Introducing Computer Culture Into Japanese Firms: Practical Tips for IT Managers

by Jem Eskenazi

The Japanese education system is very successful in producing employees who work well in a structured environment -- where success depends on the group, not the individual. This has been the basis of the success of many industries in Japan. In large-scale corporate information technology (IT) programs, however, success depends instead on utilizing the individual intellectual capital of professional experts, encouraging a "can do" attitude, and constantly questioning the status quo.

In this article, Mr. Eskenazi describes some of the unique challenges that face a foreign IT manager in a Japanese company and, based on his own experience as a CIO, suggests some solutions.

Work that involves computer technology often does not fit into traditional business models. Computer experts in the West, for example, suffer from the "nerd" stereotype. While this can be a social liability, these same qualities are also acknowledged and appreciated as the characteristics that make good computer specialists. Thus, information technology (IT) professionals in the West are almost encouraged to develop the nerd image, and the attitude that goes with it.

In a Japanese company, though, where being different is strongly discouraged, this same "computer expert" image and its accompanying creative attitude are stifled. This, in turn, cripples the imagination and lateral thinking necessary to develop innovative but sturdy information systems solutions. Rather than simply controlling the focus of projects, as is often the case in the West, therefore, the IT manager in Japan faces a greater task: building an environment that encourages individual creativity within the traditional milieu of Japanese collaborative strength.

The Japanese corporate model

Japanese personnel departments typically shuffle staff between various departments and functions within the company. This is generally advantageous, since it develops a variety of skills as well as a good understanding of the whole business of the company. For IT organizations, though, this shuffling process can be a disadvantage. Rotating employees may serve a company's overall information needs much better than developing lifelong computer experts who have no experience or interest in running a business for profit, but the fact remains that IT is a specialized technical field.

It is not realistic to expect someone brought in from finance or sales to become an expert in computers after just a few months of immersion in the corporate IT department. True, such persons will soon be able to perform routine duties within the department, but they are unlikely to develop the thorough understanding of IT (especially at the speed with which it is changing nowadays) required of a specialist.

It is true that Japanese companies are changing, becoming more flexible and less traditional -- but the transition is slow. In the meantime, the realization that IT is a strategic competitive and BPR (business process re-engineering) issue is forcing many companies to reexamine their IT operations and find ways of making them more efficient.

How one can manage an IT organization under the conditions described above, and still run a successful operation, is an issue of great importance -- especially for a Western manager recruited to build an efficient IT organization in Japan. Although a manager has more power to change things than a line employee, the Western manager who does not follow certain rules of behavior in Japan will encounter extremely strong passive resistance.

Gaining management buy-in

The first step to successfully managing an IT department in a Japanese company is gaining full support from top management (honbuchô and above). This is not much different from Western companies -- IT operations cannot be successful in any large organization without the explicit support of top management -- but in terms of how IT can ultimately help business in Japan, upper level support is doubly important. If the community within a company feels that top management is not supporting the IT manager, the staff are likely to resist IT initiatives.

In a company with both Japanese and gaijin top managers, it is essential to gain the support of both. Obtaining this support, however, will require quite different strategies for the two. To gain the support of Japanese managers (and of Japanese colleagues), it is extremely important that the Westerner learn and follow Japanese "standard rules of behavior." This need cannot be stressed enough; it is a prerequisite for success. The recalcitrant gaijin soon learns that the attitude of "I should be judged by what I accomplish, not by how I behave" results in not accomplishing much in Japan.

Once the Westerner gains general acceptance from his Japanese top managers, he must confront the issues that every IT manager faces, in Japan or anywhere else. He must convince top management that the IT group is more than just a technical department, and that IT project decisions -- apart from costing considerable amounts of yen -- can have drastic effects both on the way the company operates and on the corporate culture itself.

The convincing process starts with firmly establishing that the IT manager is, above all, a generalist who understands all the various aspects of the business, one who cares about the company's success and competitiveness more than he does about the latest technological developments. This is particularly important in Japanese companies, where the IT department is often considered a mere technical services department, and nothing more.

There are many ways to establish the IT department as a serious strategic presence within the company, but a good first step is to ensure a slot for the IT manager in the Management Committee meetings. This calls for making a well-articulated presentation to the Management Committee about the strategic importance of IT in today's business world -- without mentioning a single technical issue. (This presentation can be reinforced by distributing articles from serious business magazines about successful IT implementations in other companies, both the best in the world and the best in Japan.)

