Due to the high cost of stationing Japanese expatriates abroad, many Japanese multinationals would like to bring locally-hired managers into a greater number of higher level positions. There are numerous examples of Japanese firms who have succeeded in whittling down their expatriate ranks by filling key positions with locally-hired executives, with excellent results. In addition to the obvious cost savings, the locally-hired executives are closely in tune with their market’s culture and needs, provide stability (since they will not transfer back to Japan in a couple of years), and also provide an example of career prospects to other locally-hired employees. I believe that, as much as possible, Japanese firms should strive to promote local talent and eliminate unnecessary expatriates, and am delighted to see this as a growing trend.
However, many Japanese firms are experiencing some difficulty when they attempt to localize key management positions – they are not confident in the capabilities of their locally hired managers, not sure if they are ready to take the next step. In some cases, this is simply a result of language and cultural gaps inhibiting the ability to evaluate the local manager’s skills and personality. Yet in other cases, the Japanese concerns about the abilities of their locally hired managers is well-founded.
The reason for this is that one area where training for non-Japanese staff at overseas operations has historically tended to be lacking is management skills. In many firms, this is something that, in the rush of fast growth, has not been given budget or attention. Technical skills may be emphasized at the expense of other topics. In fact, in some Japanese firms virtually no management skills training is offered to locally-hired employees. This is in contrast to the standard practice at American firms, in which every new supervisor is given a special training class, and all managers receive some sort of management skills training on a yearly basis.
Japanese companies like to promote from within, so at many Japanese firms the locally-hired managers have grown up with the company. This practice has many positive aspects, but if it is combined with an absence of training, the result can be a negative one – managers who have learned on the job and thus are competent at the technical aspects of their work, but who have not had sufficient structured opportunities to develop the “soft skills” of management. I have seen examples of Japanese companies operating in the U.S. in which there has never been any management training offered, ever. In companies where there is little or no management skills training, the skills of the managers do indeed tend to be lacking in certain respects, which has various negative effects on the company. One example of this would be turnover. According to polls, the most common reason for Americans to quit their job is a poor relationship with their immediate supervisor. Under-trained managers run the risk of driving away talented subordinates.
The important thing to remember in these situations is that, when little or no training has been offered, it is not the “fault” of the locally hired manager that their skills are not at the same level as a manager at a company where training is offered. It’s the fault of the company that has skimped on training. Japanese firms that are disappointed in the management skills of their locally-hired managers need to first ask themselves “what investment have we made in training this individual?” Presumably, when the employee was hired their skill level was similar to or better than that of other candidates.
Recently, “succession planning” has become a buzzword among Japanese multinationals, a result of the publicity surrounding Toyota’s adoption of it as a key part of its global human resources strategy. Succession planning involves identifying people who have the potential to move into managerial posts in the future, and preparing them for those future roles through training and developmental activities. Taken in this sense, succession planning has always been a feature of the human resource management approach used in Japanese companies for their Japanese staff in Japan. However, use of the English term is associated with a focus on locally-hired staff overseas. As such, succession planning represents a more concerted approach toward career planning and skill development for non-Japanese staff. In the past, the development of non-Japanese staff was entrusted entirely to the overseas operation, with little involvement from headquarters in Japan. Some organizations, particularly larger ones, established training departments or utilized outside consultants, but at many Japanese companies the quantity and quality of training and development has been lower than at local firms. The emphasis on succession planning promises to help remedy this situation.
Succession planning also involves greater involvement from headquarters in the training of overseas staff. As part of these initiatives, many Japanese firms are for the first time creating databases of their high potential overseas staff including information about their skills and experience. This is an important step in recognizing non-Japanese staff as an important resource of the global organization as a whole, rather than just of the subsidiary they were hired by.
For years, many Japanese multinationals have had special training programs for overseas staff to come to Japan to participate in, often more of a reward than intensive training. Those are likely to be expanded significantly in the future, and their depth increased. Also, an increasing number of Japanese firms are bringing non-Japanese employees to work in Japan for stints lasting from two weeks to two years. Such programs, long used by American and European multinationals, are excellent developmental opportunities. Transfer of staff between overseas subsidiaries – for example, rotating a German employee to the United States — is another related practice that is on the rise.
In connection with succession planning initiatives, many Japanese firms are also beefing up their management training offerings at their overseas subsidiaries. Some are even developing courses in conjunction with leading business schools, for their non-Japanese employees to participate in alongside their Japanese counterparts.
The greater attention being paid by Japanese multinational to the skills of locally-hired managers, and to further developing those skills, is a long overdue yet extremely exciting trend.
Japan Intercultural Consulting offers a variety of management skills and leadership training courses designed for locally-hired managers in Japanese companies. We also are experienced at designing and presenting courses for overseas managers who are visiting their parent company for training. Please contact us for further information.
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