The New Rules of Organizational Health: Leading Culture Change in a Global-Local Reality
Picture a Japanese boardroom where senior executives sit in silence, contemplating a reality they never imagined: their traditional leadership approach of deliberation and consensus building, refined over decades, might actually be holding their organization back. As a leadership coach working with multinational companies in Japan, I witness this scene play out regularly. It raises an intriguing question: How can leaders evolve when everything they knew about running successful organizations is being rewritten?
The Great Cultural Adaptation
Recent McKinsey research* reveals that organizational health, understood as how well organizations align around a common vision, execute their strategy, and renew themselves, is undergoing a fundamental transformation. The data is compelling: organizations scoring in the top quartile on health deliver, on average, three times the shareholder returns of those in the bottom quartile. But here's where it gets fascinating: the rules that governed organizational health for decades are shifting dramatically.
In Japan, this shift creates a unique tension. While global headquarters push for empowered employees and autonomous teams, local organizations often excel through their legendary focus on execution and process orientation. This isn't just a theoretical challenge. It's one I navigate daily with my clients. The real challenge lies in bridging the theory of empowerment with the practical reality: the organizational structure, the work at hand, and the policies and procedures that determine who can decide what.
Six Critical Shifts Reshaping Organizational Success
1. From Authority to Empowerment
The most striking finding from McKinsey's research: authoritative leadership is now obsolete. Organizations that embrace empowering leadership are 3.4 times more likely to be healthy. In Japan, this represents a seismic shift. I recently worked with a Japanese subsidiary of a European medical device company where the local leadership team initially resisted the idea of empowering their sales teams to make decisions. Their breakthrough came when they realized empowerment didn't mean abandoning structure; it meant creating clearer frameworks within which sales teams could operate autonomously.
2. Purpose Beyond Process
Organizations emphasizing common purpose are 4.1 times more likely to be healthy. In Japan, where company loyalty usually runs deep, though you'll always find exceptions, reimagining this connection through shared purpose rather than just duty creates powerful results. One of my client teams in pharmaceuticals increased engagement by 30% simply by clearly articulating their "why" behind their meticulous processes.
3. Data-Driven Decision Making
The research shows that even the most experienced leaders can't rely solely on intuition in today's fast-paced environment. This actually aligns well with Japan's analytical approach, but requires a shift from using data to maintain stability to using it to drive innovation. In our work developing high-performing teams, we often find ourselves helping clients avoid ‘analysis paralysis’ and endless loops of more analysis, as decision-making speed remains a consistent challenge at all levels.
4. The Human Factor in Excellence
Employee experience isn't just about satisfaction anymore. It's about enabling people to be their best. This represents perhaps the biggest challenge for Japanese organizations, where standardization has long been valued over individuality. Yet, companies that create conditions for employees to thrive are the ones that retain and attract top talent. Focusing on strengths rather than weaknesses is still a fresh concept in the Japanese workplace, which made it especially rewarding to collaborate with a healthcare company's leadership team where the CEO prioritized team strengths and a positive outlook.
5. Technology with Purpose
A surprising finding: technology investments should be ruthlessly tied to business performance, not just employee satisfaction. This is a hot-button topic in Japan, not only because of the shrinking talent pool but also due to persistently low white-collar productivity. Until recently, enhancing digital literacy was a major focus for our clients, and now we may be on the verge of seeing the results take shape.
6. Social Responsibility as Strategy
Organizations emphasizing social responsibility are 3.3 times more likely to be healthy. This aligns naturally with Japan's stakeholder-oriented business culture but requires expanding beyond traditional corporate citizenship to more comprehensive environmental and social impact.
Making It Work: Practical Steps for Leaders
Based on my experience helping Japanese organizations navigate these shifts, here are three proven approaches:
Start Small, Win Big: Begin with one team as your "laboratory" for new leadership approaches. Test empowering leadership in contained environments before scaling. One pharmaceutical company I worked with started with a single business unit, gradually expanding successful practices to other parts of the business.