Setting an organizational structure

In North America, it is commonly accepted that the IT head, often called Chief Information Officer (and often at vice president level), reports to top management and not to the Finance Department (as was the case in the early years of computers). The rationale is simple: IT has strategic implications for all the functions of the organization. Unfortunately, in Japan (and, to some extent, in Europe), this principle has been little acknowledged or acted upon. The IT department in a Japanese company most often reports to the head of Finance (or, in some cases, to the General Affairs section).

It will undoubtedly prove extremely difficult, but the IT manager in Japan must try hard to alter the reporting structure so that he reports directly to top management (president or chairman) as head of a division (honbu). Unfortunately, this is likely to happen only in modern-thinking companies that value the strategic importance of IT and realize the merits of flatter organizations.

Securing this reporting line is not merely a question of status; it has two main benefits. First, it offers access to a global strategic vision of the company, something the head of Finance cannot necessarily provide. (From this perspective, not only reporting to a top manager, but also participating in all Management Committee meetings and discussions becomes paramount.) Second, this reporting line gives a message to the whole organization that IT is no longer just a technical issue. Placed at a honbuchô level, the manager of an IT Division, by definition, carries knowledge of and responsibilities for the company's main objectives that an information systems administrator does not.

A problem with this reporting line is that it is still rare, particularly in Japan, to find a chairman or president who understands in detail the issues related to modern IT applications. Unless the IT head is lucky enough to report to an IT-enlightened boss, it is essential that he secure one of the following two situations: either the boss leaves all strategic IT decisions to the head of IT and only approves project budgets, or he shows a genuine interest in modern IT issues and makes a point of studying in detail all the proposals from the IT head with as much concern as those from Finance, Marketing, etc.

The IT head must take great care to articulate and present projects in a coherent manner that emphasizes their contribution to the strategic objectives of the company. The pitfall to be avoided is having major proposals swept aside as "too complicated," "too expensive," or "too heavy" by a management team that has not been able to grasp a thorough understanding of the issues.

Flattening the hierarchy

When the support of top management has been secured, a proper structure for the IT department (or division) is key to the success of the operation. How can the IT head make sure that inherent cultural weaknesses (the Japanese education system, conformism, inter-department transfers, and the hierarchical corporate structure) do not hinder the formation of an efficient IT organization? There is no magical answer, but two factors are paramount: flattening the hierarchy, and attracting the best people.

Hierarchies are a fact of life in most Japanese companies, but the "rules" are slowly being relaxed. A few companies have even taken the step of eliminating the kachô level completely. Most companies will take a long time to reach this stage, but the IT head should try, at the very least, to do it within the IT department. (Depending on the company culture, this could be a very difficult accomplishment.)

A first step is to convince a few key and influential people within the group why this would be a good idea. It is important to explain that, as opposed to other functions within the company, IT is an area where the youngest often have the most expertise, and their skills should be allowed to come out freely without being lost in layers of hierarchy. Then explain that IT is a specialized field, one where strict schedules, hierarchies, and authorization procedures will stifle creativity and prevent keeping up with developments in a fast-changing industry. (Giving examples from world-class IT organizations in respected companies can help.)

In a big IT department of hundreds of people, of course, a totally flat organization might not be realistic. Yet, the number of subgroups should be kept to a minimum, and communication between the subgroups should be carried out through the methods described below. Depending on the situation, and the goodwill of the people involved, up to fifty people might be within one flat organization. While temporary teams for specific projects will naturally form and dissolve within or across the subgroups, it is important not to make this a formal procedure.

The next step is to implement an information infrastructure (for instance, with Lotus Notes) to share information about ongoing projects, time schedules, problem and solution databases, and meeting reports -- and, of course, to implement communication by electronic mail. IT people are much more likely to get used to this kind of information infrastructure than the typical white collar worker. Through such a system, decisions in all areas (including purchase decisions, business trip requests, and vacation authorizations) can be made quickly.

