This is a summary of the discussions the Third Way Forum had with three groups of future executives within Japan’s automotive, manufacturing, consumer and entertainment industry.  The groups were mixed among the five participating companies in order to combine a large base of insights. Each group presented a summary that describes the challenges, the solution approach and finally the actions needed to realize the proposed solution. The groups were mixed among the five participating companies in order to combine a large base of insights. Each group presented a summary that describes the challenges, the solution approach and finally the actions needed to realize the proposed solution. We summarize the discussions with the Third Way Forum.

Group A – Global Markets

Question: A Global Market Requires New Global Expertise

Challenges

The Japanese population is in severe decline with a low birthrate and a significant, continual increase in retirees, which results in a decrease in key consumer groups that, in turn, means a severe downturn in business in Japan and a decrease in Japanese companies’ competitiveness.

Highly qualified, non-Japanese employees can counter those disturbing trends by increasing diversity, thereby increasing innovative opportunities, broaden business knowledge and expand expertise.

But non-Japanese have some major concerns, such as no clear reasoning for being hired, no clear career path, and cultural differences that can lead to misunderstandings and poor performance because of language differences and company methods of operations.

Solutions

How can Japanese companies attract and retain non-Japanese talent?

The company must build a robust, step-by-step HR plan around career development opportunities and set communication rules to remove the cultural barriers. The company should also focus on “Transparency” & “Clarity” in the workplace by clearly defining a company’s vision, missions, and values. The company, too, has to define communication rules at the corporate level, team level, and the individual.

Actions

The company needs to take immediate and continuing action in order to fulfill the goal of being a global entity. The company can do this by integrating “Diversity” into the corporate culture through training programs. The company should also immediately create detailed job descriptions, thus assuring the right person for the right job. Directly connected is a transparent career development that concisely and clearly chart out a potential career path for each employee. In addition is a global rotational program for both Japanese, and non-Japanese managers, which results in a much more diversified workplace.

Group B – Diversity in Teams

Question: Does diversity empower teamwork?

Challenges

Diversity serves to empower a team, and therefore, empowers the company. A good company has 3 core values of openness, clearness, and trustfulness.

Non-Japanese workers indicated the Japanese business culture is unclear and unfair, due to high context, agreement-driven communication, and opaque criteria for promotion or career growth.

Solutions

There must be more transparency, more openness, clearness and trust in all areas of business operations. The company must take strong action towards inclusiveness by re-defining the core values of the company that assures the integration of diversity as a corporate norm. The company must also, actively train and enlighten employees towards diversity. This will lead the company towards autonomy…, meaning the individual’s quality, expertise and productivity is paramount, recognized, and utilized.

Actions

The company must immediately begin and facilitate open discussions, specifically in internal meetings. This can be accomplished by creating a meeting template that clearly specifies where, agenda, purpose, attendees, and goals (maximum 3) of the meeting. The company must also set and implement meeting protocols that demand the participation of each member.

The company must be transparent in the decision-making process…, a chain of command and an e-approval system must be established and published. That enables relevant employees to trace the progress of decisions and provide step-by-step alternatives to appeal a decision.

By incorporating the above, the working environment will be much more comfortable, thereby supporting each employee and creating a positive, solution-oriented atmosphere that supports and inspires teamwork.

Group C – Can, Must, and Will Attitude

Question: How to better utilize non-Japanese employees,

Challenges

In order to ascertain the challenges and concerns in how to utilize non-Japanese employees better, interviews were conducted, and data was collected and analyzed. We identified two issues, the personnel system and rules and co-workers.

With regard to personnel systems and rules, companies have unclear expectations that make it impossible for both Japanese and non-Japanese employees to realize hoped-for workplace positions, as well as what is required of the employee to succeed and advance. There are also unclear company intentions on how to utilize non-Japanese employees best and unclear career paths for each employee.

There are also problems with co-workers that result in a lack of psychological safety. Poor company understanding of non-Japanese cultural differences results in difficulties in communication between staff and supervisors, further impeding productivity and making the workplace uncomfortable.

Three areas need to be considered, Can, Must, and Will. Can means the individual’s capabilities — knowledge and skills, and performance. The “Can” area seems to present almost no concerns as specific knowledge and skills are identified during the hiring process.

“Must” means required company duties, rules and responsibilities for the employee. Here, the personnel system and rules mismatch the employee to the job that results in an uncertain career path.

Will means the individual’s willingness, motivation and desire to take action. This is affected by misunderstanding diversity that can lead to employee hesitancy to discuss problems with the supervisor.

Solutions

The company should create policies that support a personnel system in which diversity and inclusion are welcomed. Cross-cultural understanding must be promoted through a wide variety of activities designed to improve awareness and appreciation for a diverse workforce.  With better acceptance and trust, employees will feel encouraged to develop and progress based upon a positive work environment.

For foreigners, mentoring, a clear career path, and employment by occupation and job description.

For all employees, promote intercultural understanding through training, managers dispatched overseas, and the appointment of foreign managers to Japan offices.

Action

Immediate action could be to incorporate diversity into the management philosophy, create clear job descriptions, and clarify career paths.

Action that will take a larger investment of time would be the overseas dispatching of managers, the appointment of foreign managers to Japan offices, the establishing of a mentoring system, and cross-cultural training.

Each of the actions will require constant monitoring and refining in order to assure the systems continually evolve and improve.