The document discusses Japan's challenges with globalization and opportunities for growth outside of Japan. It notes that Japan faces a shrinking domestic market due to demographics like an aging population. However, globalization presents both opportunities to access new foreign markets through finding customers/partners online and threats from jobs moving overseas. It argues Japan needs to improve storytelling to build confidence, strengthen its brand, reform human resources to develop new skills, and pursue consistent global marketing, M&A, JVs, and alliances to expand internationally in a step-by-step manner rather than large risky acquisitions. Traditional Japanese management styles can hinder growth and innovation is needed to create sustainable growth beyond 3% annually.

1. Unno Institute
November 2018
Sample Workshop - Europe
By Ed Kuiters

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World is Flat
Thomas Friedman (2005)
World has become a level playing field
● Collapse of the Berlin Wall
● Netscape (Bubble)
● ERP (workflow)
● Open Source (Wikipedia)
● Outsourcing (Telecenter India)
● Insourcing (UPS - Toshiba)
● Offshoring (China WTO)
● Supply chaining (Wal-Mart)
● Information is anywhere and free
● Voip (Skype)

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Markets growing faster outside of Japan

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Open Economy

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Not global yet

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Why? World is NOT Flat
● Europe is a continent. A melting pot of
peoples but also full of conflict
● God is “the way”, but “I” am the
center. Forgiveness from God
● Argumentation, Models, Logics
● Risk, Change, Reward
● Individualism, Eccentricity
● Managers
● Impatient
● Explicit
● Latin based language
● Person to Person
● Japan an island of stability. Longest
reigning imperial family
● Confucianism is “the way”. Contribute
to the group
● Consensus, Holistic
● Conservative, Incremental
● Conformism
● Influencers
● Patient
● Implicit
● Japanese language
● Organization to organization

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Stepping of Japan means stepping out of your comfort zone.
● You will have to build up a reputation from 0.
● Compete in a language that is not yours.
● Build trust with people from a different cultural background, different habits, even a
different ways of thinking.
This discomfort leads to conservatism, postponing necessary expansion overseas until
it is late, very late, followed by a risky, "all or nothing" plunge in the dark foreign
acquisition, which could have disastrous consequences for your organization (See
Toshiba with Westinghouse and Kirin with Schincariol in Brazil).
Stepping out of your comfort zone

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Instead of taking a giant leap-of-faith we believe it is better to globalize your
organization step-by-step.
The first step, finding and contacting customers or partners has become relatively easy
when using the Internet, Google, Social media and a large number of service providers.
But what about the next step? Once you get face-to-face with foreigners, there is not
only the language gaps to overcome. There are also cultural gaps and business
practice gaps. How to gain trust? How to communicate? How to present and negotiate?
How to seize opportunities and manage risks?
This is where you are on your own. This is where we can help you.
Step-by-step approach

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If you want to do business overseas, you will need to negotiate deals. How to negotiate
with foreigners? How do I prepare for a negotiation? How to be persuasive? How to
identify and deal with negotiation "tricks"? How to establish long term beneficial
relationships?
TO DO: Pre-Assessment
1. Gap-analysis: What skills and knowledge does a global negotiator need to have
and how does this compare to the the skills in your organisation?
2. Design: We will design a training, using a “real case” and prepare role play
assignments to fill the gaps.
How to Negotiate with Foreigners?

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TO DO: Pre-Assessment
Gap-analysis: What skills and knowledge does a global negotiator need to have and
how does this compare to the the skills in your organisation?
Design: We will design a training, using a “real case” and prepare role play
assignments to fill the gaps.
Gap Analysis

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Value: (realist/ analyst)
price,
mileage,
engine
Who is your customer? Example: selling a car
Vision: (strategist/ imagineer)
latest technology,
gadgets
Process: (loyal/ diligent)
safety,
warranty,
reliability
Relationship (socializer/ empathizer)
smell leather,
ski compartment,
stereo

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● Different customers value different things
● Since you never know for sure who will step into your showroom, you’d better
prepare all four quadrants..
● It is the same with negotiation.. Better prepare for all 4 quadrants
○ Vision
○ Value
○ Process
○ Relationship
What is the point?

