Viewpoints : Japanese Management: Good...

Unlike Gary, who went afoul of Sony’s personnel department, I was specifically assigned to work with it, and found it obliging, open and powerful. Gary got dismissed with his impolitic behavior. I got the “open kimono” because my agenda was to study, not stand in judgment.

To counterpoint Gary, I found nothing egregious about Japanese executives’ being reassigned to a new job on short notice. Japanese practices are not unique; they simply lag behind the United States by some 20 to 30 years. I recall very clearly a cold Midwestern night in 1959 when my father (an upwardly mobile corporate executive) came home to say that on Monday, we could, if we chose, get promoted to Atlanta. My mother, due in two weeks to bear her fifth child, recognized that flexibility and sacrifice would serve her interests well, and immediately tackled the trials ahead. We moved, and prospered.

The lesson is this: In the 1980s’ Japan, as in the 1950s’ United States, those with drive and ambition accept relocation as a price of personal success. The idea that Japanese executives move because they are Kafkaesque automatons ignores the fact that people, then as today, relocate because they want and choose to do so.

Gary complains that the Japanese job rotation produces generalists with “thin knowledge bases” rather than specialists, but the clear fact is that job rotation (the practice of cross-training talent through sales, research, personnel, manufacturing and so on) is a superior management development strategy. The “bench strength” of companies that practice rotation (the most successful U.S., Japanese and European companies) is formidable, with many seasoned managers capable of building cross-disciplinary consensus and fueling the growth engine.

To be sure, at Sony Japan (and Sony U.S.) there are world-class researchers who follow specialist career paths, but the labs are closely linked with the factories (increasingly at Sony U.S.), so they never lose a sense of how to build what they design.

And what about Japanese women? In my time at Sony (1982), the women seemed pretty neatly constrained by what we could call “feudal” career opportunities: teas, telephones, translation and, with luck, marriage to a promising young engineer followed by bearing children.

But this is not very different from U.S. practices of three decades ago, nor European practices today. But times are changing fast everywhere. Recently, a key female marketing talent in a Japanese firm here in Los Angeles flatly refused a transfer back to Osaka. The company, pragmatically (and with few options), altered its plans and course to accommodate this needed talent.

My friend Peter Drucker, just back from his annual consulting tour of Japan, told me recently about the surprisingly rapid (and recent) ascent of women into critical management positions. The lesson here is a simple one: Japanese business is quickly adapting to a global shortage of talent. Today, you discriminate against women at your peril.

WASPish 19th-Century Wall Street once sought to keep out the Irish, Jews, Italians and others, but when trade started to walk new streets, the old-line financial companies adapted or perished. Women on the rise in today’s Japan are a matter of necessity, not virtue.

The lack of free labor market alternatives in Japan is a discredited myth; Japanese do change companies. When I was interviewing my way through Sony headquarters, I met a 28-year-old electronics engineer who confided that he previously worked at a larger electronics company until recruited away by Sony. My friends in the personnel department, confronted with this “un-Japanese” fact, let on that, indeed, Sony would recruit from the outside the talent they couldn’t grow inside. They arranged for me to spend a day with the key managers of Japan’s top personnel placement company, which was growing at a 2,000%-a-year clip in 1982.

Make no mistake, “ostracism” for being “different” is still common in the ferociously competitive internal environment of Japanese firms. The logic is that you grab at anything to get ahead of your internal competition. A friend of mine at Sony wore a mustache at great personal risk, and he opined that his dream was to spend more time in the company of his wife, playing cards and helping out with the children’s education. He was clearly under pressure to conform, but no more so than, say, the pressure that existed for wearing a non-white shirt at 1960 IBM.

Even today, IBMers get ahead by conforming to the competitive rules of internal culture. But should we criticize IBM for lacking “humanistic values?” No. We should praise IBM for creating jobs and providing leadership. By definition, the individual within a corporation makes sacrifices for the common good. Corporations survive because of it. And today, frankly, the under-30 cohort at Sony will talk openly of jumping ship, seeing that the organizational pyramid has flattened across the globe. They are beginning to focus their formidable talent and energy on entrepreneurial opportunities.

So the lesson and challenge to enterprises is that you “ostracize” non-traditional behaviors only if you can afford to lose talent to the growing opportunities outside the company.

Sony was not a worker’s paradise, but the net effects of the Sony system are worth studying and understanding. For example, Sony had a fairly far-reaching “welfare” function within its personnel department. Sony employees got allowances for housing, food, transportation, having children and other needs, as well as health care, retirement funds and an aggressive continuing education program.

Where did the money come from to pay for these? From the sacrifices of the individuals to a pool of collective capital, such that the company also had the financial strength to withstand cyclic downturns, design failures, supplier or customer collapses. Sony worldwide takes great financial hits to avoid laying off people by moving, reassigning, retraining. Nobody mandated or legislated these policies; the company built them on the collective assent and sacrifices of its people.

I take exception to Gary’s conclusion that if you’re not Japanese, you’re out. Certainly the “glass ceiling” for non-Japanese has existed in Japanese companies as it existed for non-Americans in U.S. companies 30 years ago, but as in the United States, it’s proving fast to be a short-sighted policy.

Sony has taken more risks in the United States and Europe than any Japanese company at bringing non-Japanese into key positions. The recent acquisitions of CBS Records and Columbia Pictures were the results of Americans with long tenure and unimpeachable position in Sony America. They earned both real power and real enemies within Sony headquarters in Japan.

Other Japanese companies that take fewer risks look enviously to Sony’s successes (and failures) at localizing their top management. Globally, the caldron of change and power transfer is churning rapidly, such that those who will not adapt are in for trouble, whereas the flexible adaptive enterprise--of whatever nation of origin--will inherit the future.