Expecting Success and Avoiding Failure - a U.S. - Japan Comparison

Failure is everywhere these days. Whether it's the Japanese prime minister resigning, U.S.-based Yahoo! Inc. firing its CEO, or friends and relatives who have lost jobs or houses, this is a tough period for lots of people in the U.S. and Japan. Although failure knows no boundaries, American and Japanese approaches to failure help explain fundamental differences between the two countries' business cultures.

On the surface, of course, both the U.S. and Japan have capitalist systems that provide excellent financial rewards to successful companies. However, at a more basic level, I see a significant difference in their operational motivations. The U.S. is a success-obsessed culture focused on individual achievement; the Japanese culture is much more concerned about failure-avoidance and team accountability.

There are many reasons for this difference. From their earliest days, children in the U.S. hear about the "American Dream" and are taught that anybody can become rich through individual effort and intelligence. In contrast, Japanese children learn the importance of fitting in and not bringing shame onto their community.

Success in the U.S. can bring almost unlimited rewards. In the business world, people such as Steve Jobs (Apple Inc.), Warren Buffett (Berkshire Hathaway Inc.) and Mark Zuckerberg (Facebook Inc.) started with little and have become billionaires many times over. But even less well-known executives can become exceptionally wealthy. Success also bestows a big ego-boost as well as recognition and access to even more opportunities.

In contrast, Japan does not reward its winners nearly as well. U.S. magazine Bloomberg Businessweek reported in 2010 that average CEO compensation in Japan was only one-sixth that in the U.S. There is a great deal of prestige that comes with being the president of a Japanese company, but the success of the business is generally attributed to the efforts of the team rather than just the brilliance of the leader.

Failure in the U.S. often does not exact a lasting price. Even well-known business leaders often failed at some venture or another before achieving success. A common job interview question asks the candidate to describe a failure and what he or she learned from the experience.

In contrast, the "downside risk" of failure in Japan can be severe. An individual who fails at a business venture in Japan may suffer lasting damage to his reputation, missing out on promotions and the chance to participate in subsequent ventures. Similarly, Japanese executives have fewer chances to abandon a failing company by just finding a new job.

Perhaps the sharpest contrast between the different ways of dealing with failure comes at the end of the road. In Japan, of course, the standard atonement for a business failure involves having the company president bow deeply and issue a very public apology for letting down those who depended on him. In contrast, Yahoo's recently fired CEO received $10 million severance, and yet refused to go quietly, calling the board that fired her a bunch of "doofuses." And yet, I will not be surprised when she turns up at another company or runs for political office!

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