The Year Ahead 2024: Forecasts and Surprises

Ten twists and turns that could make for an interesting Year of the Dragon.

Forecasting is both an art and a science. Quantitative forecasts are based on probability models that cannot escape the assumption that the future will be a replay of the past. Qualitative predictions are based on a combination of experience and intuition. Like a beautiful Bach sonata, the former follows a predictable logic. Like an inspired jazz solo, the latter delivers a genuine surprise that you did not expect but cannot live without once you’ve heard it. The only certainty we have is that 2024 will bring both—existing trends evolving and genuine surprises.

I wish a happy, prosperous, and healthy New Year to you! And now here are my forecasts and possible surprises for 2024:

1. Japan’s inflation and growth outpace the United States.

We will see a full decoupling of the US–Japan business cycle in 2024 as America faces a sharp slowdown due to the 2023 US rate hikes cutting down both consumption and capital expenditure. In contrast, Japan’s economy will stay surprisingly strong, as neither the Bank of Japan nor the Ministry of Finance tighten.

2. Japan’s M&A boom goes global.

With the US recession creating opportunities to buy US companies and assets at significant discounts, Japan’s merger and acquisition activity will expand. Surprise: a major Japanese financial institution will buy a US bank, insurer, or payments company.

3. Japan’s MBO/LBO boom accelerates.

Spurred by pressure from shareholders and stock exchange, as well as low debt financing costs, management buyouts and leveraged buyouts will continue. Surprise: 2024 may be the first year when more companies go private and delist from the stock market than new startups going public and listing via IPOs.

4. Japanese CEOs step out of their comfort zone.

Rather than just relying on in-house R&D teams, Japanese CEOs will start to buy startups for future growth. One reason for US corporate dynamism is the aggressive use of “outside” innovation to supplement, improve, or disrupt “inside” businesses. Ninety percent of US startup exits are acquisitions, while in Japan, 90 percent are IPOs. Mark my words: Japan’s new generation of CEOs are taking risks and are not afraid to try and make 1 + 1 = 3 … or 4.

5. Japan’s corporate governance goes global.

So far, Japan’s corporate governance reform has been one-way, importing US “best practices” into Japanese boardrooms. A Japanese CEO appointed to a Wall Street firm’s board would be proof that Japanese governance has truly become world class. A positive surprise, yes. But if US multinationals are serious about multi-stakeholder governance, there is much to learn from Japan’s corporate leaders.

6. Japan launches its own Defense Advanced Research Project Agency.

Rising defense spending demands a fundamental rethinking of collaboration among universities, scientists, private enterprise, and public policy. Without fundamental change, the risk is that high defense spending will bring little or no positive benefit to Japan’s global competitiveness or domestic economy. The sooner Japan’s elite can agree on the rules and institutional governance for dual-use technologies and their scalable commercialization, the greater the certainty of both private and public spending on defense yielding positive multipliers.

7. Japan deregulates home-helper visas.

The combined problems of a growing labor shortage, a falling birthrate, and more Japanese women aspiring to professional careers cannot be solved without outside help for families. A very positive surprise would be if Japan followed the Hong Kong and Singapore model. There, professional couples can sponsor home helpers, with proper supervision and governance by local authorities. This is a pragmatic solution to reverse the declining birthrate and to reduce the runaway costs for public social and medical support for children and the elderly.

8. China synthetic biology moonshot delivers domestic food security.

China is the world’s largest importer of food. Dependence on the global food supply is the single biggest challenge for China’s leaders. Public and private investment in synthetic biology and the development of lab-grown and tech-assisted food is huge. The question is not if, but when, a supermassive scale-up solution will be announced by China’s biotech leaders. A science-based breakthrough on food-security for China—and thus the world—would supersize China’s credentials as the rightful global leader she aspires to become.

9. Elections shift alliances.

While all eyes are on the 2024 US presidential election in November, the vote in India in April or May could bring a big negative surprise. If Prime Minister Narendra Modi loses reelection, the impact could be far-reaching—not just for the Quad alliance comprising Japan, the United States, Australia, and India, but also the leadership of the emerging alliances around the Global South.

