The importance of internal communications – not telepathy – when japanese companies acquire overseas

It seems that the only opportunity for new business at the moment, for those of us who supply services to Japanese companies, is the continuing wave of Japanese acquisitions. Faced with a saturated, aging market at home and good companies going cheaply overseas, it’s no wonder Japanese companies see acquisitions abroad as a way to revitalize and grow.

Western companies are in the mood to accept new Asian owners, too. Weary of the destruction brought about by Anglo-Saxon capitalism, there is plenty of debate going on in Western business circles as to whether it might not be time for a more long-term, stakeholder-oriented – rather than short-term, shareholder-oriented – way of running companies.

We have, of course, been here before. Japan’s economic success in the 1980s was attributed to Japanese values – lifetime employment, group orientation, taking the long-term view, striving for growth rather than profit and so on. But then in the 1990s those same values were blamed for Japan’s economic failure. The debate as to whether an alternative to the current form of capitalism is truly needed – and whether Confucian capitalism is the best alternative – will no doubt continue. 

While the discussion rumbles on, Japanese companies that have acquired overseas companies face the question of how or how not to adapt their distinctive corporate values and cultures.

Regardless of what path is chosen, many Japanese companies have failed to use a vital tool – internal communications. Case in point: A participant at a seminar I gave at a British company that had been acquired two months earlier by a Japanese company came up to me afterwards, on the verge of tears, to say thank you.

Apparently I was the first person to talk to her team since the acquisition who was able to explain at a deeper level what was going on. The team members felt they had been left in the dark.

Another participant at a different company mentioned to me that the local operation had only found out a vital piece of news about their company through a U.K. trade magazine.

I have lost count of the number of times Europeans working for Japanese companies have complained to me about information being withheld. When I ask them if they had asked Japanese colleagues for this information, it often transpires that they had not, that they expected to be told.

Many Japanese companies do not have internal communications departments. One director of corporate affairs told me that he could find no counterpart at the new owner’s Japan headquarters.

There is an assumption that Japanese employees will pick up corporate strategy and culture through time-honored methods such as ishin denshin, or telepathy. While this assumption cannot, of course, be made for employees who do not work in Japan or who do not speak Japanese, there nevertheless seems to be a fear that translating even innocuous internal documents into English will cause vital secrets to be leaked.

Deliberately leaving it up to employees to work out values and strategies for themselves is itself a corporate value. Once I got used to this, I rather liked it, as it means employees are treated as mature adults. Paradoxically, however, if Japanese companies want to preserve this value as they globalize, it has to be explicitly communicated.

If you are being acquired by a Japanese company, you may be interested in our post merger integration services.
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