Hiring a Japanese Company President
When starting business in Japan with a wholly owned sales subsidiary, whether a KK kabushiki kaisha, a GK godo kaisha, or a Japanese branch-office, the executive search and recruitment of the representative director President of your company’s Japanese subsidiary, or the representative manager of its branch-office in Japan, is one of the most critical decisions affecting its success. Give an executive search firm, recruitment agency or head hunter the wrong candidate profile, recruit the wrong person, and within 12 months your company’s CEO and CFO will be watching in shocked disbelief as Japanese business costs skyrocket while sales stay firmly glued to the ground. If your company’s Japanese subsidiary is a distributor support office, there may even be open rebellion among its Japanese distributors, as they become increasingly frustrated, refuse to deal with the subsidiary President and demand to deal directly with head-office executives. I experienced just such a scenario occur between two well-known Japanese and US companies, and I know of many others.
Use the right executive search firm, recruitment agency or head hunter, recruit the right company President or Japanese branch-office representative manager, and you will have an effective, responsive, and aggressive business in Japan with excellent customer and distributor relations. Just as important, costs will be proportional to the sales income generated. The right person will deliver quantifiable value from the first year of operations and very likely make the subsidiary profitable in that first year. Recruit the right President and your Japanese company will be a star performer in your company’s global operations and contribute a strong and sustainable cash flow, possibly accounting for 30% or more of your global profits, within 3 – 5 years of starting business in Japan.
Given the absolute importance of this key executive post, why, when searching for the President of their Japanese company, do so many foreign companies often recruit the first or second bilingual Japanese executive the executive search firm, recruitment agency or head hunter puts in front of them? Maybe it’s head-office pressure to hire “someone, anyone, who speaks English”, maybe it’s poor advice from one of the often under-qualified (from the business and sales perspective) executive search firm consultants in Tokyo, or maybe it’s simply because the Japanese market “feels so different”. Whatever the reason, some of these companies put huge resources into very stringent recruiting processes to hire their head-office executives, but often seem to forget those stringent recruiting processes when hiring the key company President executive in Japan.
English language ability (if the candidate is a native Japanese) or Japanese language ability (if the candidate is not a native Japanese) often seem to outweigh concerns about a candidate’s business experience and ability. Some foreign executives setting-up companies in Japan seem concerned mainly with a candidate’s language ability, sometimes to the point that it transcends concerns about his or her business skill. Maybe this is why I sometimes hear a foreign executive say “Candidate A’s resume seems a bit weak on the experience we were looking for, but considering his English, we’ll hire him.”. A nice 35% fee for the executive search firm, recruitment agency or head hunter that introduced the candidate, but all too often a very expensive legal nightmare 1 or 2 years later for the company that hired him or her. In the cultural wilderness of kanji and the Japanese language confronting foreign executives arriving in Japan, it’s a relief to interview a candidate who creates a great impression chatting away about the intricacies of Japanese business culture, etiquette (and maybe even baseball, basketball, golf, or football!) in perfect English. But remember, you are not hiring a company President to give in-house English-language training to your Japanese managers and staff; you are recruiting the skilled business executive who must aggressively build your business in Japan.
In the previous section, we noted that as few as 600 of the 11,500 or so near-native English-speaking Japanese in Tokyo’s workforce may have the executive skills your company needs; that leaves the other 10,900, one of whom could seriously damage your company’s business if it hires him or her. While what follows might seem to contradict the previous section’s recommendation, it’s obviously better to hire someone around the TOEIC 800 level who truly understands your industry and has an active network in it, than to hire a word-perfect TOEIC 900+ with little related experience. In my experience, a successful Japanese subsidiary can generate 30% or more (as was once the case for Louis Vuitton, Chanel, Prada, etc.) of a company’s global profits. That is a serious responsibility and the person your company hires as President of its Japanese company is both the person who must make that success happen and a key officer within your company’s global organization. Many of the foreign companies that fail in Japan while succeeding elsewhere, often fail because they hired the wrong person as President of their Japanese company and then watched as costs spiraled and sales collapsed. Our recommendation is to rank business skill over language ability; if you can’t find both then it’s best to settle for slightly less on the language skill side, or increase the salary range to attract a top-flight bilingual executive.