Can you tell us about your background and what drew you to Japan?
I came to Japan on an exchange program with Keio University to study Japan’s radical transition from a feudal society to an industrialized Western style form of democracy. Part of this program was an intensive language course and when I decided to study here for an additional year, that period escalated into a 12 year permanent residency. Currently I’m the Managing Partner of NEO Search Partners, an executive search firm with offices in Japan & The Netherlands.
As a historian, how do you think Japan’s history has shaped its current business culture and practices?
Historically, Japan’s economic engine was (and still is) based on heavily competing conglomerates. Originally these were known as the Zaibatsu (most notably Mitsui, Sumitomo, Yasuda, Mitsubishi), but were reformed postwar into Keiretsu (group companies), based on western-style corporate governance. These group companies work through diversified subsidiaries in a variety of industry niches ranging from real-estate, financial service to manufacturing. Some of these juggernauts are still active today, and many have joined their ranks as Japan economically expanded. Two notable new additions being Rakuten & Softbank.
It’s important to understand this historic habit to consolidate in Japanese business interactions. The West’s fascination with, and appreciation for, start-ups is entirely alien in Japanese economic history. If an idea is really good, the smart people at one of the big conglomerates would have surely already come up with it. And even if the idea is good, how is the start-up going to scale? Financial support without backing of a larger parent company is virtually impossible. This is also the reason why somebody like Softbank’s Masyoshi Son and his Vision Fund are such outliers in Japan’s economic landscape, because they DO invest.
The same applies for Unicorns: the idea of a billion dollar company doing one thing really well, and exclusively focusing on that thing, is extremely un-Japanese. In Japan, Tesla, SpaceX, Twitter, The Boring Company & Starlink would have been subsidiaries under one parent company.
This economic tendency towards consolidation is reflected in its business culture: conformity, uniformity & collectivization are not just values, they are the norm. Deviation from these norms is considered risky, unnecessary or in the worst case downright offensive.
Can you speak to the challenges and opportunities of doing business in Japan, particularly as a foreigner?
Unaware foreigners can therefore easily hit a wall doing business in Japan. Often Japanese counterparts will simply clam-up, deflect or stop engagement entirely, without explaining why, or just stating “this is not how we do it in Japan”. The opportunity lies in carefully explaining how your business/product/solution CAN be successful in Japan BECAUSE it solves Japan-specific problems. Starting a conversation with “this will work here because it works in other markets” will certainly earn you a subdued scoff.
In your opinion, what are some of the most significant cultural differences and synergies between Dutch and Japanese business practices?
It always struck me as peculiar that the Dutch and Japanese have such a long and fruitful business history going all the way back to 1641, while communicating in almost diametrical styles. For the Dutch “yes” means “yes”, “no” means “no” and “maybe” might actually be “maybe”. The Japanese on the other hand prefer a more roundabout way of getting towards consensus, namely through a harmony driven decision making process. And this is how they both get to the same place by a different road:
– The Dutch prefer debate, discussion and eventually compromise to reach consensus.
– In Japan alignment, cohesion and eventually unanimity are the way to go.
But in the end “consensus” is the ultimate value on both sides. This common endeavor to reach consensus is ultimately the synergy that overcomes the cultural differences.
What do you see as the future of business and entrepreneurship in Japan, and how can Dutch businesses play a role in this future?
There is a shift happening towards a higher level of appreciation for entrepreneurs and start-ups in Japan. Starting a business is no longer viewed as a sign of being “unemployable” and joining a start-up is now considered a valid career move instead of wasting your talent. Dutch companies can capitalize on this trend by acquiring talent that was previously unattainable.
Businesses from The Netherlands that have a high chance of succeeding here are likely specialized in green technology, circular economy and renewable energy. Dutch enterprises are global industry leaders in these sectors and demand for these services is surging in Japan without hardly any local supply.