Diversity – a topic of frequent debate and discussion in business, but often contextualized in the narrower scope of gender and race. Being a foreigner working in Japan for the last 18 years, I have come to understand that the concept of “diversity” goes beyond just men and women or racial profiles. It is my view that true diversity is achieved in an environment where there is ample scope for diverse thinking and appreciation and acceptance of various points of view without bias or discrimination. In today’s hyper-competitive workplaces, it is easy to get carried away by stereotypes and prejudices. If I am to base my argument on my own experience in Japan, I’d say that one of the main reasons for Japan steadily losing its status as a global leader is its stubborn refusal to accept more diversity. And again, when I use the word diversity, I use it in a broader context while stressing on the diversity of thought and opinion. For a country like Japan, the problem is two-fold. Not only is there a staggering gap in the ratio of males to females in the workplace (especially in strategic roles/functions) with a predominantly Japanese native workforce, there’s also a widespread and baseless refusal to acknowledge or accept any alternative way of thinking other than the “Japanese way”.
In the historical context, the “Japanese way” has worked well for Japan and made it what it is today, but when one looks at the future of a country with a rapidly ageing and shrinking society and a vast number of businesses that are struggling to keep pace with global changes, one wonders if the “Japanese way” will serve a meaningful purpose in the later part of the 21st century, and beyond. It is my opinion that certain elements of the “Japanese way” will hold their place and others will be forced to evolve or die. Things like ethics, honesty, integrity will, and should, persist, but the closed approach towards “outsider” points of view must fade out. In several conversations with my Japanese colleagues, I observe that a subtle change has started somewhere, but to reach a point where the change can actually make a significant difference, it would take a few more generational shifts.
The Case for More Diversity in the Japanese Workplace
So let me try and make a case for more diversity in the Japanese workplace in the hope that sooner, rather than later, more and more decision makers here will acknowledge the advantages that diversity brings to their organizations.
First and foremost, whenever we talk about Japan, the immediate talking point is the ageing and shrinking population of active workers. Reports project that the total population of Japan, currently at around 127 million, would drop to around 88 million by 2065 (and expected to drop below the 100 million mark by 2053). It is estimated that there are around 60 million active workers in Japan – expected to drop to 56 million by 2030. The average retirement age in Japan is 65. However, a large number of elderly people have continued to engage in some form of employment even into their 70s and if health permits, they don’t consider retirement before they hit the 80s! While that may sound surprising to many outside Japan, one must keep in mind that Japan has the world’s longest life expectancy and with some of the best living conditions and healthcare support structures in the world, being able to remain fit for work much longer is not unusual. While this extended career is generally a good thing, there’s a potentially destructive side effect. A vast number of older (60+) members of the workforce occupy top level positions in corporate Japan and they are not excited about the idea of bringing about radical changes during the last few years of their careers. They prefer to leave behind them a legacy of stability, consistency and predictability, rather than high risk and futuristic transformations. Maintaining the status quo without rocking the boat is paramount, and often, a benchmark of their “success”. In this top layer of Japanese management, there is a stunning absence of diversity of any kind. Women in positions of corporate authority are extremely rare. Non-Japanese participation is almost non-existent as well (unless it’s one of the global giants where the board may push foreigners into key positions). So if one walks into a Japanese board meeting convened to decide on the company’s future, all one will see is a group of aged Japanese men in dark suits sitting around a table and agreeing to continue in exactly the same way as they always have, for the past several decades; also re-iterating that any “drastic” change is too “risky” to consider. Then they talk golf and a bit of politics, comment on the weather and the fantastic Sushi they had at the frightfully expensive restaurant in Ginza, thank everyone for the excellent work and promise to meet again soon to talk about how they can ensure that their company continues to stay stable. The thought processes and ideologies of decades gone by continue to dominate these boardrooms and the business strategies that come out from them. Since there is no “disruptive” voice, no alternative idea or suggestion, no “disagreement”, no push from anyone to try something different so that the company can not just exist but grow in a way that makes an impact on the world, the status quo stays intact and life goes on as usual. The paper boat stays afloat in the puddle… undisturbed.
