Formality In Doing Business In Japan

Formality in Japan is linked very closely to what is perceived as being polite.  European countries may feel more familiar with Japanese style formality, but for countries like the US, Australia, Canada etc., this level of formality is not the usual.  There is a sense of formality here in Japan that is unexpected and sometimes hard to fathom for most foreigners. 

The most formal meeting I have ever attended in Japan was when I met the current Emperor in his palace. When every new Ambassador arrives in Japan, they go to the palace to present their credentials.  This was the case with Australian Ambassador John McCarthy, while I was Country Head for Austrade at the Embassy.  The Ambassadors don’t go to the palace on their own. They have their entourage of senior officials from the Embassy with them and I was in that group.  There is a special waiting room for you at Tokyo Station and then you are taken by horse drawn carriage with a mounted escort to the palace.  A senior Japanese Cabinet member attends you, in our case, the Minister of State for Financial Services Heizo Takenaka.

There are numerous points of protocol when greeting the Emperor – how you walk, stand, move, speak, sit etc.  Formal beyond words is how I would describe the atmosphere.  The second most formal meeting I have been to in Japan was with some fishmongers in Osaka.  I was introducing Australian Ambassador Dr. Ashton Calvert to various importers dealing with Australia.  This seafood business was a large one and a big customer of Australian produce.

They had the entire echelon of senior management turn out for the meeting with the Ambassador, it was a very stiff affair, a complete ceremony in itself.  The formality was quite breathtaking.  I never expected that fishmongers could be that formal, but it was a very serious affair, because of the “above God” status of the visiting Ambassador.

There are levels of politeness here with the accompanying formality.  Even simple things like how you sit.  I had an embarrassing experience when I was attending a senior Australian government official making the rounds of calls in Osaka.  The Governor of Osaka was unavailable that day for the meeting, so we met the Vice-Governor. 

Picture this scene. The Vice Governor is sitting ramrod straight in his chair, with a 10 centimeter gap between his spine and the back of the chair.  Roman patrician style – very formal and upright.  My Aussie VIP visitor by contrast, was sitting there with his legs kicked out in front of him, lounging back in his chair, like he was on his couch at home watching the footy.  The contrast in informality and formality was stunning.  The formality-politeness construct comes straight into play here. Is lounging around in a formal meeting polite in a Japanese context?  Was my VIP showing any respect for the Vice-Governor?  I don’t think so.  After the meeting, I tried to breach the subject of required formality in Japan with my visitor in a subtle way, but I failed.  The cognition gap was too big to straddle.

When we are in business, always think that Japan is more formal.  When you go into the meeting room, there are these massive big chairs with solid wooden arm rests.  These are big units and must weight about 50 kilos.  They are also set at quite long distances across the room, so you are quite separated from the other side.  It is very, very hard to build up any rapport when you are sitting that far apart in such a formal atmosphere.

If you are a training business like we are, you want to show things to the buyer.  Well you just can’t do it at that distance, so you have to get up and go sit closer.  Of course you have to apologise for breaking protocol to do that, but otherwise you have no chance of introducing your solution with any impact.  Now a Japanese visitor is unlikely to ever attempt to alter the seating arrangement, which is why being a foreigner is an advantage sometimes in business in Japan. 

We can break through the formality, but you have to know when it is appropriate and when it is not. We are dealing with Presidents of companies or very senior people and it is great chance to go straight to the top and get them interested in what we can do for them.  In the typical Japanese setting among Japanese, they are going to find that hard to do, because of all the formality attached to the meeting.

We are in this room as a sign of respect.  They have lots of other meeting rooms which are a lot less formal and where you can do business across the table more easily.  The formality of the meeting room reflects the degree of politeness being shown to the visitor.  Because of your rank you go into the big, formal,  impersonal, almost impossible to do any business meeting room  But it is a strong sign of polite respect and we should be extremely appreciative of that indicator.

So what happens when we flip it around and you are receiving visitors – what degree of respect are you showing them?  Do you walk them out to the elevators?  In Japan that is part of being polite, showing respect.  Now in some cases you may not rank that degree of respect, so it is sayonara at the door.

Japan’s politeness is linked to formality and thoughtfulness.  Japanese are very, very thoughtful.  Australia, where I grew up, is so much more easygoing, informal and casual, so sometimes it is hard to get your head around Japanese formality.  The thoughtfulness thing is also surprising too.

As an example, my wife’s friend invited us to the wedding of her daughter.  The family is super wealthy and they could have had an extravaganza of a wedding, inviting all the heavy hitter business contacts as well and making it a big affair.  Instead, it was about 100 people and they were all close friends and relatives.  My wife who is Japanese surmised that the reason we were invited was because her friend wanted to introduce us to our own neighbor. 

