Individual decision making vs group consensus

While American culture empowers individual decision making, Japanese culture abhors this kind of autonomy, favoring group consensus instead. This difference is most prominent when a US business person asks a Japanese counterpart his/her opinion on a specific new idea or proposal. It is all but guaranteed that the response will be some version of “well I don’t know” followed by an uncomfortable laugh or giggle. Avoid making the Japanese uncomfortable by using a phrase such as, “perhaps your company can consider XYZ – please introduce this idea and we can talk again later”. For Example, we are in the last step of concluding an Option Agreement with a Japanese company for a medical device developed by a US company. The US company still needs to complete a fairly large US clinical study which made the Japanese company reluctant to move to a full license. When we discussed the Option idea I used language such as, “I don’t know if this is a good idea, but perhaps an Option Agreement could make sense – but I’m not sure. Let’s discuss this further, maybe next week.” In other words, acknowledging that the 3 people I was speaking with could not give an opinion. By using language that did not require a conclusive answer I avoided making them feel uncomfortable and we were able to come to terms a couple days later after they circled up with the rest of their team.

Individual Achievement vs Group Achievement

Thinking of one’s individual achievement is something that is unequivocally rejected in Japan from the beginning of childhood. Within the corporate setting, it is literally the kiss of death. Further, in America, it is common to change jobs to advance your career. However, this is not a culturally accepted practice in Japan. Because there is little to no exit for most Japanese employees, they feel compelled not to make a mistake or disobey point #1 above. There is a saying in Japan, “the nail that sticks up gets hammered down”. One of the worst things you can do when meeting with a group, whether it’s a formal business meeting or a dinner environment, is to acknowledge a specific individual as being a ‘star’ or a ‘stand out’. Complementing the whole team is perfectly fine, but never an individual. When I worked in Japan at Nikko/Blackstone’s M&A department, there was one person who clearly was exceptional. US companies would compliment him all the time and it created resentment within the larger group. As a result, he was passed over for promotion more than once.

Direct vs indirect communication

Americans tend to be very direct and not afraid to speak their mind. American culture often interprets an indirect tone or message as being unprepared, unorganized, and maybe even dishonest. However, in Japan, this direct approach will be taken as a direct challenge and even rude to the other person in the conversation. The Japanese often use words like, “maybe” or “I’m not sure” even if they do know the answer in order not to appear brash or a know-it-all. This is a direct result of points 1 & 2 above. They cannot directly comment on your thoughts until the entire group has heard it and agreed. Since the Japanese are uncomfortable providing conclusive answers before group consensus is reached and directly declining requests are considered rude, US companies will often hear, “yes, yes, yes” at a meeting and a week later hearing “no, no, no”. From a US perspective they could easily feel lied to. But that is not the case, the Japan side is simply trying to avoid being rude by saying yes in response to overly direct questions.

Understanding the relationship building process and timelines

One issue that I have run across on several occasions is when a US client hoping to do some type of transaction in Japan will ask to have lunch or dinner with a potential partner early in the process (first or second face-to-face meeting). This is seen as pushy, if not outright rude. A transaction is not an event, it’s a process. Be prepared to be patient.

Gift Giving

Bringing small gifts when visiting a Japanese company was known in the past to be a normal part of business. It is still common among two Japanese companies that have an on-going relationship. However, in today’s society, gift giving has largely gone the way of the Blackberry. In many instances it is seen as creating “giri” which is a sense of obligation – in this case, an undesired obligation. In comparison, after a transaction is closed it is highly recommended to give the same gift to each team member that you worked with.