In 2011 we saw the end of a major scandal at famous Japanese medical equipment company Olympus. Japanese professionals tend to acknowledge the scandal but very few use it as a case study or learning experience as what you would see in many MBA program case studies. In October 2014, the Briton, Mr. Michael Woodford, involved in the scandal came to Japan to speak at a couple events regarding the situation. He brought copies of his book that he wrote about the scandal and his involvement which he and his wife sold at the sites.
Five Japan-based international c-level executives from a CEO group representing firms from Japan, Europe, and the United States went to hear the talks. This group made up of Chief Executives from Denmark, the UK, the US went to hear Mr. Woodford speak about his experience. These CEOs of experience in Japan ranging from 2 to 20 plus years listened to Mr. Woodford’s detailed descriptions of his rides on the Japanese bullet trains and how they laid out the cookies on the tray, the importance of business card holders, the size of the hot spring bathtubs that he got into with his friends at the Japanese “onsen”, and his residence rooftop in Tokyo’s Shinjuku area. The consensus following the meeting was there was little content to these public presentations.
One CEO running a 400 person Japanese firm described one of the presentations as, “I felt like I was watching the movie Lost In Translation”. Another newly Japan-based CEO said “his knowledge of Japan was quite superficial given his tenure in Olympus”. Continuing, “To me, the event was more like a trailer for a blockbuster movie (in this case a book) except that normally I don’t normally have to pay to see the trailer.”
The overall conclusion was that Mr. Woodfords limited knowledge of both the Japanese culture and standard business practice of firms in the country his former employer originated from, was probably the reason for not being able to skillfully navigate and resolve the scandal. At one of the Tokyo events, when Mr. Woodford was asked “Do you see that anything that has changed in Japan for the good since your firing at Olympus? “ Mr. Woodford replied, “Nothing has changed”.
This response gave the impression that these talks in Japan were not really about trying to make companies better but were more likely about trying to get famous. The impression was trying to sell a thriller type story. In fact, much has changed in attitudes toward foreign CEOs, the importance of corporate governance, and the role of founder CEOs in the future of publicly traded companies.
The Woodford book is a well-written piece with excellent descriptions of what the author saw. The book is called, “Exposed”. However based on the cultural knowledge of the author displayed publically and the impressions of people actually running businesses in Japan (taking the photography image a step further) a more apt name for the book might be “Under Developed”. The interesting observation of many participants in the Tokyo events (book tour?) was the lack of Japanese business people who were there.
The Olympus scandal was a horrible moral failure displaying a lack of corporate governance. However, the overall conclusion is that understanding who you work with, their language, how they think, and how they work is essential to being truly successful in business in any country.