Our neighbor, like my wife’s friend was in the Takarazuka troupe, which is super famous here in Japan and they are all female entertainers, acting, singing and dancing. Our neighbour has gone on to become a major Japanese actress, very famous and a big, big celebrity.  Her house is a huge fortress and we have never even laid eyes on her. When you do the call to introduce yourself to your neighbours, you get the maid in her case and that is it.  So finally we had a chance to meet her and that was through the thoughtfulness of my wife’s friend to do that.

What are you doing to be thoughtful in business with your clients?  What can you do for them?  When you go into the meetings, be more formal than normal – it will be seen as polite. Australia is probably the casual capital of the universe.  That is fine in Australia but Japan is different.  How you sit, stand, walk, move, speak were all determined very rigorously in samurai days and many of those attributes have trickled down to today, as acceptable, polite behaviour. 

All of this flies out the window however when you go out drinking together.  It is extremely informal, but that is the correct environment for that activity and Japan doesn’t mix it together.  The problem with a lot of informal countries like my own, is we tend to want to mix them together, to be informal when we should be trying to be formal.  Don’t mix them up in Japan.

If you say “no” I want to do it my way, this is how I do it in my country, I am not going to be Japanese about this, then good luck with that approach.  Let me know how that is working out for you!  I wouldn’t recommend that.  I suggest you try to be seen as polite in a Japanese context and that means being a lot more formal that normally would be the case in a business setting in your own country. 

By the way, you will never be Japanese.  Trust me. You will never be considered Japanese. Trust me.  But you will be considered polite from their point of view, their reference point, their cultural context.  We have to be conscious of that and maybe up the formality levels a bit to fit in, at least during working hours.  After work we are all champions of informality, so we have that part down already.

Nemawashi Or Groundwork In Business In Japan

Nemawashi is a very important word in Japanese.  It is made up of two words “ne” which means root and “mawashi” which means to wrap around. Or wrapping up the root. A good translation however is “groundwork”, usually associated with a decision or a meeting.  In Japan they can move 15-20 meters trees from one location to another.  They dig down, cut the tap root, bind up the root ball, get a big crane, put the whole tree on a truck and transplant it to another place.  Quite amazing.

That nemawashi represents preparation before the tree gets moved.  In business the same things apply.  We want a certain decision to be taken so we prepare to influence the direction that decision will take.  We might be dealing with a client or within our company.  Japan doesn’t leave anything to chance.  Prior to the meeting, you meet with the other people who are going to attend the meeting and you try to get their agreement with what you propose.  In this way, the decision is taken before anyone gets in the room.  The meeting itself is just there to formally approve what has been decided beforehand.

In a Western context, we would make the decision in the room.  Everyone would turn up expecting that there will a discussion, some debate and final decision will be reached during that meeting.  In the Japanese case, they will already have made the decision, so if you want to influence the decision you have to start early. It is no good leaving it until the meeting itself, because that will be too late and the decision will have already been taken.

If it is a client company, you need to work with your internal champion to get the decision makers to agree with what you want to happen.  Usually the decision you want is that the client uses your product or service. As an outsider you won’t be in the meeting, but you have to help your champion to be persuasive with everyone when doing the groundwork or nemawashi.   Give them the data, the evidence, the testimonials, whatever it takes to make the case solid when presenting it to the people who will be in the meeting. Don’t leave it too late, because it takes time to get around everyone and have those discussions before the meeting is held.

Are the other people in the meeting who want a different decision or outcome doing their own nemawashi? Yes, absolutely they are. This is why you have to prepare your champion to be effective making the argument in your favour.  They can get the meetings, but they need your help to be persuasive.  The quality of the preparation has a big impact on the final result of course.  You need to get them to nominate who is in the meeting and get an idea of what will encourage them to be in agreement with the decision you want. Your champion should have a game plan for each person and that should be put together with your help.

If you understand nemawashi represents the idea of preparation, then be well prepared.  As pointed out, don’t leave this process to the last moment. You need to give yourself time to allow the nemawashi system to work in your favour.  You also need to anticipate the arguments of the other side and head those arguments off at the pass.  You are working through your champion, so the preparation becomes even more important in these cases.  Does it mean you will always prevail.  No, you will win some and lose some, but you will place yourself in the best possible situation to get a win.  If you had no idea about nemawashi you can probably begin to understand why the decision you wanted went against you.  From now on though become part of the Japanese decision-making process and exert influence from within.

