Japanology 101

I have recently found the term "Japanology" used in some articles, but they all seem to have misunderstood its significance.  So,I thought I should give a clearer view of the "Japanology" for those who are interested in the term. This is the diagram I have used for over 20 years when describing Japanology. The descriptions for the Japanese words I have used in this diagram need to be given however, Japanology is significantly deeper than those definitions used among so called Experts of Japan. 

There are much to be explained to fully understand what this diagram entails. I am going to get into some details in the next post.

M&As that are bound to fail

One thing that needs to be understood about M&A is that they seldom succeed. As a matter of fact over 70 % of all M&As regardless the scale and the industry fail, and the another 29 % out of the remaining 30% end up getting far less value than they expected, let alone any notable synergy effects. That leaves only 1 % of all M&A deals around the globe actually succeed with reasonable benefits.  Only people who reap the rewards in any M&A, regardless it succeed or not, are the lawyers, accountants, brokers and promoters. M&A is by far the riskiest proposition that any businesses can undertake.

So, it is a proven fact that most M&A fails, and many of them fail miserably.  I have personally witnessed several large scale M&As undertaken by major Japanese corporations such as, Hitachi, NEC and others, failed miserably with huge loss, all of which were bound to fail from the start. But the gullible management believed otherwise.

I have involved in over 100 M&A deals directly and indirectly in the past 25 years, most of which were in U.S.A, Canada and Europe, and experienced at first hand how the deals fell apart and how they succeeded. Regardless the scale and the industry of the deal, the key common elements of failure are;

1. Wrong motive
2. Incompetent management
3. Cultural mismatch
4. PMI failure

Recent study shows that the cultural mismatch is the key failure factor of any M&A. That is true. However, What all those experts on the subject have missed is that the first cause of all the failures is the very motive of the management who chose M&A to achieve their objective, which are, in most cases, the instant improvement of market share and the financial numbers. There are other strategic objectives, off course, like acquiring various knowledge capital such as technologies and know hows, as well as expanding territory, product lines and the entry into the new market.

Whatever the objectives of the M&A may be, most of the leaders have one common misunderstanding or misguided belief about M&A, that is, 1+1 does not amount to 2, never mind becoming more than 2 with synergy effects that so many people believe in. Even the reasonably successful M&As produce 20 - 50 % (1.2 - 1.5) added value to their existing businesses.

Failed M&A looses even the existing value producing negative impacts. One failed M&A can even destroy the entire company. One good example in the recent even is Toshiba. They have driven themselves to be on the verge of chapter 11 due to their failure of merging with Westinghouse.

In the next post, I am going to discuss further on the inner working of M&A and  an alternative to M&A to grow your business.

What's strategy got to do with it. Part 4: Strategy as an organizational Language

While Strategy in the Organization 2.0 (mechanistic and pyramid structure organizations) is a management mandate to be cascaded down the organization, in the Organization 3.0 (organic cell community based organization) , Strategy is a language to be used to communicate and share the vital information such as navigational information as well as the fundamental values, principles and culture of an organization among all cells.  Cell is a functionally optimized team that can form a task force and a community with other cells to take on specific missions and challenges of the organization. Unlike the Organization 2.0, each cell in the Organization 3.0 is unique in its function and competency and provides its value to other cells and to the organization as a whole in proactive and collaborative fashion.

Strategy in a organization 3.0 is not formulated in a isolated dark room like it is in a organization 2.0.  Since the strategy in a organization 3.0 is a language, it is formulated in collaboration with all cells where every cell in a organization contributes to its formation, management and constant improvements through everyday communication. We, at MasterLingual Academy of Communication, call this new generation form of strategy "the strategy 3.0".

Some of you might wonder just how you are supposed to make Strategy into a language and how to use such language to communicate all throughout the organization

First of all, Strategy 3.0 do not function in the Organization 2.0. Since most of today's organizations, especially the large corporations, are Organization 2.0, they are not ready nor designed for the Strategy 3.0.

Having said that, there are basically two options for the organization 2.0 to adapt certain elements of Strategy 3.0.  One way is to abandon strategy. This will take a huge leap of faith for most corporations. But removing strategy out of your organization and allow common sense to take over the management and the operation will not only reduce the strain of unnecessary reporting, documentation and meetings, but also unleash the potential of talents in a organization.  But, as I said, letting go of the very thing that they have believed to be the essence of an organization is like suicide to most of them. The 2nd option is to adapt organization 3.0 model in project basis. Since the transformation of Organization 2.0 to 3.0 takes a significant commitment, effort and time, the idea is to spin off a certain business projects to form a temporal organization 3.0. In this case you need to put in place a buffer system between the temporal organization 3.0 and the existing organization.

