Terrie's Job Tips -- Getting a Second Opinion, Part III: Foreign Start-ups and Joint Ventures

Apart from small companies, the other type of foreign firm that has trouble doing balanced interviewing is the start-up subsidiary or fresh joint venture of a major firm overseas. Not only are these companies hampered by the tyranny of distance, and in particular the remoteness of their HR recruiting professionals, they also have the challenge of cultural differences.

When a company is getting started in Japan, the first person it will usually hire is a CEO, a country manager (the CEO being one of the senior managers back in the head office), or a sales manager to run the branch office. All of these positions are powerful in that this person will solely represent the company in Japan for a period of time. They will be entrusted with money, the responsibility of hiring other staff, making leases and contracts, promising terms when doing deals, and a number of other sensitive activities. And yet, frequently the foreign firm barely knows them!

This is clearly a time when the foreign company has to take measures to reduce its risks. Either the company has to check its candidate very carefully and hope that it doesn’t get a lemon, or better still find a trusted local expert in Japan, who can keep an eye on the new recruit and who has sufficient authority to keep things on track. This expert could be a lawyer, a consultant, or a local businessperson who is not connected to the new company.

Let’s look at the importance of a second opinion in both activities.

1. Hiring
Usually the task of hiring a Japan CEO/country manager falls to the VP of international sales or someone else responsible for Asia. This person is typically extremely busy, and after the board decides to set up in Japan, the VP will contact a global recruiter to have them get some candidates ready for interviews when the VP next travels to Asia. The recruiter will then charge an expensive six-month retainer, plus a success fee, and line up some candidates from “reliable” sources. In the IT business, this means finding a manager who works/worked for IBM Japan and has good English-language skills. In banking it would be someone who worked for a small European operation, and in private equity it would be an ex-employee of GE or a major consulting firm.

The reason why international recruiters focus on IBM, European banks, GE, and the consulting firms is because they know that those companies work their employees hard, have excellent training programs, and, most importantly, the bulk of managers have a good grasp of English, or else they wouldn’t have been able to work their way up the corporate ladder.

And herein lies the first trap for new foreign players. Your best CEO/country manager candidate is not necessarily going to be the best English speaker. No matter how charming and urbane a candidate is in your language, if they don’t have a strong track record of achievement and a top-rate personal network, then you may as well hire a well-trained parrot. I have seen many instances of strong communicators getting top foreign jobs, and their lack of business acumen only becoming obvious some years later.

To avoid falling into this trap, you need someone with long-term experience on the ground to vet your candidate, and tell you what your smooth talking, JPY 40-million-a-year candidate is really worth. You may still decide to hire the person, but at least you’ll know that you will need to implement my suggested second phase of oversight...

2. Back-stopping
One way to take the risk out of hiring a CEO/country manager is to have an experienced, trusted third party sit on your Japan board and provide oversight and/or feedback on your new senior manager. In fact, you could go one step further and not even hire a new candidate for the CEO position initially, but instead make them a sales manager (if you’re a small operation) or CEO-designate. Then give them a one-year probation to prove themselves. The fact that there is someone watching their work (and so long as your “watcher” plays his/her role sympathetically yet solidly) means that the new manager will work harder to earn their stripes. They will be less likely to take short cuts or start to engage in crony hiring, dubious sales, and other problems that can creep in without proper checks and balances.

While the new senior manager won’t like having a watchdog, a skilled external board member can actually help them feel positive about the arrangement by offering to facilitate communications with the head office, as well as providing some coaching on how to be successful with the foreign firm. Now, a lot of this is stuff that the new manager will already know, but nonetheless it is human nature for them to like the idea of having a potential ally close at hand – even though the watcher’s main job is to audit their performance.