The information databases should contain areas where ideas are discussed and suggestions made. This information sharing can be complemented by a weekly meeting that includes the whole group (with a rotating chairperson) -- a meeting not to disseminate more information, but rather to discuss open issues. Both in the databases and in the meetings, it should be clearly understood by all that opinions can be clearly expressed without regard to seniority. The role of the IT head will be to define direction (and even that with consensus) rather than to tell people how to do things in detail.

What has been described above will take months to implement. It is very important in a Japanese company not to force this new loose structure, but rather to move into it smoothly and let people discover by themselves that it works. IT staff are a lot more likely to see the benefits: this structure allows them not only to utilize their expertise fully, but it has the additional benefit of experimenting with modern communication methods and thus developing ideas about deploying them on a larger scale within the company.

Creating user community buy-in

Gaining buy-in from the users within any company requires creating awareness through the patient spreading of ideas about modern information management. In Japanese companies, establishing good human relationships is the first step of this process. The gaijin IT manager, who might be used to the "just get things done" attitude of a Western company, should never underestimate the value of patiently establishing relationships with a large number of staff (through consultations, interviews, and -- of course -- after-hours socializing). Building such relationships, besides ensuring that the manager is accepted by the community, will bring invaluable information about the company's information needs. It will also make the alert manager aware of intra-company political factors that might need to be considered.

As relationships are being established, it is essential to collect the community's views on what applications are required. At the same time, ideas about modern systems have to be disseminated. When it comes to having big (and expensive) projects accepted by top management, it is vital to gain the full understanding and support of the entire community. Even though top management approves a project, if key people have not "bought in," there is likely to be passive resistance. This is especially true if the community does not like certain individuals in top management and sees them as pushing the project onto the company.

In any country, but especially in Japan (considering the relatively low exposure of management personnel to computer applications), projects should be preceded with pilot miniprojects that show the value of the systems to the community. What is clear in the IT manager's mind might be a vague and complicated notion in the normal user's mind. Especially when a big project that will consume considerable amounts of time and money is considered, a small pilot installation to show what the system is all about is essential.

If the computer culture is just being introduced to a company, a few simple, inexpensive-but-attractive applications might be useful. A fun database of employee profiles, for example, with personal information filled in by the employees themselves and accompanied by scanned informal photos, might be just the right thing to get people to use their computer. It gets them typing, helps them learn how to use a particular tool (such as Lotus Notes), and creates a good sense of community. Since it also gives credit to the IT group for having created something fun but useful, any further projects coming from the IT group are likely to be accepted with more ease.

The Japanese have a deserved reputation of being slow in making decisions, but doing an excellent job once the whole group is committed to an idea. The foreign IT manager who considers this as a strength and uses it to the company's advantage, and who takes the time needed to get full support from management and from the user community, will reap excellent rewards in professional success and personal gratification.

Jem Eskenazi is CIO of the Japanese affiliate of a European company.

Choosing and training IT staff

The ideal IT professional combines an excellent understanding of (and interest in) current information technologies with a good grasp of the company's business requirements. The ideal ratio between these two factors will vary with the job: pure "techies" are as necessary in an IT group as project managers. It is the IT head's responsibility to find the right combination, and to balance duties so that solutions are technologically sound and correspond to the company's needs.

In the traditional Japanese company, it is not always possible to choose one's staff, so the IT head must do two things to counteract this: try to recruit enough experts to balance the nonexperts in the group, and put some effort into educating the entire staff. Probably the most important factor that will allow the IT head to select good people is being on very good terms with Personnel -- a powerful and influential department in most Japanese organizations. (This has to start from the very beginning; it will take a long time and require genuine sincerity.) If relations are friendly, the IT head will be able to convince Personnel to place newcomers with IT skills in the IT group, to transfer people who have an interest in IT to the group from other functions in the company, and to hire mid-career IT professionals. With enough professional potential, and with the communication structure described in the article, the weak performers in the group will gradually improve their skills and spirit.

The importance of internal as well as outside training cannot be stressed enough. The best IT professionals learn technical things simply by experimenting with new tools, but not everyone will be able to do so. This makes regular training courses on new technologies essential. These can be supplemented by internal seminars, where one or two people give a presentation on some new IT-related subject to the whole group. This method makes learning active instead of passive, and it creates a harmonious atmosphere within the group. Although the practice will feel strange to Japanese employees at the beginning, they'll quickly warm to the idea and, as anything they put their minds to, do an excellent job of researching and presenting.--JE