Engaged employees are self-motivated. The self-motivated are inspired. Inspired staff grow your business but are you inspiring them? We teach leaders and organisations how to inspire their people. Want to know how we do that? Contact me at greg.story@dalecarnegie.com

If you enjoy these articles, then head over to dalecarnegie.comand check out our "Free Stuff" offerings - whitepapers, guidebooks, training videos, podcasts, blogs. Take a look at our Japanese and English seminars, workshops, course information and schedules.

About The Author

Dr. Greg Story: President, Dale Carnegie Training Japan

Author of Japan Sales Mastery, the Amazon #1 Bestseller on selling in Japan and the first book on the subject in the last thirty years.

In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.

A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcasts “THE Leadership Japan Series”, "THE Sales Japan series", THE Presentations Japan Series", he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.

Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.

Networking When Doing Business In Japan

There are two varieties of networks here for me - the Japanese speaking and the English speaking. With regards to the Japanese speaking groups, there are a few things which are a bit different.  Japanese people are raised not to talk to strangers and guess what, they carry this idea over to networking events as well.  In a typical Japanese event, it goes like this: if I know you and I meet someone else I know, I will introduce you to each other.  I won't walk up to a complete stranger and start introducing myself.  

This is how it is done here, but it is pretty limited in terms of how many people you can get to meet. In our case, with my team, we bowl straight up to strangers at networking events and introduce ourselves. If you are going to create a contact point with someone new, you have to make it happen.  You have to be polite and reasonable, but you also have to break through the barriers.

As a foreigner, the social rules are not as strict for me, as compared to my Japanese team members. Often I am the battering ram, to walk up to groups standing around in a semi-closed circle and break in. I then introduce my staff member to everyone and away we go. I just keep repeating this all evening and we get to meet a lot of new people and some potential clients.

At English speaking events there are two varieties again, those who are Japanese and those who are foreigners.  The Japanese always get there early and they will go straight to the tables and sit down, uninterested or unable to meet anyone.  I don't let that little detail stop me.  I walk straight up to them and introduce myself, "May, I meet you? My name is Greg Story" as I extend my business card to them.  They are usually a bit taken aback, because they thought they were safe from having to meet anyone new or speak in English, but after starting the conversation they warm up.

If you go to networking in pairs or groups, my rule is don't sit on the same table.  How are you going to meet anyone if you sit together.  This happened the other day.  I was at a networking event and two representatives from a foreign embassy, who are involved in furthering commercial relations with Japan, were all poised to sit down together.  I was in that business for twelve years for Australia, so I suggested that was plan was not possibly the best use of their opportunity and that they should “work the room”.  I don’t think they quite managed that bit, but they at least sat separately and met many more people

My Dale Carnegie Training Japan rule is we divide the room up. I will take this half, you take the other half and we will get back together at the end and exchange notes on who we met at the event.  This sounds simplistic, but so many times I meet people sitting together who are from the same company.  Why would you do that?  I also start with the people sitting down at other tables and leave my own table until last. I walk around meeting everyone at the other tables and then finally at my own table, because I will have a chance to engage with them over lunch. 

The organisers sometimes provide a list of who has signed up to attend the event and this is very handy. If they haven't done that, it is always a good practice to get there early and check the name badges.  This allows you to put a face to the name of those people you have already met and to identify some people you may want to meet. It is also a good practice to ask the organisers to introduce you to people you want to get to know or at least point out who is who, so that you can go and introduce yourself.

I position myself right near the door, so I can meet people as they come in.

I recommend you always have a couple of key questions which will help you to know if this is a potential client.  If they are not a potential client, then move on because time is tight and time is money. I see some people getting trapped and they manage to spend all the time speaking with just the one person.  I do this parting very politely and say, "thank you, I am going to meet a few more people today" and move on.  I am there to find clients and this is not a social activity for me whose main purpose is to chat with new people over lunch. I do that too, but that is not why I am there.  I want to build my contact base and find buyers.  That is the point of networking.  To know and to be known.

In our ancient Western fairytales, the wicked witch turned the beautiful princess into a frog and she can only be released from the spell, if the frog is kissed by the handsome prince. That is all the potential client networking guidance you will ever need right there.  You have to kiss a lot of frogs, before you find the beautiful princess. You don’t know which of these people at the networking event is going to be the next client for you, so start kissing as many frogs as possible, from start to finish, if you want to build your business in Japan.

Gaining Buyer Trust When Doing Business In Japan

Trust is a big issue in Japan. The people we deal with in companies are salaried employees, who have probably been with that same company their whole career.  There is an escalator system here that carries you upward over the many years of your career.  “Steady as she goes” is the mantra.  They are primarily interested in gradually moving up inside the firm by making no mistakes. The best way of not making a mistake is to do nothing new or risky. 

