership
Perhaps the most common need for an interim leadership solution is when there is an unanticipated “gap” in leadership. The expat who had to return home for various reasons or had to be let go leaves a gap. Hiring a C-level permanent leader is a time consuming and important process and HQ is right to take their time to get it right. In the meantime, the business needs a leader. A seasoned Japan experienced leader can often step in to take the reins of an existing business to ensure continuity, maintain team morale, and preserve the all-important trust relationships with business partners in Japan.
Two potential benefits of an interim leader are one, that leader can parachute in and actually provide HQ with a fresh, third party view or even analysis of how things have been going on the ground. Being the new eyes and ears of HQ can create a deep level of trust between HQ and the Japan leader and shed light on the kind of leadership skill set that is actually needed. Two, the interim leader may end up being the best final choice for the permanent C-level role, once they have been on the ground, seen what might need to be done, and gained the trust of the teams.
We find it helpful to use these five types of strategic leadership to organize thoughts about how to deal with or approach the Japanese market. In that context, there will be many situational permutations of each cadre. The beauty of strategic leadership is its flexibility.
Interim Leadership
Perhaps the most common need for an interim leadership solution is when there is an unanticipated “gap” in leadership. The expat who had to return home for various reasons or had to be let go leaves a gap. This may be an ideal time to do a strategic review of leadership in Japan: where is the business, and what kind of strategic leadership is needed.
Hiring an appropriate C-level permanent leader is a time consuming and important process and HQ is right to take their time to get it right. In the meantime, the business needs a leader. A seasoned Japan experienced leader can often step in to take the reins of an existing business to ensure continuity, maintain team morale, and preserve the all-important trust relationships with business partners in Japan.
Two potential benefits of an interim leader are one, that leader can parachute in and actually provide HQ with a fresh, third party view or even analysis of how things have been going on the ground. Being the new eyes and ears of HQ can create a deep level of trust between HQ and the Japan leader and shed light on the kind of leadership skill set that is actually needed. Two, the interim leader may end up being the best final choice for the permanent C-level role, once they have been on the ground, seen what might need to be done, and gained the trust of the teams.
The Flexibility of Strategic Leadership
A particularly appealing aspect is that these strategic roles can be non-exclusive and for a specific term, such as one year. Moreover, they can be structured to suit the needs of your Japan business. In certain cases we can recommend a C-level executive for a two or three day a week engagement over a specified period. This is particularly attractive to SMEs who cannot afford and do not need a full time C-level, such as CFO or CMO, but desires to have that kind of deep expertise. Additionally, these non-exclusive and potentially non-full time engagements allow you to access a much wider pool of experienced executives with deep Japan experience.
The Japanese market is like no other and thus leadership solutions also require some out of the box thinking.
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