Doing business in Japan information
by Venture Japan
When starting business in Japan, executive search and recruitment of your Japanese subsidiary company President (or Japan branch-office Representative Manager) is probably the most critical decision you will ever make affecting your success. Give your executive search firm or head hunter the wrong candidate profile and recruit the wrong person and within 12 months you may be watching in disbelief as your Japanese business expenses skyrocket yet the revenues you earn doing business in Japan stay firmly glued to zero. If your Japanese subsidiary is a distributor support office, you may even have open rebellion erupt as your Japanese distributor becomes increasingly frustrated, refuses to deal with the subsidiary President and instead demands to deal directly with your head-office executives. I experienced just such a scenario occur between two very well known Japanese and US companies about 8 years ago and know of several others.
Use the right executive search firm and recruit the right person for your Japanese subsidiary company President and you will have an efficient, responsive and aggressive business in Japan with excellent customer (or distributor) relations and costs that are proportional to the revenue generated. The right recruit will deliver quantifiable value from the first year of operations and very likely make the subsidiary profitable in that first year. Recruit the right President and your Japanese company will become a star performer in your global operations and be contributing a strong and sustainable cash flow, very likely accounting for 30% or more of your global profits, within 3 - 5 years of starting business in Japan.
Yet when searching for their Japanese company President, many foreign companies, including some that put huge resources into hiring their head-office executives, will recruit almost the first bilingual executive found by the executive search firm or head hunter who "..seems to fit the spot..". Whether the hasty decision is due to head hunter and executive search firm pressure or whether it is simply because the Japanese market "feels so different" I do not know, but it often seems to be the case. For some reason though foreign firms setting up in Japan become obsessed with candidates' language ability; Japanese language ability if the candidate is not a native Japanese and English language ability if the candidate is a native Japanese. I am continually amazed by many supposedly leading executive search firms who are equally obsessed with a candidate's language skill irrespective of his/her business ability.
While it may be a relief in the 'cultural wilderness' of kanji and the Japanese language to suddenly come across a candidate who creates a great impression and is able to chat away about the intricacies of Japanese business culture, etiquette (and maybe even baseball) in perfect English, remember that you are recruiting someone to aggressively build your business in Japan, not to give in-house language training. In my experience, a successful Japanese subsidiary will generate 30%, maybe as much as 60% (as is the case for Louis Vuitton, Chanel, Prada etc.) of your global profits. That is a massive responsibility and the Japanese subsidiary company President is a key officer position within your global organization. Most of those foreign companies that fail in Japan (while succeeding elsewhere) fail simply because they recruited the wrong person for that position. I look to Carlos Ghosn, who speaks hardly a word of Japanese, yet turned Nissan around in 5 years.
So next lets take a look at the relative merits of using one of Japan's many executive search firms or head hunters to locally recruit a Japanese national or expatriating one of your head-office executives, to become your Japanese subsidiary company President.
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