TT-744 -- Why Finding a Good Country Manager is Hard, e-biz news from Japan

An Insider's comments on Japan's high tech business world
* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, Feb 16, 2014, Issue No. 744


- What's New -- Why Finding a Good Country Manager is Hard
- News -- Record cesium levels at Fukushima plant
- Web Content/Tech Job Vacancies
- Upcoming Events
- Corrections/Feedback -- we goofed on 2016 election
- Travel Picks -- Off the Beaten Track in Kyoto, Cherry Blossoms in Ueno
- News Credits

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In the last few weeks, we have been approached by a number of foreign
firms who are encouraged by the news of success of Abenomics and
therefore are looking to start up or expand here. While it is not our
job to opine to clients that we think Abenomics' recent success is
almost entirely based on April's increase in the consumption tax and
that it is only natural for people to buy durables and luxury goods
now, we do nonetheless counsel them to make a long-term commitment to
Japan. Nothing is easy to do here, and only companies with vision,
stamina, and resources can expect to last the first tough 3-5 years.
Of course the rewards for doing well in Japan are enormous and can be
very long-lasting and far-reaching. It isn't unusual for foreign
companies tempered in the tough Japanese market to incorporate the
lessons learned and thereafter bolster their operations in other
markets as well.

At the same time as receiving requests for advice on starting up, we
have also been receiving requests from companies who are already
operating here but who are not getting the results they had hoped for
from their Country Managers. As most readers will appreciate, the
Country Manager of a foreign company starting up in Japan is more than
just a manager, he/she also has to be an entrepreneur. This produces a
big DISCONNECT for most foreign market entrants and their recruiting
companies. How many times have we seen candidates being reviewed for
their industry connections and corporate management experience, when
in fact they are mostly going to have to be salespeople and run the
minutiae of a new business for the first 3-5 years? No wonder the
failure rate is so high.

If you look at a simplified list of the top traits for a successful
corporate manager versus one for a start-up manager (aka
entrepreneur), you quickly start to see where the disconnect lies:

=> Successful corporate manager in any country
(List derived from article by Dr. Phelan of

1. Vision: Ability to focus on the vision and to communicate that
vision to stakeholders.
2. Overview: Awareness of operational details, however, not involved with them.
3. Technical Skill: On top of industry trends -- an avid reader.
4. Recruiting: Hires strong management teams and supports their decisions.
5. Networking: Meets with customers and can articulate customer needs,
challenges and business goals.

To this for Japan we would add:
6. Stakeholder Management: Careful management of key relationships in
parent companies and one's "old boy" network.
7. Failure Management: Careful management of one's failures (i.e., not
to have them, generally through risk aversion).

=> Successful entrepreneur
(List derived from Success magazine)

1. Flexibility and Risk-taking: Start-ups need to be able to radically
alter or throw out business plans and start again.
2. Focus: Ability to allocate one's time specifically to activities
that support success of the business.
3. Decisiveness: Ability to quickly make commitments and move the
company forward, learning from mistakes as they are made
4. Persistence: Willingness to roll up one's sleeves and hack through challenges
5. Passion/Vision: Ability to instill in your team a dream that will
excite them and given them passion.
6. Salesmanship: Great start-up leaders are always selling, to
employees, investors, partners and customers

[Continued below...]

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* If you are a video journalist, then you will also be assigned a
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For more information, go to:

[...Article continues]

From these two lists, we can see some obvious challenges when hiring
Japanese Country Managers:

1. Flexibility is an important trait for dealing with challenges when
you're an entrepreneur, but for most corporate types it means eventual
accusations of lack of ability or effort. This is an issue on both
sides, firstly by the local hire who has previously had years to
execute a business plan and who is not expecting to get fired if
things don't work as expected. An experienced, internationalized, and
desirable manager understands the ego politics practiced by many
larger multinationals and will be looking very hard at the
Japan-launch business plan to see if is a slam-dunk or not. If not,
then he/she will be unlikely to want to switch gears midway through
and play things by ear -- it's just too risky for his/her career. For
this reason, capable/proven Japanese candidates often seem inflexible
in trying new ideas and this makes it difficult for foreign start-ups
to test the market with several different approaches to see what

2. Decisiveness is not a trait that is highly valued in
consensus-driven corporate Japan. Most candidates will have learned in
Japanese corporations that if they can't get consensus then they will
sit on a problem and let it fester. This clearly won't play well with
foreign firms, where being seen to take action and be assertive are as
important as being right about an issue. So either you look for a
strong personality (which will not necessarily manifest itself in a
polite candidate interview in English) or you need to give your new
Country Manager access to a consensus-based decision-making group that
is responsive -- hard to do for a multinational that doesn't know much
about Japan or the Japanese market -- but which is achievable by
appointing a board of advisors that is trusted by the Head Office.
We're always surprised that more foreign firms don't hire a board of
knowledgeable advisors.

