Examine corporate decision-making through an Asian lens

For the past 30 years, through business challenges and opportunities, I’ve spent a significant amount of time in Asia. One of the things I’ve observed is that you can learn a lot by comparing how executive leaders deal with common issues, which varies greatly from country to country.

Some of the most profound differences can be observed in a corporation’s decision-making process as it deals with innovation, product development and long-range planning.

 

Making decisions through hierarchy

For example, larger companies in Japan operate in a very hierarchical manner with directives handed up and down throughout many departments, units and divisions before a decision is made. In a sense, there is no “top boss” in larger Japanese companies, which means key and sometimes critical decisions are made throughout a multi-level, complex organism.

This way of making decisions produces both good and bad results. Rash and unformulated decisions rarely occur, but unfortunately this decision-making structure often prevents larger Japanese companies from responding quickly to rapidly changing markets and challenges.

 

Closer to the customer

In contrast, many Chinese and Korean manufacturers in recent years have adapted a different model of leadership that puts a greater focus on customer demands and local marketplace control, rather than on strict adherence to consensus management.

In this model, responsibility and decision-making by local planning managers are closer to customers instead of always flowing from the top executive team.

This allows the Korean and Chinese companies to change more quickly (and successfully) than the traditional Japanese firms. They can rapidly spot trends and make course-corrections to take advantage of new opportunities.

A good place to find a practical example of this principle is to look at the consumer electronics and telecommunications industry.

The rapidly evolving demand for first laptops, then cellphones, then smartphones, then tablets and who-knows-what next demands the willingness of a company to change quickly and sometimes radically. The consequences of these changes can result in a huge success or an economic catastrophe.

Five years ago Samsung of Korea was falling far behind its competitors in producing advanced products to meet the demands of younger customers. Samsung fully embraced the rapid course correction philosophy and has greatly benefited from worldwide acceptance of its consumer electronic products.

Similarly, many Chinese firms have evolved from being copiers of technology to innovators by listening and quickly responding to their customers.

 

Striving for excellence

The lesson I have personally embraced from observing Asian companies over the years is to never be satisfied with what you or your company have accomplished.

Corporations all over the world must realize that past successes in any field are in no way an assurance or predictor of future success — and that includes management style, organizational culture and product planning and development.

It is OK to stop and celebrate a success tonight, but tomorrow you have to get right back at getting better, stronger and faster at everything you do.
Customer-driven continuous improvement in innovation, product development, manufacturing and marketing is not a key to success; it is a key to survival.