The Journal The Authority on Global Business in Japan

Times are tough for businesses in Japan—perhaps the tough­est they have ever been for some of us. The coronavirus pandemic has meant fewer customers and falling income; growing pressures and a scramble to recalibrate and refocus. The crisis has bitten deeply into our reserves—both corporate and personal—and we are having to adapt to the new realities with which we are faced. But we have been here before. And we have emerged from those earlier difficult times.

There were the oil shocks of the 1970s, the bursting of Japan’s economic bubble in the early 1990s, and the Great Hanshin Earthquake in the middle of that decade. Then came the Lehman shock and the global financial crisis in 2008, before the country was uniquely affected by the Great East Japan Earthquake and Tsunami of March 11, 2011. But, each time, business has learned its lessons and bounced back.

To find out how those who lived through these challenges see Covid-19 and the future, The ACCJ Journal talked to 10 members who have been part of the American Chamber of Commerce in Japan for at least 20 years.

BILL BISHOP (30 YEARS)
It was in the midst of a typhoon in July 1974 that Bill Bishop arrived at Yokota Air Base, and on his first night in Japan he was roused from bed by an earthquake. It was, he admits, quite a welcome for a young man from the Badlands of South Dakota.

And while the majority of his US Navy colleagues were counting the days until they could leave Japan, Bishop put his time and skills as a navy photographer to far better use.

“Having finally seen beyond the horizon, I felt as though I had discovered the world and wished only to see more of it,” he admits.

He studied in mainland China, at Sophia University in Tokyo, and at graduate school at Temple University in Philadelphia before returning to Japan in 1984 to run a general trading company. Two years later, he was back in the United States working for Japan’s Ministry of Foreign Affairs in Kansas City, Mo. That led to the post of director of East Asia operations for the State of Indiana, where he set up offices in nearly every major capital in the Far East.

He subsequently worked in the pharma industry for Eli Lilly and Company, Wyeth, LLC, as well as Becton, Dickinson and Company, where the importance of a shared social goal—beyond the pursuit of corporate profits—was reinforced.

“Over the past 40—going on 50—years, since my first contact with Japan, the country has experienced many challenges, some brought on by natural disasters and others by economic or systemic failures,” he said. “The lesson of the Japan ‘bubble economy’ and its aftermath seem to have not yet been learned. But the lessons learned in the Kobe earth-quake of 1995 were fully deployed during and after the Tohoku earthquake in 2011.

“The point is what can companies do to reach out during such disasters,” he said. “Strategies that include philanthropy, CSR and shared value are all valid. Every circumstance is unique, as are the ways to address it.”

But the coronavirus is “an entirely new kind of challenge.”

“It is best during these stressful times to focus on what you have rather than what you are missing or can’t have right now,” he suggested. “Most of all, it is important to focus on the ones you love and to be aware of how your behavior can negatively impact others. The silver lining in these kinds of disasters might be how they tend to bring families and loved ones closer together and, hopefully, how they focus all of us on the things that are really important in life.”

It is best during these stressful times to focus on what you have rather than what you are missing or can’t have right now.


ANNIE CHANG (31 YEARS)

Ever since she first arrived in Japan from her native Taiwan in June 1981, Annie Chang has held firm to the belief that even
in the most difficult of times, you must hold on to a positive outlook. As long as you have your health, she says, then you will be able to rebuild a business.

Originally from Taichung, Chang worked in a Chinese restau­rant immediately after coming to Tokyo and then moved to a shop selling books and stationery. A weekend job in a com­­puter company evolved into computer sales, and then her own company training people how to use software. More than three decades later, AC Global Solutions Ltd. has expanded into IT recruitment and career counseling.

Of all the bumps in the business road over that time, the Lehman shock was the most traumatic, she said.

“We lost a lot of money at that time and we had to shut down the training side of our operations to save the recruiting business,” she said. “It was heartbreaking to let the trainers go. And, at that time, there was no government support like there is for coronavirus now.

“Through all the different crises, I have learned that you have to always look at things in a positive way,” she said. “Fear and worry will drag your energy down and stop you going forward. Of course, you have to always be prepared for the worst, but I always tell myself that—even if I end up losing everything—as long as I am healthy then I can always start over again.

“And that is why I sleep well at night.”

A member of the chamber for 31 years, Chang says she has learned to be honest and transparent with herself and staff, that it is wise to have some money squirreled away for the proverbial rainy day, and that there is always a positive to be found even in the most negative of situations.