It may seem that I have painted a rather dire picture there but it is as real as it gets. Corporate lethargy has been the bane of Japanese business in the last couple of decades and serious impact is already being felt across most sectors. It is critically important for Japanese companies to become more inclusive and embrace diversity in all senses. It must start with not just making it easier for women to work in any field of their choice but also inculcate a business culture that values professionals based on their skills, capabilities and contributions rather than their gender. Allowing everyone to evolve on a level playing field would surely deliver positive results for any company. There are numerous studies showing that having women in key senior positions makes the company more empathetic and stable. Besides, statistics also show that cases of corporate fraud in companies run by women are very very rare, which seems to imply that companies with more women calling the shots are likely to be more ethical and less likely to violate regulations or laws. Japan is wasting some of its most valuable talent by making it so difficult for women to play a more active role in business. The glass ceiling for women in Japan needs to be broken and corporate Japan must take the lead. Every company CEO or President or Board of Directors must take this up as an immediate action item and put in place mechanisms to build inclusive workplaces where women don’t feel marginalized or their value is diminished just because they are women. It is high time Japanese men woke up to the reality that business strategy is not their monopoly and seriously listened to the countless highly capable, skilled and qualified women who can bring about radical change. This is also a question of the basic tenets of “equal opportunity”. I was going through the 2018 Edelman Trust Barometer Global Report and came across a slide dealing with the trust-building mandates for business in countries with extreme or typical trust changes (see below).
As the above slide shows, for countries like Japan, ensuring equal opportunity for everyone in the workforce is a key parameter for companies to be more trusted in the marketplace. It would be logical to also state that the employees would also trust the company much more when they feel that their progress in the organization does not depend on their race, gender or any factor that is not related to the skills that are required to do the job.
The second point is probably more controversial in Japan, and it is about the role of foreigners. There are opinions on extreme ends on this subject and it would be incorrect to say that either opinion group is 100% wrong or 100% right. It is a sensitive issue and needs to be addressed accordingly. Being a foreigner, it is easy for me to make an outright claim that Japan MUST have more foreigners in key business roles because that is, at least on paper, the easiest way to achieve “diversity”. But again, since I have been in this country for so long, I also understand why it is not that straight forward. Historically, Japan has kept its doors partially closed to “outsiders” because this approach has allowed the country to protect and preserve its “Japanese-ness”. The sense of pride that is visible in being Japanese is quite understandable. So I am not saying that more foreigners should be integrated in order to dilute or weaken the “Japanese-ness’ of the prevalent business culture, but to make it more effective and efficient in the modern context by adding diversity in thought, approach and philosophy. Companies in the US, many parts of Europe, Singapore, Canada and others have had a long history of highly skilled professionals joining the local workforce and adding tremendous value to the respective organizations. In the US space agency – NASA – for example, one can find some of the best brains from various parts of working together as one to take the next step forward in space technology and exploration. Major European automobile companies like BMW, Mercedes, Audi, etc. also have a large number of non-European workers in their teams. Japan has, however, been more conservative in its adoption of foreign workers. In the last 30 years or so, the infusion of foreign workers has mostly happened in the information technology sector, where IT engineers from China, India, South Korea, etc. have been brought in by Japanese and international companies to augment their technical skills backbones. Recent moves by the Government have been made to bring in workers from smaller Asian countries to support Japan’s critical health worker shortage. Corporate Japan though still remains predominantly homogeneous and rather sceptical of having too many foreigners in the workforce. In the last 17 years that I have been working closely with companies in Japan, I have always observed that companies with more diverse teams have grown faster, made more profits, been more innovative, have a higher number of satisfied customers and comprise of “happier” employees. The obvious question now would be, “Why is that so?”. And the answer is not complicated at all. When there’s a problem to be solved, multiple points of view and ideas always prove to be useful in determining the best solution. If there is only one chain of thought, then the solution may be incorrect or inadequate because, at times, the tendency is to go with past experience and current “feelings” rather than a thorough and unbiased analysis of all the available facts. Out of the box thinking is also more feasible when diverse minds come together and brainstorm. This is common sense and there shouldn’t be any argument against the idea of diverse brainstorming to determine the most effective and efficient solution to a particular problem. The reality is that in today’s complex world, just a single approach cannot always achieve the required results. And in an environment where there are people from various countries, with various backgrounds, cultures, education, training, experience and mindsets, the chances of making high impact breakthroughs are significantly higher. The global market is highly competitive. There are new innovations coming up every day and quite often, from companies that didn’t even exist a few months or years ago. It is time for Japanese companies to let go of there obsolete philosophies and be more open towards newer approaches. It is time for them to step outside their comfort zones. It is time for them to put aside their inflated and misplaced egos and pay due respect to capability and potential, irrespective of where it originates from.
Diversity is no longer just a topic of discussion but something that needs to be acknowledged, accepted and encouraged across all aspects of society and business. CEOs in Japan need to pick up the paper boat from the puddle and set it afloat in the open seas. The future strategy of the business must be looked at more openly. Yes, there will be some turbulence that will need to be endured, but once that passes by, what emerges would be a solid, high performance and innovative organization that can lead the world by example.
Aniruddha Mallik