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What drives us/ them?
● Separate positions from interests, both for yourself and your counterpart
● Personal interests — recognition, promotion, status, commission, peace of mind
etc.
● Business interests — reduced costs, reduced expenditure, increased profits, etc.
● Strategic long-term or short-term interests — market leadership, cash flow etc.
● Tangible and/or intangible interests — money, financial security, relationships,
reputation, face saving etc.
● Benefits to gain, risks, costs to avoid — competitive advantage, less risk or
worry etc.
● Ask yourself: ‘If I were in their situation, what would I care about?’
R1: Vision

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5 Fundamental strategies:
1. Competing
2. Collaborating
3. Compromising
4. Avoiding
5. Accommodating
Strategy should be based on your assessment of the following information:
1. How strong your BATNA?
2. How much time do you have?
3. How important is the relationship?
4. What is the strategic value of the deal?
5. What is the monetary value of the deal? Peanuts or major?
How can we achieve our interests?
What is your Negotiation Strategy?

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Extreme demands followed up by small, slow concessions.
Perhaps the most common of all hard-bargaining tactics, this one protects dealmakers
from making concessions too quickly. However, it can keep parties from making a deal
and unnecessarily drag out business negotiations. To head off this tactic, have a clear
sense of your own goals, best alternative to a negotiated agreement (BATNA), and
bottom line – and don’t be rattled by an aggressive opponent.
Commitment tactics
Your opponent may say that his hands are tied or that he has only limited discretion to
negotiate with you. Do what you can to find out if these commitment tactics are
genuine. You may find that you need to negotiate with someone who has greater
authority to do business with you.
Negotiation Tactics 1

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Take-it-or-leave-it negotiation strategy.
Offers should rarely be nonnegotiable. To defuse this hard-bargaining tactic, try
ignoring it and focus on the content of the offer instead, then make a counter-offer that
meets both parties’ needs.
Inviting unreciprocated offers.
When you make an offer, you may find that your counterpart asks you to make a
concession before making a counteroffer herself. Don’t bid against yourself by reducing
your demands; instead, indicate that you are waiting for a counteroffer.
Trying to make you flinch.
Sometimes you may find that your opponent keeps making greater and greater
demands, waiting for you to reach your breaking point and concede. Name the hard-
bargaining tactic and clarify that you will only engage in a reciprocal exchange of offers.
Negotiation Tactics 2

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Personal insults and feather ruffling.
Personal attacks can feed on your insecurities and make you vulnerable. Take a break
if you feel yourself getting flustered, and let the other party know that you won’t tolerate
insults and other cheap ploys.
Bluffing, puffing, and lying.
Exaggerating and misrepresenting facts can throw you off guard. Be skeptical about
claims that seem too good to be true and investigate them closely.
Threats and warnings.
Want to know how to deal with threats? The first step is recognizing threats and oblique
warnings as the hard-bargaining tactics they are. Ignoring a threat and naming a threat
can be two effective strategies for defusing them.
Negotiation Tactics 3

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Belittling your alternatives.
The other party might try to make you cave in by belittling your BATNA. Don’t let her
shake your resolve.
Good cop, bad cop.
When facing off with a two-negotiator team, you may find that one person is reasonable
and the other is tough. Realize that they are working together and don’t be taken in by
such hard-bargaining tactics.
Negotiation Tactics 4

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Vision
Our Their
Key Interests
Strategy
Tactics

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TO DO:
1. Fill out the vision form
a. Our key interests - Their key interests
b. Our preferred strategy - Their preferred strategy
c. Our preferred tactics - their preferred tactics
2. Come up with a questioning strategy to verify your assumptions and ask why those
things are important to them.
Assignment

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● List the specific objectives that you and your counterpart have for this negotiation.
● List the items that can help you create value from your negotiation. The more
issues and objectives you can put on the table, the better value you offer.
● Prioritise the objectives and associate a Real Base (minimum acceptable level)
and an Aspiration Base (ideal outcome) for each objective. Which issues or
objectives are most important to you? On which topics should you stand firm?
Decide if these objectives are conflicting or shared with your counterpart.
● Start the negotiation by discussing shared objectives, rather than conflicting
objectives. It is easier to build momentum and discuss complex issues after you
have established common ground.
R2: Value

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Explore the best alternative to a negotiated agreement (BATNA) available to you and
your counterpart. The better your BATNA, the better offer your counterpart must
present to keep negotiating. If there is no feasible alternative, or it is a weak
alternative, you might have to be accommodating in your approach. If you have a
strong, high-quality alternative, you can use an assertive or competitive approach.
Your BATNA assessment requires the following three steps:
1. Identify all the alternative options you might pursue if you cannot reach an
agreement in your current negotiation.
2. Estimate the value associated with each alternative option.
3. Select the most attractive option, this is your BATNA.
BATNA

