Examining Motivational Leadership in Japan

As I work longer and longer in Japan (now almost 1 year and 3 months straight), and all that time for a Japanese company, I am becoming increasingly interested in reading on the current issues faced by firms operating here in regards to human resource management. I have been absorbed and fascinated by (OK, I am an academic nerd!) a recent issue of "President" and also a new book titled "Why Young People Quit in 3 Years: How the Seniority-based Employment System Undermines Japan's Future." (若者はなぜ３年で辞めるのか？年功序列が奪う日本の未来）

Coming from an American, it is perhaps expected that I might be critical of the traditional Japanese employment system, which is based on a combination of seniority and length of service. However, to see and read Japanese commenting on the problems of such a system in today's globalizing world, and discussing the related new paradigms, I now have local resources I can point to when my opinions are dismissed as American ignorance or misunderstanding. Of course, I can justifiably point to my own personal work experience in Japanese companies (almost 5 years). In the end, a person doesn't need to know anything to have an opinion, but I feel that I have over time earned the opinions I have on this subject.

In the newspaper Logistics Japan, there is a column called "Personnel Development into the Future" and on September 14th the topic was "Motivational Leadership." The author is a Mr. Fujimoto, a Japanese management researcher. I have translated the majority of this article from Japanese into English below:

In the employment market, the point at which the phrase "seven-five-three" began being used was from 1999. I think it came from a manager in the Osaka organization called "Youth HelloWork." This group's purpose is to support the employment of youth up to the age of 30. Similar to Young HelloWork, which is set up in different locations, these organizations aim to be "work stabilizers" offering total support for first-time employment seekers and those seeking employment again after the first job. In this process, they focus on matching youth with the right jobs and help with marketing youth to hiring companies. The phrase "seven-five-three" originated from this youth-focused effort.

Quitting Within 3 Years

For those youth that graduate school, find a job and then quit within three years, in Japan it is referred to as a "second graduation." This youth group is said to be derived from approximately 70% of middle school graduates, 50% of high school graduates, and 30% of university graduates--thus the phrase "seven-five-three" or "nana-go-san" in Japanese.

This trend has continued unswayed by economic conditions or changes in the employment market. Those university graduates that quit within three years have rather gradually increased, becoming 35% in 2002.

Considering how this phenomenon is viewed, businessmen from the old era approach it with a strict hand. Below are some of the responses to expect:

• "Of all the reasons, it's a lack of perseverence"
• "It is a lack of seriousness in confronting work"
• "Having been raised being able to get what they want, they don't know how to raise themselves up through effort and hardship"
• "As the saying goes, "patience wins the day;" what are they going to understand in just 1 or 2 years?"
• "Even if the times change, "every rose has its thorn;" they must have a steadfastness and strong will"

However, young people also have a persuasive case:

• "In the past, one would find employment once and then have a protected, stable life via the HR system specific to Japan, defined by lifetime employment and seniority-based system. If each person does their most to sacrifice the individual "for the company," as a group tied to one fate where both the company and employee become better--if that kind of company exists, please let me know..."

Gypsy Movement

The quotes from young people continue:

• "Even if one devotingly gives their all for the company, these days there is a high chance that younger workers are first waiting to see if their company is going to experience a restructuring or M&A scenario. In today's world, it seems that "good company" means a company that strictly evaluates each person on the depths of their individual performance, ability and effort. In order to capture one's dream and potential, it is only natural to seek out that type of company, job-surfing and aiming to raise up one's career"
• "Even if one graduates out of a famous university, employment is not guaranteed. Even if one enters a large company, high promotion or lifetime employment is not guaranteed. Since in this era one can only believe themselves, it cannot be helped that our identification with the organization or group would become weaker. Rather than the question of "where to be placed," we want to search for the workplace where we can raise our own performance via "our own style" as seen by Ichiro--thus this gypsy movement seems inevitable..."

The "second graduation" trend that has come about due to the above change in values and behavior is labeled often by the media as "mismatch" placement.

Expanding on this point, in the USA, the person that will be one's senior at a company is the one that determines the hiring. Once the new hire enters the company, the work contents or responsibility and rewards or rights are clearly defined. Based on this, a contract is written up resulting in fewer mismatches.

Cause is with the Seniors

Many tens of years ago, in order to hire the "cream of the crop," Recruit set-up a special hiring budget of approximately $90k per new hire. For each company to go to these lengths to acquire winning candidates incurs a heavy cost. But an even greater loss occurs if such talent is hired in this way and then lost after less than a 1000 days of employment.

Even considering this issues from the side of youth, after putting in the time and monetary investment of applying to and interviewing with several companies, including taking tests, it is a waste when they quit or change jobs after not seeing the potential of starting a bright future.

I have been involved in a number of companies' new hire research and career advancement activities, and I would say the feeling is that most of the causes behind early retirement (quitting) can be traced back to the seniors. When youth meet their senior(s) for the first time, if they act as sort of "life mentors" and not just "work seniors" then I would expect the young workers' trend of "leaving the front lines" to drop with a thud.

The Youth HelloWork group I mentioned above surveyed a wide number of youth on the question "From the following three types, which would be your ideal senior?" The three types are: 1. Senior with unsurpassed leadership, 2. Senior skilled at his work, and 3. Senior full of humanity.

Most of the answers focused on #3, with further meaning as "someone that can be respected." I think a leader is generally thought of as "someone that moves people," but I would like to modify that and say that a leader should be thought of as "someone who moves peoples' hearts."

From my reading, it is obvious that changes need to be made in the general methods of current HR management within Japanese companies. Even via the introduction of Western methods, or an acceptable hybrid management system, it is still an extremely difficult task to turn the tide of years and years of entrenched habits and customs in the workplace. Truly innovative companies willing to accept the necessity for dramatic change will find ways to overcome denial that the old ways no longer are the path to success. However, at the same time, these companies will find ways to merge and integrate global best practices for a truly beneficial and customized solution that doesn't completely estrange the older generation. In the most extreme cases, it will mean getting the right people on and the wrong people off the bus.