With Flexibility, U.S., Japanese Firms Can Follow Different Paths Together
by Steve Pollock

(Originally published in the Nikkei Weekly as part of the Japan Business Seminar column.)

Many U.S. companies see the Japanese market as a tantalizing international growth opportunity – but one fraught with challenges. One of the most critical involves how to achieve sales. This is especially difficult because the paths to sales success in Japan and the U.S. follow completely different maps.

I recently worked with a U.S. software company that was negotiating a sales partnership with a Japanese reseller. The U.S. CEO was worried about the slow pace of anticipated sales and the significant investment required to build the business in Japan. He expected the Japanese partner to grow sales at the same pace as in the U.S. – in other words, each rep at the partner should sell at least a half million dollars within the first year of sales.

I understood the CEO's urgency. However, his comments revealed a big gap between his and his Japanese partner's view of the opportunity. They also reminded me of the different approaches used by Japanese and U.S. companies.

For most Japanese companies relationships are at the core of all transactions. As a result, Japanese companies invest significant time getting comfortable with potential partners and vendors before they decide to move forward. Of course, Japanese clients have notoriously high expectations regarding products as well, but, if the relationship is solid, even serious issues can be overcome.

In contrast, U.S. companies are focused on the WIIFM ("what's in it for me"). They want to know exactly how the product or service is going to benefit them and how much it costs. Although U.S. customers generally buy from people they like and many embrace a strong partnership ethic, they ultimately look to contracts and the law for remedies to problems and tend to spend less time on relationship-building.

Japanese and U.S. companies often work from completely different calendars. The selling process in Japan can take months (or years) and involve countless meetings with people across the organization along with an interminable exchange of documents.

In the U.S., a sales process will often come to a head fairly quickly. A customer expects to hear the proposition in the first meeting (if not before), and, while a decision may require more meetings and negotiation, the conversation rarely continues indefinitely.

Finally, and to make cooperation more difficult, Japanese and U.S. companies use very different communication styles. Japanese companies are often very indirect and nuanced in their communications; from the American perspective, they can seem to be an indecipherable "black box."

In contrast, Americans often come across as too direct while also overselling their capabilities, thereby raising questions with the Japanese about their reliability as a partner.

Fortunately, the different approaches offer opportunity to those willing to adapt their style – and benefit from the strengths of the other. In particular, American urgency can help move the process forward more quickly, while the Japanese focus on relationships can lead to the development of a long-term partnership that can withstand the inevitable ups and downs as both sides seek to grow the business.

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