3. Salesmanship. Many Japanese CEOs appointees see themselves as
having "arrived" status-wise when they transition to a high-paid job
in a foreign firm, and are reluctant to roll up their sleeves and hit
the pavements again. The higher paid and better regarded they are in
their industry, the less likely they are to want to do daily sales
work. This kind of attitude is irritating, but if the candidate has an
amazing personal network and is able to leverage the efforts of
others, they may still be desirable. But for you to hire a person like
this, you'd better be ready to back them up with a lot of cash,
because they will need personal assistants, financial people, Sales
Managers, a bunch of sales staff, and three years of losses before the
team starts to become profitable.

Why is it so difficult to find a good start-up level Japanese Country Manager?

There are a number of contributing factors to candidate scarcity, but
we believe the strongest are: i) social pressure, ii) limited base of
bilinguals, and iii) risk aversion.

1. Social Pressure: Capable Japanese employees are usually well
engaged in their existing jobs where they are
emotionally/intellectually locked into their peer group thanks to
their employers' efficient indoctrination process. There is a reason
that Japanese firms are often the primary social focus for their
employees (versus the home and family for other nationalities).
Japanese companies well understand the need to own their employee's
thoughts and feelings, and use social values and peer group habits
(e.g., drinking and holidays together) born in the education system to
pressure employees to stay in the "family". We've lost count of the
number of great job candidates we've interviewed who in the end
decided to stay with a highly-demanding underpaid job because they
felt a high level of responsibility to the organization and their

2. Limited language base: This is a well-known problem, and one that
can only be resolved when schools figure out that the current system
makes kids "hate" English and causes them to not want to use it again
unless they really have to.

3. Risk Aversion: This is a really interesting topic area, and we
think is the largest contributor to the lack of decent Country Manager
candidates in the Japanese marketplace, not just for foreign firms but
for Japanese start-ups as well. Babson College, Massachusetts, USA,
has a well-known entrepreneurship program which annually produces the
Global Entrepreneurship Monitor (GEM). According to the 2013 issue of
GEM,, the Japanese
were notable for their lack of interest in entrepreneurship (just 4%)
and fear of failure (second highest, at 49.3%). We think these figures
tell the story pretty well.

a) Fear of failure: Vietnam (56.7%), then Japan/Thailand/Greece
(49.3%)... USA (31.1%)
b) Entrepreneurial intentions: Japan (4%), Malaysia (11.8%), S. Korea
(12%)... USA (12.2%)
c) Perceived opportunities to start a company: Japan (7.6%), S. Korea
(12.7%)... USA (47.2%)
d) Entrepreneurship as a career choice: Puerto Rico (17.9%), Japan
(31.3%)... USA (n.a.), Canada (60.6%)
e) New business ownership rate: Italy (1.1%), Suriname (1.2%), Japan
(1.5%)... USA (3.7%)

So how to overcome these negative factors and increase one's chances
of success in hiring a Country Manager?

We would suggest eliminating the three factors for candidate scarcity
that are mentioned above. For social pressure, the only way to secure
a strong candidate is to keep working on them. Someone worth having is
generally not on the job market, and has to be head hunted. Therefore,
identifying them means meeting them in normal business situations
where you can assess their performance in their current job. Trade
shows, business organizations, trade/technical associations,
educational networks, and simply asking vendors to compete on projects
(so you can meet their teams) are all good ways to find someone. Then,
once identified, you need to find out if their employer is abusive
(most are -- it's part of the hangover from feudal times) and this is
your point of leverage to winkle them out. A good candidate will take
3-6 meetings over a 6-12 month period, to pull.

