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The Podium

Lessons I learned from Japan

Not too long ago, I sat in the cabin of a Boeing 787 Dreamliner on a Tokyo-to-Boston flight that would bring me home after several days spent visiting business leaders in Asia, including Japan. When Japan Airlines launched the nonstop Narita-to-Logan flights last April, I saw it as a positive sign. During the 1980s and early 1990s, Japan was an object of fascination for people around the world — the source of some of the world’s most important consumer products and most significant managerial innovations. Since then, global interest in Japan has waned as the country’s economy has stagnated. To my mind, the new nonstop flights were a metaphor for a world that needed to reengage with the world’s third largest economy — a development that I believe would be beneficial for everyone.

A few days after I landed in Boston, governments around the world grounded the new Dreamliner. While this may make traveling to Japan less convenient, we shouldn’t let it deter us. And after talking with the executives, entrepreneurs, and leaders working to revive Japan’s economy, I am certain that anyone who believes the West no longer has anything to learn from Japan is making a mistake.

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At age 51, I am old enough to remember when Japan was considered a vital source of management ideas. In the late 1980s, when I began teaching at Harvard Business School, our faculty had already begun teaching landmark cases on Toyota, Sony, Matsushita, and other Japanese companies. Our professors were making frequent trips to Japan, visiting factories and executive suites to try to understand cutting-edge ideas in manufacturing, quality control and innovation. Our interest in Japan was reciprocated, and we began to see an influx of Japanese students and managers in our MBA and executive education programs. Since then our institution’s relationship with Japanese has shifted. Today we have far fewer Japanese students studying on our campus. In this global century, our faculty are devoting more energy to studying companies and practices in China, India, South America, the Middle East, and other regions.

We’re hardly alone in this. In the United States and elsewhere, policymakers and media have shifted focus, too. Japan is often seen as insular and moribund — a place that’s been fighting the same set of vexing economic problems for so long with so little effectiveness that it resembles a sports team mired in a long winless streak. When you actually visit Japan, however, these views seem misguided. Tokyo is a vibrant city, with exquisite, innovative and user-friendly new high-rises adding to the beauty of the skyline. I met many dynamic business leaders and entrepreneurs — people whose optimism is palpable. In addition, knowledgeable observers are excited by signs that the new government, led by prime minister Shinzo Abe, seems determined to reengage with the world.

Policymakers around the globe would be wise to pay close attention. Consider how many countries are suffering the after-effects of too much leverage, a real estate bubble, fiscal imbalances, stalled growth, and political dynamics that make it difficult to create and implement solutions — all issues that Japan has been facing for years. If the West were more engaged with Japan, it would better understand the tactics and strategies that have failed to work in facing these challenges — and emerging efforts that are proving more fruitful.

Despite the perception that once-innovative firms like Sony have been lapped by foreign competitors, Japan continues to quietly produce companies that are poised to become world-beaters. My favorite example is Rakuten, founded in 1997 by Hiroshi Mikitani, a distinguished alumnus of our MBA program. Over the last 15 years Hiroshi has built Rakuten into one of Japan’s most successful businesses, with some 10,000 employees and a market capitalization of approximately $14 billion — a worthy global competitor to Amazon and eBay. I was also struck by how, despite its lack of economic growth, Japan still has qualities that citizens of other countries might envy. Economic inequality is strikingly low at a time when so many other nations have seen an alarming rise. Its society feels orderly and harmonious. Its recovery from the 2011 Tohoku earthquake is a reminder of this country’s long history of resilience in the face of wars and other disasters.

One of the most exciting aspects of life in a global century is the ease with which we can learn lessons from other countries. That’s true for our MBA students, many of whom spent their January semester studying abroad through a range of field experiences. That’s also true for their dean, who, Dreamliner or no Dreamliner, believes that the country that set the management agenda when I was coming out of graduate school so long ago still offers important lessons for us all.

Nitin Nohria is dean of Harvard Business School.
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