The details of how those 2 option can be implemented in your organization is available to be disclosed for those who are interested.

What's strategy got to do with it ? Part 3 : Common sense vs Strategy

In the last post, I said that the common sense works more effectively than any complicated and systematized strategy particularly for the modern Japanese organizations, that is, the organization 2.0 in Japanese style. However, the common sense that we use in a general sense is neither universal nor necessarily being shared by everyone in the organization.

What we call a common sense in general can be very local. So local that only those who are in  close circle can really understand. There always are some differences in nuances and context in so called common sense that often cause miscommunication and misunderstanding even among people who share the same culture. This is due to the fact that common sense is an unspoken consensus among the people in the same cultural and social environment. Because they are unspoken and even unconsciously assumed in some cases, it is not always easy to share them in a conscious level.

So, even the common sense that we automatically assume that everyone has the same understanding of need to be defined and translated before sharing them in conscious level. The common sense in a particular community or an organization is a derivative of their fundamental values and principles actually practiced by all the members of the community or an organization, not the values and principles that many organization claim to be theirs on the surface. But again, the actual values and principles of an organization are unspoken and unconsciously assumed in most cases.

In the light of the nature of what we call a common sense,  we have to bring to light the gap between the basic values and the principles actually practice and what the organization claim to be theirs. And then, you can  redefine the common sense and its languages in conscious level. Once the common understanding about the common sense and its languages (principles, values and strategy of an organization) are established among the members of an organization in conscious level, the organization is primed to take on any missions to be accomplished.

I know I have said the western style strategy does not work for most of the modern Japanese organizations. But when an organization is primed for the strategy to be applied as a part of the organizational language, it is possible even for the typical Japanese organizations to produce sustainable performance. The important point here is that the strategy is an organizational language instead of a complex management initiatives and their guiding processes. 

What's strategy got to do with it ? Part 2

Continuing from the last post.....

I have concluded in the last post that western style strategy is not worth much for the typical Japanese organization due to some fundamental differences in our ways of thinking and how the organization function as compared to that of the Western ways.

So, what is the Japanese way of strategy, if there is such a thing ? Originally, it was not more than an extension of common sense combined with the collective wisdom and experiences.  Then the highly articulated and systematized concepts were imported from Sui Dynasty and Tang Dynasty in China region. They are what we call 兵法= "Art of War".  The concepts have been adopted and integrated into Japanese culture over the course of the last 1500 years.  However, the modern Japanese businessmen have not been taught anything about 兵法 and its cultural implications, nor have they been taught about our original value system that runs in our vein.

As for the western way of Strategy, In spite of the fact that the modern western business theories including the concept of Strategy and its applications are taught in all Japanese Universities and some of us even have MBA, the western style strategy and its system do not function in most Japanese organization.

This indicates that most of today's businessmen in Japan are  incompetent in both Japanese ways and the western ways. What we have is a strange "Nue" (鵺） organization in "Nue" society. Nue is a ancient Japanese monster having a monkey head, racoon body, tiger's feet, and snake tail. So, how does Nue organization function ? Certainly not by any strategy even though they would have some kind of strategy in place. They have it for the sake of having it.  In case of the organization with charismatic leaders, they go by the instinct of their leaders. Others go by the mood of the organization which is, in most case, not very stable.  The mood is dictated by the unspoken consensus within the organization and anyone attempting to spoil the mood will be silently executed. Either way, strategy is nothing more than an accessory for an organization to justify their behaviors.

Now, If I were right about this, what should the Japanese organizations do then ? Abandon the idea of having any strategy ?  Well, I guess they could if they have a courage to do so.  Suppose they abandoned their strategy from their management process, what could it be the guideline for managing the organization and its businesses ?  To simply put it, "Common sense" should do the job. As a matter of fact, it will do far better job than strategy that does not function anyways.

Managing organization / business with common sense instead of complicated strategy. I think it will relieve organization and its members from the confinement of strategy and empower them to be more creative and effective in many ways.  Are you courageous enough to abandon your strategy ?

