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Japan-Update

The self-imposed glass ceiling

Why Japanese executives struggle in international companies

Japanese executives at foreign companies are still rare.

As a Japanese executive, who worked 23 years for U.S investment bank Goldman Sachs, I have always been puzzled by how few Japanese rise to the top ranks of foreign firms in Japan.

In posts where dealing directly with Japanese clients is the key to success, Japanese nationals account for almost all the senior staff. But in areas such as technology, management and others, where client contact is not central to the work, many Japanese "wash out" in their first decade of employment.

I joined Goldman Sachs Japan as a young woman straight from Hitotsubashi University in 1993, becoming, in 2010, the investment bank's first (and only) Japanese managing director in the technology division.

By the time I retired in 2016, I had had more than two decades to observe my fellow Japanese in the business environment.

It's not that they are lazy or unmotivated. But, Japanese education and society don't prepare them for success in foreign corporate environments. In Japan, working hard, playing by the rules, and getting older are the key to promotion. But in global firms just being a reliable cog in the wheel is not enough. Leadership, initiative, and engaging with the entire organization are essential.

When a Japanese hire joins a "gaishikei" (foreign-owned Japanese subsidiary), she or he faces an enormous culture shock not very different from that of the 19th century Japanese who confronted Commodore Matthew Perry's black ships.

In foreign companies, young professionals must set their own goals from the day they join. It's up to them to figure out what type of career path they want, and realize what are their strengths and weaknesses. They must do this on their own and by seeking out mentors. They must learn quickly to take charge of themselves much more than their peers in "Japan Inc."

Once they have done this, they should display leadership. They have to express themselves effectively and succinctly verbally, and in writing, and be ready to argue their case in meetings. For graduates of universities in the West, these are skills have been developed since primary school, but they are alien to the Japanese school and college curriculums.

In addition, In Japan, promotion through seniority leads to a zero-error mentality. The key is to avoid failure, rather than achieving exceptional results. Even if they join a foreign business straight after graduation, Japanese have internalized these values.

But, "by the book, don't rock the boat" types don't succeed in international corporations. Failure is not a death sentence; calculated risk-taking is the key to promotion. Simply being a faithful employee is a recipe for getting fired in your 30s when your employer sees that you lack the drive and initiative to take on broader responsibilities (as Mark Antony explains to Octavius, in Shakespeare's Julius Caesar, when told that Lepidus is a tried and valiant soldier, "So is my horse.")

Moreover, in Japan the employer, alma mater, the entering class in a business (known as doki) automatically forms its own ties and creates a network for professionals. When picking up the phone, Japanese say first the name of their employer and then their own (as in "Hello, this is Company A's Mr. Sato"). In a global business, professionals must independently develop their own networks, both within and outside the organization. They have to reach out to colleagues in other divisions, subordinates as well as superiors. Understanding social media (such as LinkedIn), establishing ties with individuals outside of their reporting line is equally critical.

Japanese also face a different environment when socializing. Traditional after-hours socialization in Japan involves only those who work at a particular company or institution. Westernized environments, where spouses and significant others are involved and where individuals often invite a mix of friends and colleagues to their homes, are new and often challenging for Japanese.

Finally, there are gender-related issues for both women and men. Japanese elite college majors have relatively few women and the percentage of female managers and executives is lower than in the West. Many well-educated young women professionals still see a job is a long "gap year" prior to establishing themselves as full-time professional housewives (a social position which carries its own status and prerogatives). Japanese female professionals are in particular need of support, through mentoring and role models, to acquire the self-confidence necessary to persevere.

Social pressures

Because corporate Japan is less welcoming to female professionals, international corporations which gain a reputation as great places for women can recruit first-rate women (as Carmen Nobel, Senior Editor of Harvard Business School Knowledge, noted in a paper). But even if they work for employers who foster gender equality, Japanese women face roadblocks to success. Social pressure from relatives, husbands, and other mothers in their children's school, can give them the impression that striving for professional success is a betrayal of their duties as daughters, daughters-in-law, wives, and mothers.

When working with outside clients, Japanese women are often frightened by the prospect of dealing with a male, and often older, opposite number. Giving orders to male subordinates is also challenging. Many think that most men and women look down on them for not being "traditional" ladies focused on their husbands and children.

Additionally, developing networks is also particularly difficult for professional Japanese women. They have few women peers and many Japanese male networks are off-limits to women, such as late-night drinking parties, where only men are welcome.

For Japanese men, the challenge is adapting to a corporate culture where there are likely to be far more female managers and executives than is the norm in Japan.

Many foreign employers lose valuable Japanese talent due to these cultural obstacles. They need to devote more resources to mentoring and training their Japanese new hires to succeed. Those who do will gain a significant comparative advantage over competitors who will either be short of effective managers or forced to rely on expensive expatriates who lack an understanding of the Japanese market.

Nagisa Inoue is a former Goldman Sachs Japan managing director. She graduated from Hitotsubashi University in 1993. After joining Goldman Sachs Japan, she was promoted to managing director in 2010 and retired from the firm in 2016. She lives in Tokyo.

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