“I am very optimistic about the coronavirus pandemic,” she said. “We have already seen many positive outcomes, such as collective efforts in science and the acceleration of the digital transformation of the workforce and in our personal lives.

“Business will bounce back for sure, with more innovative ideas and collaborations. This pandemic has made the world even smaller and interconnected, so I can’t wait to see the innovative new lifestyles we are going to experience.”

I always tell myself . . . as long as I am healthy then I can always start over again.

KINJI YASU (46 YEARS)
Given that natural disasters and the ups and downs of
business are utter inevitabilities in Japan, Kinji Yasu said kizuna—or the bonds that connect us—are critically im­portant. And at the age of 82, he has been through enough dark days that his words of advice should be heeded.

A Tokyo native, Yasu grew up in the city in the imme­diate post-war years. He witnessed the oil shocks of the 1970s before working for pulp and paper conglomerate Crown Zellerbach in San Francisco. He subsequently set up Intercontinental Resources with partners in San Francisco and Paris, but is today president and CEO.

A member of the chamber for 46 years, he has served on the board and has worked through testing times—but says the current coronavirus pandemic has produced obstacles that many in business had never anticipated.

“What makes this particularly worrying is that we have no effective solutions, no medicine to treat it,” he said. “The government has said that this problem is going to be with us for a long time and we are going to have to adapt the ways we live and work.”

Society had to change in the aftermath of the March 2011 tragedy of earthquake and tsunami, but the lessons of those dark days have been taken on board and safety provisions at nuclear plants, for example, are now far more stringent, he said.

“When things are difficult, it is important to work with your kizuna connections to stay in business. We commu­nicate with our partners, the users of our services, and the consumers of the products that we represent. When something like this happens, you have to go back to the basics,” he said.

“But I’m optimistic about the future,” he added. “We came back from the Lehman shock, the nuclear crisis and, a century ago, there was the Spanish flu. Each time we learn lessons and we will do the same this time.”

When things are difficult, it is important to work with your kizuna connections to stay in business.


NILS HORNMARK (34 YEARS)
“I liked the smell of Tokyo.” That’s how Nils Hornmark remem­bers feeling when he stepped off the plane at Haneda Interna­tional Airport in 1966.

Originally from Sweden, and now 79 years old, he came to Japan as a training engineer for the Swedish company ASEA, which is today ABB and develops robotic as well as digital technologies for infrastructure. He returned to Sweden but missed Japan, so in 1970 jumped at the opportunity to become scientific and technical attaché at the Embassy of Sweden in Tokyo.

He set up Hornmark KK in 1986 to assist foreign companies entering Japan or developing their local operations and has been a member of the ACCJ for 34 years.

“The first crisis I experienced was in 1973, the oil crisis, when Japan was without oil and had to bow very deeply to Saudi Arabia,” he said. “But the worst crisis for me was the 2011 earthquake, tsunami, and nuclear accident.”

The event left some lasting impressions on Hornmark.

“Life is important, and more important than money and stuff,” he said. “Take care of your health. Try to be active and learn new things. And don’t have too much glassware at home.”

His consulting business was hit hard by the disasters, but he and his Japanese wife, Noriko, got by on their savings until things picked up again. And while he is optimistic that Japan will similarly recover from the pandemic, he says there will be new challenges.

“The coronavirus will cause drastic changes in the way we work, which will be a problem for old guys like me,” he said. “I do not like to work without having direct personal contact with foreign clients and Japanese end-customers. Foreign travel will be a big problem for some time.”

Life is important, and more important than money and stuff . . . Take care of your health. Try to be active and learn new things.

MIDORI KANEKO (32 YEARS)
Director of public relations for Amazon Japan and chair of the board at Temple University Japan, Midori Kaneko has been a member of the chamber since 1987.

“I joined the ACCJ because of its legacy, credibility, size, and influence—and my career and personal growth have actually come from my involvement with the ACCJ,” she said. “The ACCJ has always focused on what mattered for the two countries and is one of the most well-recognized industry organizations in Japan. I can say that I am one of the dedicated advocates of the ACCJ.”

For all the good times, however, there have also been times when business has been strained.

“There are tremendous lessons to be learned from each crisis that we live through, but the aftereffects of the Lehman shock on the housing loan industry in the United States is something that I still reflect on today,” she said.