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Decide what you are prepared to exchange when you make concessions:
● Don’t give anything for free. Always ask for something in return. Ask this question:
‘If I can do that for you, what can you do for me?’
● Reluctantly communicate a concession you are prepared to make.
● State the conditions attached to your concession and what your counter
expectations are.
● Start with a bigger concession and follow with smaller concessions. Make sure
they are not of equal value. If two or three consecutive concessions are worth
¥10.000, your counterpart will think you have another ¥10.000 to give.
● Highlight the cost of every concession you make
● Make your counterparts work hard for concessions, as they will appreciate each
one and feel like they are winning.
● Make sure that final offers are absolutely final, be prepared to a “soft walk away”, if
not accepted.
Concession Strategy

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Value
Our Their
Deal objective
Real Base
Aspiration
BATNA
Concession Strategy …. For … …. For …

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TO DO:
1. Fill out the Value form
a. Our Deal Objectives - Their Deal Objectives
i. Ideal outcome
ii. Minimum acceptable
iii. Prioritize. On which topics should you stand firm? Are these objectives
conflicting or shared with your counterpart?
2. BATNA
a. Identify all the alternative options if you cannot reach an agreement.
b. Estimatethe value associated with each alternative option.
c. Select the most attractive option
3. Prepare concessions for the negotiation; what you are prepared to
exchange when you make concessions to your counterpart?
Assignment

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Take control over the negotiation process
● Framing Statement: what you will be focussing on
● Prepare a list of Probing Questions
● Team-Based Negotiations: Assign Relationship Role, Task Role, Observer
● Structure: Agenda, Venue & Set-Up, Note Taker, Debrief Scheduled
L2: Process

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Use framing to gain control. Framing can help you to gain focus on the objectives you
want to achieve as a result of the negotiation. Should your counterpart frame the
negotiation, you can reframe it to include your objectives.
• Shape aspirations — higher aspirations tend to boost results.
• Highlight concerns about potential losses (losses always loom larger than gains).
• Present unique benefits your counterpart might gain. Point out potential losses.
• Invoke common ground and emphasize collective benefits.
• Establish and control the agenda.
• Frame your past actions/concessions in terms of gains for the other side.
• Avoid win/lose framing.
Framing

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Prepare questions before the negotiation, So you will not forget to ask them during the
negotiation and lose an opportunity to gain valuable information.
Remember to follow probing questions with nurturing questions to explore interests.
Ask open questions. Use a consulting questioning approach, such as probe and
nurture. For example, ask this probing question:
‘What are the key elements of the deal that you are looking for?’ Wait for the answer.
Then ask, ‘Why are these the key elements that you have identified?’
Here are some sample nurturing questions: ‘Can you tell me more about . . .?’ ‘Can you
give me an idea how . . .?’ ‘What impact does this have on your or your organisation?’
‘What would be your ideal solution?’ Prepare questions to discover the other side’s
interests, concerns, goals, decision-making process etc.
Questioning

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Team Composition
Almost all negotiations contain two distinct roles: relationship-focused roles and task-
focused roles. It is important to ensure that each team member is assigned a role to
prevent arbitrage and misalignment. It is also helpful to have an observer who will take
notes about details of the negotiation.

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Structure
Use this section to ensure application of best practices in face-to-face meetings. Is the
meeting venue consistent with the negotiation strategy you are pursuing? Should you
create a specific seating arrangement? Who will take notes of the meeting? Will you
debrief the meeting with your manager?
Suggest an agenda for each meeting as a powerful way to manage the frame and
sequence of the discussion. You can ensure that time is spent on shared interests
before moving to potential conflicting interests.
• Agree on an agenda before you start the real negotiation.
• Make an effort to propose the agenda to your counterpart.
• Cover your priorities at the beginning of the meeting.

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TO DO:
1. Fill out the Value form
a. Our Deal Objectives - Their Deal Objectives
i. Ideal outcome
ii. Minimum acceptable
iii. Prioritize. On which topics should you stand firm? Are these objectives
conflicting or shared with your counterpart?
2. BATNA
a. Identify all the alternative options if you cannot reach an agreement.
b. Estimatethe value associated with each alternative option.
c. Select the most attractive option
3. Prepare concessions for the negotiation; what you are prepared to
exchange when you make concessions to your counterpart?
Assignment

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1) a lack of inspired leadership
2) employees feel more responsibility towards each other than towards the customer
3) because of a strict hierarchy in Japanese companies.
4) white collar unproductivity
5) seniority system which blocks talent
6) lack of decision making capacity
7) lack of accountability/ corporate governance
Relationship

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It goes something like this;
CEO: This year we will grow 3%, just like last year.
Bucho: Ehm.. how?
CEO: What didn't you understand? 3%!
Bucho: This year we will grow 3%, just like last year.
Kacho: Ehm.. how?
Bucho: What didn't you understand? 3%!
Kacho: This year we will grow 3%, just like last year.
Shain: Ehm.. how?
Bucho.. 3% you fool!!
The “shain” has but 1 objective.. "3%".. but since the company is not innovating, not
effectively expanding into new markets.. not doing anything to create this growth.. and
since he would like to be able to send his kid to university and he has no one to pass
the buck.. He has no choice but to make the 3%..
The Brand “Japan Inc”

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Where were we??
7 week BREAK...