10. Germany wins Euro 2024.

Sunday, July 14, will bring the final of the UEFA European Football Championship. I am German, so naturally, I support Team Germany. But they have been playing shockingly poorly, and their performance has only gotten worse after they lost to Japan in the 2022 World Cup. So, the biggest positive surprise for me in 2024 would be Germany actually winning the Euro 2024 championship—especially since the final is played on the French national holiday, Bastille Day.

A Matter of Demographics

Connecting four megatrends that will shape Japan’s future.

Yes, Warren Buffett had already started buying Japanese companies two years earlier, but it was in 2023 that the global mainstream followed. The combination of cheap yen, geostrategic realities, and a newfound can-do attitude among domestic leaders has put Japan back in play as a global contender. Leaders in finance, industry, and innovation around the world are now pressed by their boards to develop concrete Japan strategies. Yokoso! Welcome back! What took you so long?

This Time Is Different

Before we get too carried away by the current Japan hype, let me outline some key forces that, in my view, will work to create sustainable Japan opportunities over the next decades, for both global and domestic companies. Here are the four Japan megatrends you and your corporate strategy must seek to exploit.

1. Demographics Forces Industrial Consolidation

Japan has about 3.6 million companies, 2.5 million of which are owned and run by founders who will be over 70 years old next year. Of these, 1.6 million do not have a successor, a son or daughter interested in taking over.

This demographic reality has unleashed a growing tsunami of mergers and acquisitions (M&As). Businesses that were never for sale are now up for grabs. Your chances of partnering with or buying a Japanese company have never been better. The M&A wave will get bigger. Roll-ups and industrial consolidation will create unprecedented opportunities for global players to raise their market share and profit from increased economies of scale.

2. Freeing Up Household Wealth

Japanese households have accumulated some $30 trillion of wealth. About $20 trillion of this is in financial assets. The remaining $10 trillion is stashed away as tansu yokin, the famous mattress money.

Again, demographics is key to unlocking real structural change. About $12 trillion of these household financial assets are owned by people aged over 70.

This means $5 or 6 trillion—or 1.3 to 1.5 times Japan’s current gross domestic product—will become unfrozen over the next decade. Even after inheritance tax, this implies a significant boost to the purchasing power of Japan’s younger generation.

Make no mistake: the legacy of the legendarily high savings rate of Japan’s baby boomers will significantly boost next-generation purchasing power. Most economic forecasts completely ignore this wealth transfer effect, thus underestimating the potential growth in domestic demand.

3. From Seniority-based to Merit-based Pay

The war for talent is intensifying and will only get worse. Japan’s young generation feels its power, and the tables have turned. Graduates are no longer begging for jobs. Companies are begging increasingly scarce graduates to join. And retention of employees is becoming tough. According to several studies, as many as one in five University of Tokyo graduates now quit their initial employer within the first five years.

Importantly, employees don’t just want higher pay. They also seek greater responsibility and impact. If you joined a top Keidanren company in the 1960s, it took on average 13 years for you to become the general manager. Today it takes 24 years.

Companies which inspire and empower their employees will pull away from those that insist on the old ways. Labor mobility will surge, and companies that offer genuine and transparent career planning and merit-based compensation are poised to move ahead. Here, global companies still have a lead, but as local Japanese companies adapt, the war for talent—and thus the need for increasingly creative leadership—will intensify. The net result? Productivity will surge, and so will employee incomes—yet another reason why standard economic forecasts are too pessimistic on domestic demand.

4. Open-Door Japan

Japan will become an immigration powerhouse. Before the pandemic, the country was on track to accept about 150,000 new non-Japanese employees per year. This more than doubled to almost 350,000 in the first half of 2023. There are now approximately 3.2 million non-Japanese residents of Japan, up from barely half a million 30 years ago. Visa and permanent-residency requirements continue to ease. Most importantly, the biggest obstacle to employing non-Japanese talent—seniority-based rather than merit-based compensation—is beginning to change. All said, it is now perfectly reasonable to expect that about 10 percent of employees will be non-Japanese by 2030. That’s more than double the current rate of just below four percent.

