Productivity—the Japanese Way

Economists are forever telling us that we need to increase productivity in order to improve our standard of living. Productivity is one of those concepts that are so loaded with meaning and implications that is very difficult to define, much less explain. Not surprisingly then, improving “it” is one of the most difficult tasks facing business. More to the point, the time for improvement is quickly running out. Industrial performance is being outstripped at a frightening pace by the Japanese. In fact, it has reached the point where their productivity performance is so superior that they can literally pick any product and any market and quickly come to dominate it.

The idea that Japanese are uniquely gifted in only a few related areas has been debunked by their proven successes in industries as diverse as automobiles and semi-conductors. As well, the facile suggestion that the Japanese are somehow culturally inclined to be productive doesn’t wash. Japanese managers have taken over factories in Europe and the US and greatly improved productivity records. Productivity has also been high in their North American plants.

If corporate managers believe that their workers can be as competitive as anyone else in the world, and technically, there’s no valid reason why they can’t be, then they must find better ways to help their employees realize their potential. In that sense, study of Japanese methods is a jumping-off point that can lead to adaptations that will produce unique ways of improving productivity.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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Personal Selling: Two Approaches

Personal Selling: Two Approaches

Many American companies do not put nearly enough effort into direct, personal communication. Japanese success in displacing the US as Saudi Arabia’s leading supplier is instructive. Japanese exporters and small teams to meet with Saudi importers: Japanese exporters; they go to Saudi workshops, travel to secondary towns, and meet with sub-agents. The Americans, on the other hand, invite all their Saudi agents together for a luncheon, do not have private meetings, do not get their hands dirty, and never travel to secondary towns—they tend to stick to the three market centers. Saudis complain that US effort is misdirected: American personnel devote infinitesimal detail to making advance arrangements for visiting executives, going so far as to specify rooms overlooking a certain view from the hotel.

Japanese firms supplement their direct, personal efforts with heavy local advertising. They use gifts generously in product introductions, and warrantees on Japanese consumer electronics range up to three years. To carry out this business, Japanese trading companies have large staffs of professional international marketers who have been cultivated since graduation from a Japanese international trading university, schooled in English and Arabic, and rotated worldwide as international trading specialists.

Compared to most other cultures, particularly non-Western. Americans are extraordinarily preoccupied with the tangible aspects of a product. They round up all their sales agents and give a product presentation instead of putting their energies into the more important component of international marketing—people. In American and only a few other countries it is normal to do business from a distance, between strangers, by mail or telephone.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Employee-Employer Contract

Employees and employers are engaged in a stakeholder relationship that includes numerous expectations by both parties. The employer, for example, has assumed various duties and obligations. Some of these responsibilities are economic or legal, others are social or ethical in nature.

The relationship is clearly more than simply paying a worker for the labor provided. Cultural values and traditions also play a role. In most Western countries, employers feel they have a duty to include workers on the board of directors to assist in forming company policy. For many years, Japanese employers have offered their workers lifelong employment, although this practice has become less widespread in recent years.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Deadlines

Our emphasis on speed and deadlines is often used against us in business dealings. In Far Eastern countries such as Japan, the Americans may be asked how long he or she plans to stay at the first meeting. Then negotiations are purposely not finalized until a few hours before the American’s departure, when the Japanese know they can wring extra concessions from the foreigner because of his or her haste to finish and return home on schedule.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Extending the Product Life Cycle

The concept of the product life cycle tells us that a sequence of actions is required to maintain a product’s sales and profits. The goal of the planning is to stretch out the life of the product, thus keeping it profitable longer. The following techniques are often effective in extending a product’s life cycle:

1. New or extended uses: The sales of rugged four-wheel drive sport utility vehicles, ranging from inexpensive jeeps to Range Rovers, increased dramatically once they became accepted as family automobiles.
2. b. Reduce price and build volume: Tylenol became a much more successful product after Johnson & Johnson reduced its price.
3. c. Increased frequency of Use: Trade associations that are connected to the poultry and fish industries have been successful in informing the public that their products are low in cholesterol and should be eaten frequently as part of a healthy diet.
4. d. Broaden the target market: As the ethical issue, American tobacco firms have successfully enlarged the market for American cigarettes by focusing on Japan. They have also been very successful in expanding the market for tobacco products in Europe and South America.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

 

Customer Retention

Most companies spend a majority of their time, energy, and resources chasing new business. While it is important to find new customers to replace lost business, grow the enterprise, and expand into new markets, this goal should be secondary in importance to the main objective – keep your customers and enhance customer relationships. Customers leave service organizations primarily due to service reasons, but it is important to realize that these issues are controllable from the firm’s perspective.

Emphasize employee retention and customer retention in business. Service companies must retain the best personnel to win and keep good customers (realize that the average company loses about half of its employees in 4 years). It’s impossible to build a loyal bank of customers without a loyal employee base. Note that:

• On average US corporations lose half of their customers in 5 years.
• A typical company has a customer defection rate of 10 to 30 percent per year.
• Raising the customer retention rate by 5 percent can increase the value of an average customer (lifetime profits) by 25 to 100 percent.
• Lexus has repurchase rates more than 20 percent higher than Infiniti. While Lexus only accounts for 3 percent of Toyota’s sales, it contributes 30 percent toward their profits.

Invest at least 75 percent of your marketing budget on customer retention and relationship marketing activities. Research by American Management Association has demonstrated that it costs five times more to get a new customer than keep an existing one. The key to customer retention is customer satisfaction. Satisfied customers stay loyal longer, talk favorably about the organization, pay less attention to the competition, are less price sensitive, offer service ideas to the organization, and cost less to serve than new customers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Understanding Culture

Culture is a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior. All members of a culture have similar assumptions about how people should think, behave, and communicate, and they all tend to act on those assumptions in much the same way.

You belong to several cultures. The most obvious is the culture you share with all the people who live in your own country. You also belong to other cultural groups, including an ethnic group, a religious group, and perhaps a profession that has its own special language and customs.

Distinct groups that exist within a major culture are referred to as subcultures. Groups that might be considered subcultures in the US are Mexican Americans, Mormons, wrestling fans, Chinese Americans, and Harvard graduates.

By bridging cultural differences, you can successfully achieve intercultural communication, the process of sending and receiving messages between people of different cultures. When communicating with a person from another culture, you will be most effective if you can identify the differences between your cultures and accommodate those differences without expecting either the other party or yourself to give up your identity.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.