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Demographics: aging, shrinking society (= market), growth outside of Japan
Globalization:
opportunity; find new markets, potential for inbound FDI.
threat: jobs moving overseas, attack of domestic, (inefficient) sectors: no evidence
What is needed? (according to McKinsey)
Storytelling: helicopter view (trends) => fear => confidence => action
Brand: what, how => why, how, what
HR: education, problem solving, output instead of input, talent sourcing
Global Marketing: Consistent customer experience, Absorb insights from other
industries, techniques to better understand consumer needs. (CMO, global business
units and brand owners)
M&A, JV’s and Aliances
Demographics, Globalization

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Only a few Japanese companies have tried and perfected a serial-acquisition strategy.
Besides M&A, many companies have tried partnerships with trading concerns, minority
joint ventures, and alliances. Generally speaking, these approaches have disappointed,
in part because they neither build capabilities nor help companies share best practices;
at best, they provide an international revenue stream or rudimentary access to new
markets. Indeed, many Japanese multinationals act more as holding companies for
international subsidiaries than as truly global organizations. When they buy companies,
they do minimal integration, except to consolidate revenue—ignoring opportunities for
cost-cutting, engaging talented employees of the acquired enterprise, and identifying its
best products and taking them global. Ineffective post-merger management, which
often stems from language and other cultural barriers.
M&A, JV and Alliances

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1. Japanese company creates a “second home,” which offers freedom from the
constraints of headquarters—meaning more room for across-the-board
experimentation and for decision making free of home market bias. Existing
businesses run from the Japanese headquarters remain undisturbed, while
managers can share with headquarters the lessons learned in the second home.
2. Another way for Japanese companies to grow internationally involves joint
ventures with domestic competitors. In many cases, these companies can’t
compete for overseas projects, because of high costs, a lack of scale, or
inexperience navigating in foreign markets, so they could consider collaborating.
How?

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ZARA is
● Global success
● Mainly manufactured in Spain, not a low cost country
● Low risk because of “no stock policy”
● Extremely good at marketing
○ Product: learning from & adjust to customer trends
○ Price: attractive fashion product at a low price
○ Promotion: Strong global brand
○ Place: extremely quick to bring customized products to a target market
Why should the ZARA model inspire Japan?
● Close contact with their customers & responsive to customer trends
● Leverage IT
● Small and big businesses work closely together
● Succesful inspite of wage disadvantages.
How? ZARA?

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15 things you didn't know about ZARA: https://youtu.be/OZ0Y79DhKkI?t=18s
Customer focused; ZARA https://youtu.be/UUZetKIR55Y
But also: https://goo.gl/G6CSQo (True Colors).. https://goo.gl/8FbzQA .. (CBC)
How can we be successful AND do things BETTER
Doughnut Economy:
Critique of economic theory: https://youtu.be/MeknuJWVsTk
Animation: https://youtu.be/2_AMEAnWyRk
VPRO bit.ly/dedonuteconomie.
At Cambridge: https://youtu.be/TQCuBGTHwFo?t=5m01s
(TED: https://youtu.be/1BHOflzxPjI)
How?

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Doughnut

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Doughnut

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Globalization is a means to an end.
The end is to create a sustainable self-reinforcing cycle of profit and value, access to a
richer asset and talent pool, and a more compelling value proposition for consumers
employees and investors.
How to get globalized
Getting there will be difficult. Japanese society as a whole and many Japanese
companies must make big changes, but most will start the journey with strong assets:
scale, relative strength in the home market, formidable quality standards and service,
and experience working with an aging and digitally sophisticated population.
Conclusion

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The challenge
The path forward will seem difficult for most senior Japanese executives, figuratively
standing on the shore and looking across the ocean to a world whose language many
of them don’t speak and whose habits and successful behavior seem radically different
from their own.
The transformation
Even if they have concluded that some things in their companies must change, it may
be difficult to imagine how to move the organization in a new direction. The most
expedient path, is “getting the boat pushed out into the current” by ensuring that faster
globalization becomes a leading priority.
Conclusion