In the next post, I am going to get into more details on how Common sense management works for the current organization 2.0 companies and how it could become the stepping stones to become the organization 3.0.

What's strategy got to do with it ? Part 1

If your business failed or performing poorly, would you blame it on your strategy or lack thereof ?
If your business is successful and performing well, is it because of your strategy being effective and well designed ?  I know it is not as simple as yes or no as there are so many variables and elements involved in this issue. Then, let me rephrase my questions.  Do you think the Strategy make such an impact on company's performance to the extent it determines its success or failure ?  Actually, there are numerous cases that have been said to have made the difference between life and death of the businesses such as Fuji Film and Eastman Kodak.  But the fact of the matter was that it was not so much the differences in strategy that made the fatal  difference, but it was the difference in people  who chose their strategy and stuck with it.

You can examine as many cases of success and failures of businesses in the past 100 years as you like, but I bet you a million $, which I do not have, that you will find the same.

So, what's the strategy got to do with the success and the failure of business as we know it ?
Not heck of a lot, particularly for Japanese organization. But why, then, all those consulting firms are so adamant about Strategy being the vital element of the success of any businesses ? Why are there so many books about strategy if it really is not that important ?  Well, as you would have guessed, because it is sellable concept especially to the gullible executives of the world, and all the top academia of the world, such as Harvard, Stanford, Cambridge and so on, sell it to all their students and even give them some prestigious degrees for the price they pay. As a result, everyone need to have strategy of some kind. A highly decorated Doctors and Phds like Robert Caplan who invented Balanced Score Card and the Strategy Map, would tell you just how important to have a sound strategy and even developed tools to design an effective strategy. I do not logically disagree with his theory of strategy as I have worked with him and his company in developing the strategy map and the balanced score card for various major Japanese corporations in the past. But, non of them have stuck with their strategy as we helped them design and implement them. They turned out to be nothing more than a typical make work projects.

To be fair (if it's any consolation to consultants out there), the reason why none of those Japanese companies have succeeded in integrating the beautifully designed and visualized Strategy, which they have paid some significant amount of money for, is due largely to the critical difference in our traditional mental model and the organizational dynamics as compared to that of American, which is based on the framework mentality. This is actually the biggest reason why western style strategy never work for most of Japanese organizations.

So Strategy, especially the western style strategy, works for any organizations other than Japanese organization, right ?  Well, at least, it seems to go far better with western organizations as their mentality and the organizational dynamics are more compatible to it.

I think it is fare to say that any western style strategies are more of a nuisance than a road map to success for typical Japanese organizations.  Does it mean that it is better off for Japanese organization not to have a clearly articulated strategy ? I will get into it in the next post.

Reinventing Japanese Takotsubo Organization - 2

The virus that we imported willfully from the western world in Meiji era and the resulting deformity that lead Japan into the War of the century have been inherited to the post war Takotsubo organizations  and the society of Japan. It was starting all over again like at the time of Meiji Restoration, but with now self initiatives or control this time around as United States  practically did all the restructuring of our society from the constitution to the education systems and literally shoved their ways and value to our life style. They tried to reengineer Japan and it has been proven to be successful. As a matter of fact, they were so successful that we went from the rock bottom  to the economic powerhouse in the world in a matter of 25 years or so.

What most of the world do not know how this miraculous turn around were possible is the same reason how Japan turned herself from being over 100 years behind the western world in technology and with huge debts to boot to be among the best in the world industrial nation in just 35 years.
The same dynamics of Japanese traditional Takotubo system have made the impossible happen not just once but twice even with its degradations and deformity.

As the effects of the virus empowered even further by  the American capitalism and the resulting deformity in our Takotsubo DNA has almost peaked, the time has come to transform the deformed Takotsubo 2.0 to the redesigned and renewed Takotsubo 3.0, which will take Japanology to the next stage of its evolution.

So what does it take for the degraded and deformed Takotsubo to transformed itself onto the next stage of its evolution ?  The very first thing we need to do is to understand the nature of the original Takotsubo and its DNA, and then deepen our self awareness to release its potentials.  But to do that, we must learn to communicate with the deeper part of ourselves. Only then, we can tap into the real potential of the Takotsubo.  And when our communication competence is refined to the point of Communication 3.0, then we will have the most advanced Takotsubo Organization in the history of Japan, which is Japan's original Organization 3.0.