Common Theme

Underlying these four Japan megatrends is demographics. Far from being a negative—fewer people must equal lower consumption—Japan’s demographics will turn out to be a catalyst for positive change.

• Industries will consolidate, thus allowing greater efficiencies and economies of scale.
• The mattress-money wealth of Japanese households will be freed and reenter economic circulation.
• Increasingly scarce labor will be empowered and gain purchasing power.
• And global talent will build careers and make their fortunes here in Japan.

Importantly, all these forces represent real structural change that will remain in place for the foreseeable future.

Predictable. Reliable. Full of opportunity.

Welcome back, Japan.

In Praise of the Salaryman CEO

Japanese corporate leaders are much better than their reputation.

They are not really part of the global Davos jet set. They don’t fly around the world in their private jets. Many still proudly print the office fax number on their business cards. And in the age of the short quip, they lack a strong (or any) presence on social media. They even very much prefer to stay silent in investor-relations or press meetings.

But if you’re looking for extraordinary resilience and all-around competence to get the job done, Japan’s salaryman CEOs and their teams actually have a very impressive track record.

In fact, the data strongly suggests Japanese salaryman CEOs have absolutely nothing to be ashamed of in comparison with the superstar CEOs of Wall Street.

Decades of Growth

Since 1995, Japanese listed companies have seen their top-line sales basically stagnate, up a mere 1.1 times in 2022 from their 1995 level. But there was a whopping 11-fold surge in profits over the same period.

Anyone who has ever invested in or run a business knows how impossibly difficult it is to grow profits without the tailwinds of rising top-line sales. For one year, maybe. But for 30 years? Clearly, Japanese salaryman CEOs must have done something right.

Meanwhile, since 1995, superstar CEOs in the United States delivered a 6-fold increase in profits, generated by a tailwind of top-line sales rising 3 times. Of course, the Wall Street superstar CEOs deserve to be proud of having delivered such profits over the past 27 years. But compared with the 11-fold surge produced by Japan’s salaryman CEOs, the US superstar performance looks rather unimpressive—particularly since the salaryman CEOs got no tailwinds from rising sales. No wonder Warren Buffet is impressed by Japan’s Wall Street counterparts.

Pay for Performance

Interestingly, the impressive performance of Japanese salaryman CEOs has been reflected in their compensation. Since 1990, pay for the top CEOs has almost tripled. So, there is pay for performance in Japan for CEOs—profits up 11 times, compensation up a more modest 3 times, but still in sync with performance.

Meanwhile, in the United States, the link between corporate performance and CEO compensation is much tighter. CEO compensation has mirrored the rise in profits, both basically marking a 6-fold jump since 1990.

The biggest difference between the salaryman CEO and the superstar CEO is, of course, the absolute gap in compensation for the chief executive position relative to average employee pay. In Japan, this is now just about 12 times on average, with the top 50 CEOs making 50 times.

On Wall Street, it’s a different world altogether; the average annual salary of a CEO now is just under 400 times that of their average employee.

Put another way, a Wall Street CEO earns in one day what one of their employees earns in a year. But in Japan, it takes the 50 highest-paid CEOs about a week, and the average CEO a month to bring in what their staffers make in one year.

Don’t get me wrong. This piece is not about whether US-style or Japanese-style corporate leadership is better. It is about highlighting some of the actual performance indicators and, most importantly, demonstrating that Japanese corporate leaders did in fact deliver what had been asked of them. They focused on profits, profits, profits.

Future Focus

So why was this tremendous achievement by salaryman CEOs not reflected in higher share prices? Unfortunately, the answer is very simple: salaryman CEOs did not invest in their businesses. Since 1995, the capital expenditure (capex) of listed companies in Japan has declined by more than 10 percent. In contrast, capex for US listed companies has surged by more than 150 percent over the same period.

Also, Wall Street CEOs raised their employees’ compensation by about 90 percent since 1995, while Japan’s salaryman CEOs actually managed to decrease employee compensation almost 25 percent over the same time frame.