For risk aversion, a good strategy is to put a CEO candidate in a less
risky role temporarily. We often recommend that companies hire future
Country Managers as Sales Managers first and tell them that if they do
well, they can expect to eventually get the top job. This approach can
work if your firm sees sales as one of the initial key activities (our
guess is that at least 90% of foreign entrants have this objective),
and let the person prove that they have what it takes. While waiting
for them to perform, you can simply hire in an interim CEO, who
provides part-time and fairly "hands-off" management of the Sales
Manager. Key to this strategy is that the Sales Manager's job
description has to have them hiring and managing the rest of the team
and having some responsibility for financial aspects, so that you are
preparing them for the top job later.

For language, you might consider hiring a Country Manager who is not a
bilingual. While this might sound like a recipe for disaster at
headquarters when board room presentations are necessary, it can be
resolved if the company has an Asia-Pacific director who can handle
the board and who is either multilingual themselves or who is flexible
enough to work with the Country Manager through an interpreter (who
should NOT be one of the members of the staff -- since this undermines
the Country Manager's authority). We should also recognize that what
is considered "not bilingual" is not necessarily as limiting as one
would think. For example, most Japanese professionals are quite
capable of handling English-language email, so long as you can
remember to supplement verbal interchange on a frequent basis as well.
Not being able to talk directly to your employee is of course not
desirable, but it is interesting that in many big and successful
foreign companies making money in Japan, by virtue of time and local
job promotions, eventually non-bilinguals who are otherwise
high-performers wind up in those positions and the foreign firms learn
to live with it. Profits are not always convenient.

...The information janitors/


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+++ NEWS

- Japan Display to do JPY400bn IPO
- Rakuten to buy Viber
- Women in senior government posts rises to 3%
- AirAsia ready to take another shot at Japan
- Record cesium levels at Fukushima plant

=> Japan Display to do JPY400bn IPO

In one of the few successful turn-around stories for Japanese
electronics companies in recent times, Japan Display Inc., a company
amalgamated from the loss-making subsidiaries of Hitachi, Toshiba, and
Sony, has said that it is planning to IPO this year. The listing is
expected to raise up to JPY400bn for the company, which is the world's
biggest maker of displays for mobile devices and which is a major
supplier to Apple. Japan Display says that about 30% of its revenue
comes from Apple, which likes their products because of their power
efficiency and reliability. (Source: TT commentary from, Feb
14, 2014)

=> Rakuten to buy Viber

Continuing its strategy of expanding abroad by acquisition, the wisdom
of which is not yet proven, Rakuten is shaking up the internet phone
business by announcing that it will buy Cyprus-based Viber for
US$900m. Cyprus??? Well, actually, Viber is Israeli, but based in
Cyprus for tax reasons. Rakuten says that with 280m users globally,
Viber will provide the firm with a platform that allows the company to
host content, much the same as Line and Facebook do today. However, as
others are saying (read the Haaretz site comments from the link
below), there is substantial doubt as to whether Viber is worth
US$100m let alone US$1bn. ***Ed: Perhaps a hint to the motivation
behind the deal is the fact that the advising financial party for
Viber was Goldman Sachs, Mikitani's old employer and occasional funder
of choice...** (Source: TT commentary from and from, Feb 14, 2014)

=> Women in senior government posts rises to 3%

The latest numbers on government employment reveal that for the first
time 3% of senior government jobs are now occupied by women, the
highest level of appointments since the statistics began. While
trending up, the figure is still distantly behind that of other
developed nations (in 2010 43% in USA and 35.7% in U.K.), and the
government says that it intends to increase the number to 5% by 2015.
Specifically, women were appointed to 287 of the 9,691 senior posts in
central government as of last October, up by 28 from the start of the
year. ***Ed: Clearly the rate of appointments will have to move
forward pretty quickly if they are to hit that 5% target...** (Source:
TT commentary from, Feb 15, 2014)

=> AirAsia ready to take another shot at Japan

It is said that one of the defining characteristics of successful
entrepreneurs is persistence, and that is certainly the case for the
CEO of Air Asia, Tony Fernandez. He announced in a news interview that
he is in the final stages of deciding on partners and top executives
for a new discount airline he plans to launch in Japan, in competition
to ANA and others. Fernandez won't announce the names as yet, but has
said that it will start the new airline next year with more than
US$70m of capital, and his company will own 33% of the voting rights.
It is likely to serve Nagoya and Osaka rather than Tokyo, due to Air
Asia's previous inability to gain access to Haneda and the
undesirability of working out of Narita. (Source: TT commentary from, Feb 14, 2014)