Their aversion to risk precludes trying anything that might have a negative impact, even at the expense of denying the company significant business opportunities. There is little reward inside companies in Japan for risk taking and a big downside if things go wrong.  Everyone knows this, so everyone operates the same way – very cautiously. So when we approach a Japanese company, we have to think about how we can take away the risk for the individual we are dealing with. It might be testimonials from happy customers, statistical evidence, money back guarantees, warranties, escape clauses, etc. 

This timid buyer attitude toward doing new things is summed up by the saying that Japanese buyers "prefer the devil they know to the angel they don't know". By definition you are the angel they don't know, because you are offering a new product or service or an alternative to what they are using now. And you are foreign.

In the distribution system in Japan, there is a very complex food chain to work through. There are many layers and if you don't deliver, as you said you would, when you said you would, you endanger the whole interlocking food chain. Space is at a premium here, so there are not the massive warehouses full of inventory being held, as maybe we see in other more spacious countries. 

Everyone is trying to get by with as little inventory on hand as possible, but with the backing of a stock supply system that is totally reliable and highly efficient.  No Japanese company want to see their distribution system set on fire by a new player, they don't know well. The people they are dealing with now, whom you wish to supplant, have shown they can supply when needed and all present and correct each time.  Therefore buyers are very conservative about introducing a new, untested supplier. 

You imagine you have a strong price point advantage, which will tip the scales in your favour and help you to muscle your way into the market.  Not always true, because price is only one point of comparison being made by buyers, when weighting alternatives.  For example, when you are competing in the marketplace with the big Japanese trading companies, they take the risk away by providing very long payment terms.

They will have a much higher price than what you can supply, but their offer is less risky. The company can land the product, sell it and then pay the trading company later. Your discounted price requiring immediate payment can't compete with that risk free arrangement. 

You are in a hurry to get the Japan business going.  There is a lot of expectation back at your HQ and you are the one designated to make this happen.  Sadly, deals rarely get done in one meeting in Japan, so expect multiple meetings. That may mean multiple trips to Japan if you are not based here. Bosses back home don’t get that. “What do you mean you didn’t do a deal while you were in Japan?  You just wasted the firm’s monies on that trip, with no result, except for some nice sushi meals you had while you were there swanning around on the company’s dime”. 

The bosses may not get it, but things take a lot longer here, because companies have to gain consensus internally, about making a change to their supply arrangements. They are risk averse remember and doing nothing is the safest course of action.  It might take years in fact, before the buyer is comfortable to give you a try. 

This happens in my own training business here all the time. Companies we met four years ago, finally send one person to trial the training. It can drive you nuts, but this is how it is and if you want to play, then you have to pay. Western companies being driven by quarterly earnings and the stock price, have a hard time with Japanese long play timeframes.

Gaining trust is done step by step.  Ask for a small piece of their business to show your credentials.  Make it as low risk as possible.  They can test you and few times and then if they like what they see they can increase the volumes.  That is a much better proposition than an all or nothing approach of we went for it but we didn’t get the order we wanted.  You may not like it or agree with it, but slow and steady does win the race in Japan.  And nobody cares what you think sunshine.

Engaged employees are self-motivated. The self-motivated are inspired. Inspired staff grow your business but are you inspiring them? We teach leaders and organisations how to inspire their people. Want to know how we do that? Contact me at greg.story@dalecarnegie.com

If you enjoy these articles, then head over to dalecarnegie.comand check out our "Free Stuff" offerings - whitepapers, guidebooks, training videos, podcasts, blogs. Take a look at our Japanese and English seminars, workshops, course information and schedules.

About The Author

Dr. Greg Story: President, Dale Carnegie Training Japan

Author of Japan Sales Mastery, the Amazon #1 Bestseller on selling in Japan and the first book on the subject in the last thirty years.

In the course of his career Dr. Greg Story has moved from the academic world, to consulting, investments, trade representation, international diplomacy, retail banking and people development. Growing up in Brisbane, Australia he never imagined he would have a Ph.D. in Japanese decision-making and become a 30 year veteran of Japan.

A committed lifelong learner, through his published articles in the American, British and European Chamber journals, his videos and podcasts “THE Leadership Japan Series”, "THE Sales Japan series", THE Presentations Japan Series", he is a thought leader in the four critical areas for business people: leadership, communication, sales and presentations. Dr. Story is a popular keynote speaker, executive coach and trainer.

Since 1971, he has been a disciple of traditional Shitoryu Karate and is currently a 6th Dan. Bunbu Ryodo (文武両道-both pen & sword) is his mantra and he applies martial art philosophies and strategies to business.