Corporate affairs officer with Citibank Japan at the time, Kaneko said she was “emotionally destroyed” to see American families forced to leave their new homes when the housing loan market collapsed.

“One of the professional lessons I learned was that any cor­­porate leader that can have an impact on society is public,” she said. “He or she must have such high integrity and do the right thing for their customers, communities, and the industry while caring for their loved-ones. At a time of crisis, leadership matters so much.”

The March 2011 disasters similarly cast a pall when she was communications director for GE Healthcare APAC. Keeping employees informed about the measures that the company was taking for customers, employees, and communities was critical to the organization eventually emerging safely.

And now companies are dealing with the impact of the coronavirus.

“Business will bounce back eventually, but how long that takes and how different the ‘new normal’ will be depends on how Japan and the world adapt,” she said.

The aftereffects of the Lehman shock on the housing loan industry in the United States is something that I still reflect on today.


TOM WHITSON (36 YEARS)

When he arrived in 1984, Tom Whitson immediately joined the ACCJ, the board of trustees of the American School in Japan, the America–Japan Society, and Tokyo American Club.

Originally from Illinois, where he studied Japanese and accounting at the University of Illinois at Urbana–Champaign, Whitson moved to Japan to be a partner with KPMG. An interesting job in an equally fascinating country meant he knew he would be in Japan for many years.

Inevitably, however, there have been events that have made business here a challenge.

The bursting of the economic bubble in 1990 was the first predicament that needed to be navigated, said Whitson, who has served as treasurer of the ACCJ on three occasions and was president in 2009–2010 before retiring from KPMG
in 2012.

Five years later, “The Kobe earthquake showed an incom­petent government response, but wonderful individual efforts in responding to the needs of the people affected,” he said. As ACCJ treasurer, Whitson visited charities that the chamber was supporting in the region. That assistance was repeated in the aftermath of the 2011 Tohoku disaster.

The key ways to getting a business through the tough times are “to control costs and look for opportunities,” Whitson said, advising companies to evaluate the lessons they have learned, increase capabilities for working remotely, and reconsider activities that have become less important to the organization.

And that applies to the coronavirus pandemic.

“I think businesses will ‘bounce forward’ and evolve in interesting ways,” he said. “It will take 18 months to two years, but working styles will change and the measures of evaluating what companies should be doing will be different.”

Increase capabilities for working remotely, and reconsider activities that have become less important to the organization.

KUMI SATO (33 YEARS)
For the president and CEO of Cosmo Public Relations
Corp., handling a crisis that threatens the very foundations of a com­pany is all about leadership and making sure that lines of communication between all the stakeholders are open and used frequently.

Kumi Sato has been in her role with Cosmo since 1986 and has been a member of the chamber for 33 years. While the Tohoku tragedy of March 2011 was an extremely test­ing time, she said it also demonstrated the importance of leading from the front.

“I was chair of the chamber at the time, and we knew straight away that we had to demonstrate that US busi­nesses were staying in Japan even as others were leaving,” she said. “We wanted to show we were all in this together.”

Today’s challenge, the global coronavirus pandemic, is a very different one, she said, and probably the most difficult situation that business here has faced in decades.

“Globally, companies are going to be seriously affected, but I believe that most will bounce back. So, the most important thing is to recognize the physical and mental toll that this is having on our employees,” she said. “Many of them are working from home, so they are isolated. And some are struggling with emotional issues as a result of this situation. Before, they came into the office and communicated and bounced ideas off each other. Now they can’t do that.”

Sato has made a point of speaking via computer, phone, or face-to-face with each of her staff when they have worked from home. The process has also been helpful to her as their boss, she added.

The most important thing is to recognize the physical and mental toll that this is having on our employees.


KIRAN SETHI (28 YEARS)

In January 1995, Kiran Sethi was 26 years old and living in Japan. He had completed his undergraduate studies at the University of Notre Dame and had come home to Kobe—
where he was born and raised—after finishing an MBA in Pittsburgh. Things were looking good: His fledgling international trading business, Jupiter International Corp., was getting off the ground and his first child was on the way.

Then disaster struck. The magnitude 6.9 Great Hanshin Earthquake hit Kobe and damaged Jupiter’s headquarters, making it impossible to move merchandise through a city whose infrastructure had been destroyed.

“It was a horrendous experience,” Sethi recalls. “But we were lucky because everyone we worked with was very understanding and supportive. We had $10 million of clothing inventory, and our biggest clients at the time—Fast Retailing, Aoyama, and Xebio—bought it from us sight unseen. That sort of support is the reason we survived. It taught me how much relationships really matter.”