“Since 1995, Japanese listed companies have seen their top-line sales basically stagnate, up a mere 1.1 times in 2022 from their 1995 level. But there was a whopping 11-fold surge in profits over the same period.”

Make no mistake: share prices reflect potential returns on future corporate performance, and dreaming about future performance is basically impossible without corporate leaders investing in both human and productive capital.

The good news is that there’s absolutely no reason that salaryman CEOs cannot become great investors in their companies. In my view, because there has been a change in three parameters—human capital, technology access, and economic security—a capex and investment super-cycle is on the horizon in Japan.

A labor shortage and war for talent are forcing a complete rethink of human-capital deployment. One result is rising wages, but more important will be the growing focus on pay for performance and a shift towards genuine career development, i.e., a break with the lazy pay-for-seniority culture.

As workers grow increasingly scarce, machines and artificial intelligence will be deployed more broadly.

Ironically, the previous reluctance of salaryman CEOs to invest in better IT may turn into a classic backwardness advantage. If you’ve never embraced cloud computing, you now can go straight from hanko to blockchain. Japan’s DX protocol has a good chance of becoming best in class in the same way shinkansen bullet train technology set the global standard for high-speed railways.

National economic security and changing geopolitical realities will force new investment in supply chains and production facilities, as well as research and development centers.

Japan should be proud of its salaryman CEOs. For the past 30 years, the focus has been on growing profits by cutting excess costs (and debt), which has delivered in impressive ways. Now, the goals have been reset. You must invest and accelerate the growth of your business. Like Warren Buffet, I have no doubt they can deliver.

Executive Upgrade

Why the right leader matters … and where to find them

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Presented in partnership with Robert Half • Photos by Kayo Yamawaki

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The need for good leadership has never been more pronounced. It impacts hiring, retention, employee engagement, and productivity. And its importance in landing complicated organizational shifts through successful change management is highly visible in the market right now, said Nick Scheele, managing director of Robert Half’s Executive Search division.

“What we have observed over the past several years is that many global organizations—and this includes both Japanese and foreign—have been making a concerted effort to upgrade their leadership capability,” he added.

With more than 70 years of history, plus 300 locations and some 14,000 employees around the world, Robert Half has a long and deep view of the talent market. “Simply put, we have a global network that’s unlike any other and spans nearly a century of relationships, which we can leverage,” Scheele explained.

Robert Half provides contract and permanent placement solutions for finance, accounting, technology, marketing, and HR in Japan. Protiviti, a fully owned subsidiary of Robert Half, offers internal audit, risk, business, and technology consulting solutions and we regularly partner to offer clients a full suite of services.

What powers it all is their global network. Fellow Executive Search Managing Director Andrew Sipus said this pool of diverse expertise and experience creates synergy between Japan and the United States, as well as the rest of the world, when it comes to Executive Search.

“We are experts in providing bespoke retained search advisory services for finance, accounting, technology, marketing, and HR sectors, with more than 100 Executive Search colleagues around the world who are just a phone call away,” Sipus explained. “If we look to the United States as an example, our Executive Search division received the Forbes 2022 accolade as America’s Best Executive Recruiting Firm, which is certainly a testament to the quality of relationships we have at our disposal … we can easily tap into them, their resources, and their markets to understand the latest market conditions and trends in whatever area we need to better understand.”

“Globally, Robert Half and Protiviti have been named by the Human Rights Campaign Foundation for five consecutive years as one of the best places to work for LGBTQ+ equality.”

Robert Half Japan regularly connects with peers from North and South America, Europe, the Middle East, and the Asia-Pacific region to gain the latest market insights. This helps them successfully fill difficult searches that require unique resources and expertise.

Such searches can arise as Japanese companies look to expand their diversity, equity, and inclusion (DEI) as well as remain competitive in areas evolving beyond traditional approaches to management.

Sipus recalls one such case.

