Risk aversion or common sense?

One person's common sense, another's confusion?

Observed behavior

You’ve just left a meeting at which you presented the implementation plan of the latest global, or perhaps local initiative. It seemed to go well even though there were very few questions. As there was no disagreement and no objections were raised, you begin to move forward as planned. In the days that follow, you are made aware that there is concern, quite a bit actually, especially around a number of risks, some specific to Japan. They don’t seem particularly daunting risks so you address them quickly. Again, there is no real pushback, but neither is there any real agreement. The days pass and the situation continues to evolve, but still lacks clarity. People seem to be dragging their feet. You ask yourself, "Why all this worry about risk now? Why wasn't any of this brought up at the meeting? Isn't that what meetings are for? Why such an aversion to risk?"

Underlying mindset

Value vs Risk or Risk vs Value?

First and foremost, we need to look at value versus risk. In global business, we tend to look at 'value' first. If the value is high enough and the risk manageable, it may be worth it. In Japan, the tendency is to approach it from the completely opposite angle, considering 'risk' first. If the risk is felt to be too high, then it can be very difficult to get buy-in. Definitely safety over value. And, perhaps one reason why Japanese quality of service and product is so high. (Check out Toshio Yamagishi, a social psychologist for more the Japanese view on ‘safety’ from a societal perspective)

From a global perspective, Japanese can seem risk adverse. On the other hand, from their perspective, non-Japanese can seem too risk tolerant or even risk ignorant. Who's right is debatable and not always useful for getting the job done. The key challenge here is to how to influence the outcome, getting the buy-in you require to move forward at pace.

Considering the observed behavior can give us some clues. While this is only a business scenario, these excerpts highlight some common challenges. These include,

1. ‘There were very few questions.’ It’s more common in Japanese business to do some ‘Nemawashi’ or individual networking (‘Nemawashi’ will appear in a future post) to gauge others’ concerns and get buy-in before the meeting. Most will not ask questions publicly. And, yes, meetings are public. This is mainly because they won't want to put you, or themselves, on the spot. This is done not necessarily by conscious decision, but an automatic output of Japanese business etiquette.

2. Some concern: ‘In the days that follow, you learn that there's actually quite a bit of concern, especially around risks.’ Typically, there are a number of questions and concerns, just unvoiced. What happens, and this is common, is that people get together offline to discuss. This is when the real discussion often takes place. And it can happen while you're not there. Leaving you little chance to respond or influence.

3. ‘No real pushback nor agreement.’ There more than likely is ‘real’ pushback. Compared to global business people, Japanese tend to be much more subtle or understated in the voicing of concerns. This means that while they might object, it may not appear obvious enough to get on your radar. The Japanese, on the other hand, will feel that they have raised a concern, but that it went unacknowledged, or even ignored. You need to pick up on this to lead and influence. Remember, isn’t it less about who’s right, and more about reaching the desired outcome?

Potential fixes to influence outcomes

Quick fix: (About you adopting their perspective) First, always assume there will be concern and questions. If your team or organization is not speaking up or challenging you in meetings, then go to them.

1. Grab someone, individually, and say you want to run something by them to get their impressions. Don’t mentioned risks, yet.

2. Start with some background info to help them get comfortable with the context.

3. Just provide an overview as too many details can bog down the process in the beginning. This will allow you to gauge how much they understand and for them to ask clarifying questions.

4. Ask if it makes sense to them. Again a chance for questions.

5. Ask for their impressions. It may take time to get some. Be patient.

6. Next ask what risks or challenges they think others might bring up. By referring to what others may think, you begin to lessen any pressure they may feel.

7. Your nonverbal clues: Note that being relaxed and open, almost nonchalant, will also help to create an atmosphere conducive to sharing. Remember, Japanese are much more attuned to nonverbal cues than most, using them to aid their understanding of you and the situation. This is standard for Japanese. Careful not to noonverbally telegraph potentially negative feelings.

8. Repeat this with another 2-3 people, depending on the size your team.

A bit much? While this can seem elaborate or awkward at first, note that it mirrors the normal way Japanese interact and so they will find it perfectly natural. By showing that you are aware and interested in their views on risk, you develop stronger relationships and gain insight into their thinking. Your team will appreciate your efforts over time and will this help with the long term fix. And you can also revise your talk so it hits the ‘risk vs value’ mark in the preferred order. But don’t stop there. Bring about a discussion on how best to mitigate these risks. Use the same techniques as in my previous post, ‘Meetings: Input please…’

Long term fix: (About them adopting your perspective) While adapting yourself for the quick fix works on a number of levels, it may not always be the most efficient or effective. The next step in the evolution is to help your team or organization to better understand risk and how it is analyzed then managed in a global setting. Something still not generally taught in Japan.

1. The global value/risk mindset: Before you get into the mechanics, it is vital that they understand first the mindset of how value and risk are perceived in global business and then their own. (Use what was discussed above) Grasping this contrast between the two mindsets is where the ‘Aha’ moment occurs. Without this step, they will continue to only make use of their current view of risk, first and value, second. It will take time to leverage both. However, they need to be able to switch, when required, to the global business model of value and risk to be able to hold their own in global business environments.

2. Risk analysis & management: There are lots of books and courses on how to do this, but you can do it yourself quite easily. Just develop, with them, a list risks. Then analyze the probability of the risk occurring vs level of impact. Next list up the stakeholders and contrast each one’s level of power against their interest in using it. Finally, connect stakeholders to risks or even think of certain stakeholders as risk and analyze according. Then develop a plan to mitigate, transfer, accept or avoid those risks that have both a high probability and a high level of impact. You can do all this fairly quickly on a whiteboard or for ‘homework’.

Influencing perceptions: If you do this a number of times, you’ll find they’ll pick it up easily. The real key is to ensure that they really understand both the Japanese and global perceptions of value and risk. Try labeling, such as asking, “What’s the global vs Japanese view on risks in this situation?”

Comment to customize: I can only provide a generic fix here as personalities, experience, environment and a potential host of other variables should be taken into consideration. Proceed with care. If you want to share some details, I may be able to support. So feel free to ask questions or just let me know how you go in the comment area below.

#strategically #performance #risk #pushback #global #business #value #japan #japanese #mindset #behavior #perspective #buyin

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