He cultivated those relationships—with Jupiter’s banks, customers, overseas vendors, and logistic partners—throughout the disaster and its fallout. “The key,” he explained, “is to show your appreciation when you next can. At that point, it was the only way we could add value to our service. And it paid off. We still value those relationships today.”

The coronavirus is a disaster of a different scale, but it has had little impact on Jupiter’s business, given the strong demand for consumer products. While issues with supply chains have been inevitable, Sethi’s long-standing relationships have helped the company overcome even those problems.

“We are sharing information, we are communicating with our partners, and a lot of work has been put in by the employees,” he said. “I know and appreciate the sacrifices they have put in. And I’m very grateful to them.”

The key . . . is to show your appreciation when you next can.

THOMAS R. SHOCKLEY 
(20 YEARS)

Events of the afternoon of March 11, 2011, left Thomas Shockley’s business teetering on the brink. But he turned it around within a matter of months through some tough decisions. Now, nine years after a natural disaster that rocked the nation, he is applying the lessons he learned then to keep DocuMonde Inc up and running in the face of another crisis.

“We were rock-and-rolling during the earthquake. Our offices were on the first floor, and we were in a parking lot across the street within a few minutes,” he said. “Fast forward a few weeks, we had to move. We were in a brownout sector of the city and all power was off between 2:00 p.m. and 4:00 p.m., so we were an IT company without power to run our in-house racks of servers.”

With many other companies similarly looking for new office space, securing a new base of operations was challenging—and only achieved after the staff physically completed the move to a location two kilometers away.

A second problem was that DocuMonde’s clients here were not visiting their facilities outside Japan after the quake, so revenue nearly collapsed. The solution, Shockley said, was to outsource as much of his operations as possible and pare down the staff—although every effort was made to help them pursue their careers elsewhere.

“The outsourcing of everything helped us get through 2011 with a whole lot less cost,” he said. “We became a great lean-niche business.”

Unfortunately, the coronavirus has become the latest test of the company’s mettle. And one effective tactic, Shockley said, has been to visit partners to request reductions or deferments of payments, while at the same time applying for and receiving a few government grants.

Today, the company has used the lean time in its business to revamp its website and boost its online presence.

“Be flexible,” he says. “Past lessons are just one part of the equation that will get you to the other side.”

Be flexible . . . past lessons are just one part of the equation that will get you to the other side.


LAURENCE W. BATES (25 YEARS) 

When a company is faced with an unanticipated threat or a
business owner is confronted with a crisis, the reaction should be the same, believes Laurence Bates. In both cases, he said, survival may very well depend on their ability to be flexible.

A member of the ACCJ for a quarter century, Bates is director, managing executive officer, general counsel, chief risk officer, and chief compliance officer for Panasonic Corporation. In the 36 years since he first arrived in Japan, he has ridden out a number of the most dire situations to impact businesses here.

“It would be hard to pick one crisis that was worse than all the others because each is completely different and, in my experience, we can learn valuable lessons from every one of them,” he said.

The Lehman shock, for example, put financial institutions at huge risk, said Bates, who was with GE Capital at the time. Similarly, in the aftermath of the March 2011 Tohoku disasters, Japanese partners and the public appreciated the fact that US companies demonstrated their commitment to this market by staying put.

“But today, the coronavirus is of another dimension altogether,” he said. “This crisis is truly global and is having an even more serious economic impact. And we still do not know how it is going to end.

“It is testing all of us, and we need to figure out how to be flexible and learn new business models,” he said, pointing out that Panasonic has accelerated its adoption of artificial intelligence.

“I think that is probably the lesson that we can learn from this particular situation: the need to be flexible,” he said. “After each of these situations, the world looks a little bit different and what we have learned can be applied to better manage the next risk.”

Like others, however, he is confident that the stresses imposed by the pandemic will be overcome.

“I am an optimist because, in my view, you have to be, both in business and life generally,” he said. “That being said, I do feel we are in for a period of real change as we figure out how to transition to a new style of working—whether that be working from home, new technologies, or moving projects to a remote environment,” he said. “It will take time to work through all the problems that we face, and we will not know the full economic impact until this thing has played out.”

We need to figure out how to be flexible and learn new business models.

 

 

Julian Ryall is Japan correspondent for The Daily Telegraph.