“We scanned the market many times over and found that what our client was looking for simply didn’t exist in Japan; or, if it did, it was untouchable,” he explained. “There were no more than a handful of candidates, and even then, they had only 20–30 percent of what the client required. What that meant for us is that we had to be very creative. We had to do a lot of coaching with the client, and we had to look outside Japan. Through this rigorous process, we were able to identify Japanese talent located overseas, and the client was supportive of relocating them back to Japan.”

Nick Scheele (left) and Andrew Sipus

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Robert Half has also helped companies factor DEI into their Executive Search process and consider non-traditional candidates.

“In the case of Japanese companies, we’ve shown them what other organizations are doing and how those organizations are benefiting from more inclusive practices,” explained Sipus. “This could mean highlighting impacts on engagement, creativity, employer branding, and how that leads to gains in productivity and overall business health. We can use tools such as market maps, which give a more accurate sense of the distribution of talent, to counter or confirm the assumption that there are no solutions in the market. This helps our clients identify opportunities where they can make strategic hires using DEI and relevant data sets as a consideration.”

Robert Half itself is awash in diversity. The nearly 100 employees in the Japan office represent 22 nationalities. And globally, Robert Half and Protiviti have been named by the Human Rights Campaign Foundation for five consecutive years as one of the best places to work for LGBTQ+ equality. They have also earned a perfect score on the foundation’s Corporate Equality Index, a national benchmark for US businesses’ dedication to LGBTQ+ equality in the workplace. They have also been selected for the Bloomberg Gender-Equality Index for the fourth consecutive year, for their commitment to promoting equality, creating opportunities for women to succeed, and providing a culture that supports diversity.

Is Robert Half’s Executive Search division the right choice for you?

Scheele encourages those considering hiring leadership talent to think about the level of engagement they’d like, the level of services required, and what it is going to take to deliver the talent sought. “If you need a bespoke, dedicated project team that won’t simply present you with profiles but will manage the entire process and fully represent your interests as an extension of your talent acquisition and employer branding, then Robert Half’s Executive Search division is an ideal fit.

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Learn, connect, and get inspired at Robert Half Japan networking events!

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Spirit of Yozan

How a samurai reformer inspires a new generation to take the lead and succeed

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Presented in partnership with Jarman International K.K.

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The death of a close friend at college prompted Tohoku native Hiroaki Miyajima to pursue a career in advertising in the United States. Having returned to his hometown of Yonezawa, Yamagata Prefecture, in 2011, he is now part of a local business collective whose mission is to secure the town’s future prosperity.

Place of Inspiration

Those not familiar with the Tohoku region, in the far north of Japan’s main island of Honshu, may be excused for being unaware of Yonezawa. But this landlocked town has inspired some of the nation’s most successful executives and one of the United States’ best-loved presidents. When John F. Kennedy was asked after his inauguration to name a Japanese figure whom he respected, to the surprise of the Japanese press corps he answered with the name Yozan, a clan leader who ruled the domain of Yonezawa during the 18th century.

Yozan Uesugi inherited a Yonezawa impoverished by profligate leaders and entrenched interests. Heavily influenced by his teacher, Heishu Hosoi, who saw it as the duty of rulers to put the interests of their domains above their own, Yozan swore an oath to restore the prosperity of Yonezawa and its people. He is highly admired for his radical economic reforms and being an exemplar of frugality.

In Yonezawa, the figure of Yozan looms large, and in no place more so than Kojokan High School, which he founded in 1776. The school seeks to instill a sense of service and importance of action summed up by one of Yozan’s most famous sayings: “For all things, try and you will succeed; do not try and you will not succeed. Lack of success is merely due to lack of trying.”

Intellectual Foundation

The Ukogi collective, established by Miyajima and several other Kojokan graduates, channels the spirit of Yozan in a bid to grapple with the issues facing Yonezawa and many of Japan’s rural areas. The name Ukogi is that of a deciduous shrub that Yozan promoted for use in making hedgerows, while the edible leaves can serve as a food source in times of famine. Use of the shrub symbolizes the importance of creative thinking and self-reliance, which Yozan stressed to his people.

