Leading in Japan: CEO Strategic Priorities for 2024
Mastering the Unique Challenges of Japanese Subsidiaries in the New Year
As we venture into 2024, CEOs or Country Heads leading subsidiaries of Multi-Nationals in Japan face a unique set of challenges and opportunities. Aligning with global strategies while adapting to the dynamic Japanese market requires a nuanced approach. Based on our discussions with senior executives in Japan, here are some crucial priorities to consider for achieving success in this unique business environment.
Strategic Priorities for Subsidiaries in Japan
Area 1: AI and Technology Adaptation: As technological advancements rapidly evolve, staying updated is crucial.
Watch out: Stay abreast of discussions at your global HQs on AI and technology as you will be on the receiving end of their decisions.
Prepare your leadership team for imminent changes and align your Japanese subsidiary with global technological trends. Encourage experimentation and initiate robot dialogue in your organization.
Area 2: Sustainability and Corporate Governance: With increasing global focus on sustainability, it's essential to adapt to these expectations. Be cognizant of subtle differences in the interpretation of sustainability and the demands of Japanese stakeholders.
Sustainability: It should be a top priority, reflecting global strategies and local demands.
Japanese Point of View: Understand and integrate the unique Japanese perspective on sustainability into your operations and branding.
Area 3: Talent Strategy and Succession Planning: In Japan's tight talent market, a strategic and nuanced approach to talent management remains key.
Succession: Prioritize succession planning as a key objective for every member of the leadership team.
Retention practices: Effectively compete in Japan's talent market by focusing on retaining your top talent and strengthening your employer brand. Empower your leaders with the skills and authority necessary to address top talent needs, including flexible workload and job scope, to achieve two primary objectives: retaining and advancing your key personnel.
Development practices: Implement transparent, performance-based talent development practices.
Transformation Priorities for Subsidiaries in Japan
Area 4: Purpose-Driven Transformation: Aligning with a purpose is vital for meaningful and effective business operations. Address the persistent challenge of translating global strategy for local implementation to enable both, business performance and culture change.
Aligned on purpose: Engage your leadership team in understanding and defining the 'why' behind your organization's purpose.
Implementation cascade: Translate global strategies into actionable local plans, bridging the gap between global directives and local implementation by engaging in a robust dialogue within your organization.
Area 5: Agility and Organizational Flexibility: As global economic shifts and industry changes continue, your Japanese organization may experience increased emphasis from Global Headquarters on adopting agility and flexibility. This evolving landscape suggests a growing need for integration and alignment with global standards and approaches, moving beyond traditional market-specific justifications.
Practical agility: Move from theoretical agility to practical changes in thinking and working.
Flexible organization: Cultivate an organization that can swiftly adapt to changes such as new product introductions from the global level.
Area 6: Empowering Middle Management: In the context of Japanese subsidiaries, middle managers play a crucial role as integral connectors within the organization, facilitating operations and strategy implementation. These managers often face unique challenges due to a combination of factors. These include organizational changes such as flattened hierarchies and expanded managerial scopes, along with the need for enhanced empowerment and adaptation to these evolving roles. Additionally, the practice of recruiting mid-career hires as middle managers can pose challenges in terms of aligning with the company's culture and understanding implicit expectations. Effectively supporting and onboarding these managers is essential for their success and, by extension, the smooth functioning of the organization.
Strategic Players: View middle management not as a transitional phase but as a key strategic layer.
Aligned Mindsets: Ensure alignment of both home-grown and mid-career managers with your organizational culture and strategy. Effectively support and onboard, especially mid-career managers is essential for their success and, by extension, the smooth functioning of the organization.
Operational Priorities for Subsidiaries in Japan
Area 7: Operational Efficiency: The strategic significance of your Japanese subsidiary within the global organization remains a key focus. As such, its contributions to both revenue and profitability are essential. In this context, there is an ongoing emphasis on enhancing operational efficiency to achieve optimal results with available resources.
Efficiency: Focus on enhancing efficiency, balancing the need to deliver more with fewer resources.
Culture: Foster a culture of trust and transparency to facilitate necessary operational decisions especially related to what to stop doing.
Area 8: Business Continuity Revamp: Recent events, such as the Noto Earthquake on the 1st of January 2024 underscore the importance of robust business continuity plans.
BCP refresh: Revisit your business continuity plans in light of natural disasters, drawing lessons from recent events and the pandemic.
Focus of BCP: Focus on customer-centric continuity planning, ensuring robust supply chains and technology resilience.
Closing Thoughts and Invitation
As we navigate these strategic areas, Kay Group is committed to supporting you in adapting these priorities to your unique context in Japan. We understand the complexities and stand ready to help you fine-tune these strategies for optimal impact.
We invite you to explore these themes further and discuss how we can assist in your journey. Stay tuned for our upcoming sessions and resources designed to empower leaders like you in the ever-evolving landscape of Japan. For discussion and exploration reach out to Karin Wellbrock (karin.wellbrock@kaygroup.com).
Wishing you a successful and prosperous 2024.
Sources: McKinsey (December 2023) What Matters Most. Eight Priorities for CEOs in 2024 and Kay Group Research of Senior Leaders in Japan
ABOUT THE AUTHORS
Axel Wellbrock is the Founder and Representative Director of Kay Group K.K., a Tokyo-based consultancy that specializes in leadership and organizational development. With a wealth of experience as a senior executive in the life sciences sector, Axel brings a unique blend of industry knowledge and coaching expertise to his role. As a certified Leadership and Team Coach, he is passionate about empowering senior leaders in Japan to fulfill their mandates and make a lasting impact within their organizations and industries. Axel’s work extends beyond coaching; he collaborates with leading organizations in life sciences and various other sectors, guiding them towards transformative success.
Karin Wellbrock, serving as the Partner and COO at Kay Group K.K., grounds her approach in a deep understanding of the challenges and opportunities within leadership and organizational development. As a certified Leadership and Team Coach, Karin excels in driving both established and emerging executives to make their mark in their fields. Known for her innovative yet pragmatic methodologies, she significantly enhances the effectiveness of leaders, especially for those aiming for the pinnacle of their careers.
For assistance on navigating your leadership journey and discussing your priorities for 2024, reach out to Axel and Karin at axel.wellbrock@kaygroup-asia.com or karin.wellbrock@kaygroup-asia.com.