=> Record cesium levels at Fukushima plant

Tokyo Electric Power Company (TEPCO) has said that one of its test
wells is producing a record high and apparently increasing levels of
radiation (37,000 becquerels of cesium-134 and 93,000 becquerels of
cesium-137 per liter of groundwater), up from the 76,000 becquerels of
cesium-137 detected on February 12. The well is about 50m from the sea
wall, and TEPCO is at a loss to explain the increasing radiation
levels. Experts think it might be water leaking from an underground
tunnel located near Reactor No. 2. ***Ed: Our take is that there is
direct contact (leak or otherwise) between the coria of Reactor No.
Two and the groundwater, not merely some secondary source.** (Source:
TT commentary from, Feb 15, 2014)

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the



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------------------ ICA Event - February 20th-------------------

Speaker: Tish Robinson, Professor of Organizational Behavior at
Hitotsubashi University ICS
Title: "Workshop - Speak Out!!! Don't Freak out!!!"

Details: Complete event details at

Date: Thursday, February 20th, 2014
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No
sign ups at the door!!!!!!!
RSVP: RSVP by 10am on Monday 17th February, 2014. Venue is The Foreign
Correspondents' Club of Japan.



=> Many thanks to the many readers who wrote in to tell us that the
U.S. Presidential elections are actually scheduled for 2016, not 2015.
That's the problem with email, you get to see our goofs as they
happen... :-)



=> Tofuku-ji's Hojo Garden, Kyoto
East Garden: Columns depicting the Big Dipper

Tofuku-ji Temple in Higashiyama boasts the largest building complex in
Kyoto. It took over 19 years to complete all of the temple facilities,
from 1236 to 1255. The temple grounds stretch out over a river, making
use of three bridges. In autumn, the view of the colorful leaves
attracts people from all over Japan. Everyone rushes to Tsuten-kyo
Bridge to see them. But I would like to introduce a nice spot for
enjoying the autumn leaves, and a beautiful Japanese garden at the
same time, away from the crowds.

When coming into the temple grounds through Nio-mon Gate, cross
Gaun-kyo Bridge and turn left. Most people will be waiting in a long
line at the entrance of Tsuten-kyo Bridge in autumn. Instead, pass
them by and walk straight towards the main hall (Hon-do Hall). To the
left of it is the entrance to Hojo Garden. There are four dry gardens
surrounding the Hojo building. A small wooden corridor/terrace faces a
valley that is filled with trees covered by fantastic red leaves. On
the day I visited, Tsuten-kyo Bridge was packed with hundreds of
people, but from this terrace, we could take our time and view the
autumn foliage in a very relaxed atmosphere. In addition, there are
the four gardens here, all uniquely Japanese-modern.

=> Cherry Blossoms at Ueno Park, Tokyo
Enjoy the 'Hanami' experience among 1,200 magical trees

The much-anticipated cherry blossom forecast is out! Have you decided
on where you would like to view the beautiful and delicate "Sakura"
blossoms in their full glory? Consider Ueno Park located in central
Tokyo! Approximately 1,200 cherry trees will flourish with pink
magical flowers at the 133-acre park. An estimated 2 million people
will visit Ueno Park to experience "Hanami" or cherry blossom viewing
while picnicking directly beneath the trees. Sadly, the blossoms are
only in bloom for a brief two-week window, therefore you need to
secure a spot early on, or simply walk through, admiring the natural
beauty along the paths and taking photos. Conveniently located across
the street from JR Ueno Station, entry to the park is free.

There are a variety of cherry trees at Ueno Park, with the most common
being Somei-Yoshino cherry lined within the center of the park. When
is the best time to go? Well, Japan considers a region to be in bloom
when at least five or six flowers can be counted on its cherry trees.
When 80 percent of the trees flowers have opened, typically a few days
later, the area is officially designated as in "full bloom," and this
is the prime time for blossom gazing and revelry. According to the
Japan Weather Association, flowering is expected to begin March 29,



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