Make Data Your Ally: Use concrete metrics to demonstrate the impact of new leadership styles. Numbers speak louder than theories, especially in traditional organizations. Track both hard metrics (productivity, innovation outputs) and soft metrics (employee engagement, decision-making speed). But don't fall into the trap of thinking you can only measure quantitative aspects; and don't let ‘analysis paralysis’ result in inaction. Train and develop your people in data analysis to make decisions, and don't assume they inherently know which decisions to make and how.
Create Safety in Transition: Acknowledge that changing leadership styles feels risky. Set up regular reflection sessions where leaders can openly discuss their challenges and wins. This creates psychological safety for experimentation while maintaining the structured approach Japanese organizations value.
“A common leadership challenge I often notice among my female executives is their natural tendency to want to help and solve the problems in front of them.”
Lead by example: if you, as a leader, want to make a change, inform your team so they can support you in the process. A common leadership challenge I often notice among my female executives is their natural tendency to want to help and solve the immediate problems in front of them. While this approach can be effective in the short term and beneficial for the business, it can stifle the team's growth over time, as they miss opportunities to think critically and develop their own solutions. The most successful client transformations I’ve seen stemmed from radical candor—leaders openly sharing what they wanted to change, inviting observations and feedback, and taking deliberate steps to improve from meeting to meeting.
The Path Forward: Balancing Tradition and Transformation
The journey to organizational health in today's world isn't about abandoning traditional strengths—it's about thoughtfully evolving them for a new era. The most impactful leaders I work with in Japan aren't those who make the most dramatic changes—they're the ones who find ways to blend time-tested wisdom with new approaches.
Take the example of a European pharmaceutical subsidiary in Japan. Renowned for their excellence in medical scientific liaison (MSL), they chose not to overhaul their foundation but to build on it. By introducing a coaching culture and autonomous teams, they enhanced both empowerment and execution. Far from diluting their strengths, this evolution enriched their effectiveness, proving that adaptation doesn’t have to come at the expense of tradition.
Ready to Transform Your Organization?
As we navigate these changes, the question isn't whether to adapt, but how to do so while preserving what makes your organization unique. Success often begins with a single step – you don't need to have every detail mapped out before moving forward. Start small, learn fast, and adjust your course as you go. This agile approach allows you to maintain momentum while staying responsive to new insights and changing conditions.
Sometimes the most powerful transformations begin with modest experiments: testing new ideas in controlled settings, gathering feedback, and scaling what works. By breaking down large changes into manageable pieces, you can build confidence and capability while minimizing risk. The key is to maintain your organization's core values and distinctive strengths even as you evolve your practices and systems.
If you're wrestling with these challenges in your global-local context, I'd love to explore how we might work together to find your path forward. Whether you're just beginning to consider changes or ready to accelerate existing initiatives, we can design an approach that fits your organization's unique circumstances and culture.
*Sources: McKinsey Rethinking Organizational Health (2024) and McKinsey Five bold moves to quickly transform your organization’s culture (2024)
ABOUT THE AUTHOR
Karin Wellbrock helps leaders find their authentic voice and create thriving organizations. With extensive experience in both Japanese and global companies, she brings unique insights to bridging cultural perspectives while driving meaningful change.
As Partner and Head of Leadership Effectiveness at Kay Group K.K., a Tokyo-based leadership consultancy, Karin partners with leaders who want to make a real difference – not just hit targets, but build organizations where people genuinely want to work. Through one-on-one coaching, team development, and organizational consulting, she focuses on practical strategies that fit each client's unique context and culture.
Beyond her consulting work, Karin explores leadership and organizational culture through her "Exceptional Leaders in Japan" series, collaborations with NGOs, and work with startups. Her mission is simple: helping leaders create lasting impact while finding genuine fulfillment in their roles.
Connect with Karin to explore how she can help strengthen your leadership and transform your organization.
Discover more of Karin’s insights on leadership and organizational culture in her articles for Brainz Magazine—where she delves into the challenges and opportunities facing today’s leaders.
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