Collective member Yohei Sano, who helps with the family fish market, has a background in legal philosophy and studies local history in his free time. Known as The Professor, he is a quiet contrast to the ebullient Miyajima and provides Ukogi’s intellectual foundation. Synthesizing the virtues and lessons of the past, he is developing the philosophy of a restoration based on sustainable development and employing public–private sector cooperation. Put simply, Sano said, “I want to make Yonezawa a place to which the next generation will want to return and make their life.”

The speed of change in Japan can often be glacial, but Yozan overcame the powerful social and economic forces of the 18th century to restore the prosperity of Yonezawa. Ukogi is aiming to instigate a second restoration and make Yonezawa a place that once again inspires beyond its borders.

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Going Long on the ACCJ

Investing yourself in the chamber is a great investment in Japan

In keeping with this issue’s theme, I’d like to highlight an alternative form of investing in Japan that is uniquely available to members of the American Chamber of Commerce in Japan (ACCJ): taking on a leadership role at the chamber.

As Japan’s most active and influential international business community, the ACCJ plays a vital role in improving the country’s business environment. As an ACCJ leader, you can put your experience to work to create lasting benefits that extend far beyond the scope of your present role.

With more than 60 active committees and a broad, best-in-class advocacy program, the ACCJ’s true strength is the expertise and engagement of its members. Serving as a leader in an organization with such bench strength and influence is an investment that can pay meaningful dividends.

For younger executives, it is a way to develop leadership skills and networks to help build your career. For mid-career executives, it can be a great stepping-stone toward future board engagements, career advancement, and professional fulfillment. For senior executives, it’s a chance to give back to the communities in which you’ve flourished, leverage your skills in a more diverse environment, and help mentor the next generation of leaders.

Continuity

This year, the ACCJ board and I have launched a new focus on the resilience and sustainability of the chamber. We appreciate our active leadership and want to strengthen it by encouraging development opportunities in which others—including new members—get involved as leaders. We’ve asked committee chairs and vice-chairs to develop succession plans and to create openings for more members to take on leadership roles.

We believe that having a pipeline of leaders and encouraging rotation will lead to a more dynamic and vibrant chamber. The ACCJ has long been a leader on the diversity front, and we’re challenging ourselves to energize our organization with even greater diversity at all levels. Both these initiatives create tremendous opportunities for interested members to invest their time and expertise in the future of business in Japan.

Payoff

Having a leadership role in the chamber can provide a different experience compared with one in the private sector, as well as opportunities to hone your skills or develop new ones. The ACCJ is much less hierarchical, and more consensus-driven, than many private-sector organizations. As a volunteer body, the chamber can provide a refreshing change of environment as the use of persuasion more than authority is key when navigating the diverse opinions and priorities of the membership.

For many, the ACCJ represents a great opportunity to fine-tune the type of management skills required to meet the needs of today’s workforce. For others, it offers a “mental gymnasium” in which to focus on something outside the usual routine. And for all, it’s a great way to expand your network, get involved in meaningful change, and broaden your professional experience.

Get Started

How do you get involved? A great first step is to speak to members who are in leadership roles today. Ask them about their experience and seek their input on areas where your skills might be put to best use.

For committee roles, speak to the ACCJ programs team or the current leaders of the committees in which you are interested. For Board positions, the Nominations Committee launched their self-nomination campaign in July and is seeking members who would like to put forward their name. We highly encourage self-nominations and welcome anyone who would like to contribute their time and energy.

I have been involved with the ACCJ in various capacities for the past six years, was a member once before—when previously living in Japan—while my parents were both governors in the 1980s. I can tell you that it has been a very rewarding and productive relationship for me, and I know that my parents were proud to be part of the positive changes the chamber has helped to foster in Japan. I want more members to have that experience, and I invite you to take on a leadership role. It’s an investment with a guaranteed high rate of return.

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My Leadership Journey

ACCJ-Kansai CEO Series: GE's Eriko Asai shares how to stay resilient during uncertain times

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Since 2015, the American Chamber of Commerce in Japan (ACCJ) Kansai chapter has hosted the CEO Series, an annual collection of speaker events featuring top executives from leading companies. The sessions are very popular due to their intimate and insightful nature, and the glimpses they offer into the lives of successful leaders. Attendees leave inspired and with actionable advice to help them improve their work lives, while the candid discussion is especially valuable for young professionals starting to build their careers.

On May 19, Eriko Asai, president of GE Japan and ACCJ chair, spoke at an event co-hosted by the ACCJ-Kansai Business Programs Committee and Diversity & Inclusion Committee. She revealed what she had learned on her way to becoming GE Japan’s first female president.

“Today, I’m going to share with you my leadership journey and some of the challenges I’ve experienced over the years that helped me develop my leadership skills and keep myself resilient during uncertain times,” she said.

The landscape has changed significantly since Asai took the helm of GE Japan in January 2018, and the company currently is undergoing its biggest business transformation of the past 128 years. “One of the most important jobs, as a leader, is to drive the cultural transformation and make a difference,” she noted.

Milestones

Asai opened her presentation with a slide labeled “Leadership Journey” on which she charted the major events in her life and career, beginning with her birth in the UK.

More than just a visual representation of education and job changes, the chart tells a story that Asai believes has great value. “I highly recommend that you write your journey like this, because it helps you reflect on who you are, your strengths and weaknesses, why you think about something a certain way, what you care about, what has been consistent in your career journey, and where you want to be in the future,” she explained.

One thing that this writing exercise brings to the forefront is self-awareness which, Asai said, is such an important part of the leadership journey. Noting that her rise to company president was a zigzag, not linear, she outlined her career progression and the skills she learned along the way—a particularly valuable way of looking at professional development and staying the course.

“It’s very important to be intentional about your journey, according to your life stage,” she explained, breaking down the phases of career progression by age:

• Twenties: challenge yourself
• Thirties: work–life balance and expertise
• Forties: leadership
• Fifties: investing in the next generation

When she moved to Japan at age three, to Australia at age nine, and then returned to Japan two years later—all due to her father’s work with a trading company—Asai learned three key skills that would help her become a leader:

• Survival
• Listening
• Adapting to change

Two more skills were added when she chose to study at a UK university, before going to work for Sony Europe in Germany—despite speaking no German:

• Being the minority
• Communication

When she began a series of transitions in her thirties—shifting first to government affairs with Microsoft Corporation, then to healthcare with GE Healthcare, during which time she also served as director of the American Medical Devices and Diagnostics Manufacturers’ Association, later expanding her role to energy and finally becoming president of GE Japan in her late forties—she added two more key traits:

• Self-confidence
• Resilience

Now that she is president, she has taken on roles that help her invest in the next generation. This includes serving as chair of the ACCJ. And, while she leverages her experience to help others grow, she finds herself also refining skills such as:

• Developing people
• Building teams
• Crisis management

“I have lived in many places, in five countries, and have always been a minority in those societies—so I know how it feels when your voice is not heard, how painful it is to be left out with no means to respond,” she said. “Although I didn’t know the word ‘inclusive’ when I was very young, I came to understand what inclusive leadership looks like through my experiences in the early part of life. I’m sure many of you have had similar experiences. It’s very good to reflect on those and think about how you can apply what you learned earlier in life to your workplace today.”

As she noted, her path has zigzagged, so it is important to remember that you can learn at any time. “Leadership is all about acquiring skills at any point in your life. If you didn’t have a particular experience—for example, a chance to live abroad—earlier in your life, you can always do something different in your current life and practice adapting to the change.”

Pandemic Leadership

Next, Asai talked about the current situation and the need for leaders and teams to work together when dealing with a crisis such as the coronavirus pandemic.

“This is a moment when leadership really matters,” she said. “We need to prepare for the worst-case scenario and make sure that people understand the guidelines we have put in place. This takes self-awareness and imagination.”

She said that, in such situations, it is important to follow up with employees who may be feeling left out, or who find it difficult to talk with a manager. “We need to be creative about supporting them in making the work-from-home experience comfortable.”

At the start of the pandemic, Asai set up the national crisis management team for GE Japan, to help it cope with Covid-19 and the potential disruptions to business operations. By working together, helping everyone understand the risks and importance of establishing and following safety guidelines, and listening to employee concerns so that they might feel comfortable and adapt, GE Japan was able to continue being productive and secure.

Once everyone had become accustomed to the new procedures and workstyle, she handed over related responsibilities to the business leaders, who then managed their units and teams on their own.

Strategy and Policy

Expanding on GE’s business transformation, Asai highlighted the importance of focus.

“GE has a 128-year history, but we have really changed our portfolio over the past couple of years,” she explained. “We used to have businesses such as capital, plastics, and even media. But we have divested ourselves of most of the non-core businesses and now are focusing on infrastructure.” The three areas of the strategy are:

• Energy transition
• Precision health
• Future of flight

In terms of policy, GE is working with governments around the world to implement rules and regulations that harness innovation while ensuring a sustainable future. Three key policy areas are:

• Decarbonization
• Decoupling
• Digital transformation

Highlighting the last of these, she reminded attendees that “the ACCJ just released the Japan Digital Agenda 2030 report, which provides comprehensive guidance as to how Japan should leap from here, given that the government is focusing on establishing a digital ministry and there are a lot of changes to come. It’s an important time for the ACCJ to be putting forth a position on this, and we are also doing so at GE.”

Building a Culture of Success

“To make this business transformation, one of the most important jobs as a leader is to drive the cultural change,” Asai said, explaining that, at GE, 50 percent of a team member’s review score is based on performance and 50 percent on leadership behaviors, of which the company has three:

• Act with humility
• Lead with transparency
• Deliver with focus

“When we talk about acting with humility, it sounds obvious. But it’s also surprising that we are talking about it at this point in GE’s long history,” she said. “We are very proud of our technology, but because we are so proud, we have become a little bit arrogant. So, the questions are: How can we become more humble? How do we behave with humility? What does humility look like? We need to discuss and debate this as a team.”

She added that humility is a very important starting point for leadership behavior. “If you think something is wrong, you should say so. We have to be open to this. It has to be a culture of welcoming feedback and acknowledging mistakes.”

Transparency, she explained, goes hand in hand with humility, because without transparency, people will not raise issues and you cannot solve problems. The worst-case scenario for a company is not having the bad things reported up to management level.

“Trust is the base of this transparency,” she said. “And this also goes for leaders sharing bad news with the team in a timely fashion, because, without leaders exercising transparency, the team will not have the courage to share bad news themselves. It goes both ways.”

Delivering with focus relates to our ability to manage the demands of modern life, where it is easy to become distracted or be drawn into doing a task that is not the highest priority.

“In a world where we have so much work to do, we really need focus and speed. And being able to focus on the most important thing is a continuous challenge,” she said. “It is about ruthless prioritization and practice, and I am continually struggling to do that myself. Priorities are so important.”

Takeaways

In closing, Asai recapped five points that she believes can lead to a successful and rewarding career—one in which you might also zigzag your way to the top:

• Leadership is about continuous learning
• Focus on building trust
• Embrace awareness and imagination
• Be mindful of how you use time
• Take control of your life and have fun!

“We live in an uncertain world, so constant change is the norm,” she said. “We are never going to be perfect, so we need to be humble and learn from others. The good news is that you don’t have to be perfect, and you don’t have to know everything, because there’s no way to know everything.”

Building trust, Asai noted, takes time. But “speed of trust,” as she calls it, is very important because when there is trust you can get work done faster.

Being mindful of how you use time also is critical, she said. “In my case, I need to spend about 20 percent of my time reflecting and really thinking deeply, without meetings, and 10 percent or more on people development, talking to people—especially young talent who have points of view to share—and spending time with them outside my work.

“And, obviously, sleep and exercise—all the things that keep you healthy—must be tended to, so it’s very important to carve out time in your schedule for that,” she added in closing. “Making sure you are healthy is, in the end, bringing a healthy spirit to work every day.”

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