The Delphi Roar: March 2, 2025
Dear Members and Advisers,
I was delighted to see many of you the monthly Cocktail on Tuesday evening at the Andaz; the M&A discussion on Feb 28th - and we still have the the book Salon on March 10 at Richie Johns’ Vega office with Bob Whiting and Ron Drabkin about how outsiders have succeeded in Japan (or sometimes failed miserably).
Many thanks to Stephen Perrey, Delphi member and President of Cytiva Japan for his deep-dive into the murky waters of post-merger integration - for me, this kind of candid, CEO-level, specific is what Delphi is all about: a truly unique forum for the exchange of “lived” experience and authentic experience in a face-to-face meeting, guarded by our community ethos of mutual support.
Our Offsite/Retreat which still exists as an IDEA, even if take-up has been slow. On the positive side, plenty of country managers have contacted me to express interest, but for some reason that particular weekend seems difficult for many.
My relationship with Chat GPT continues to blossom. I spent 90 minutes discussing an effective morning routine, and we both agreed that insulating yourself from email, Whatsapp and other “reactive” triggers is essential. You need to start the date doing what is important for YOU, not reacting to others. Chat GPT also recommended that as a small business owner I stop thinking of organizing work through the traditional “task list” and more as “decision-making”, and to think carefully every day what decisions can really push Delphi forward.
Last Friday, I flew to Kagoshima to meet an old university friend, one of the best linguists I have met, who wanders ruthlessly (divorced) from one country to another to avoid paying tax. Since Covid ended, he has lived in Borneo, Vietnam, Pakistan, Mauritius, Kagoshima, and some godforsaken town in rural Korea.
I find it quite sad how so many people allow their lives, and the human instinct for a home, to be overruled by tax considerations. Bankers are especially prone to this, heading off to lonely enclaves in Monaco or Switzerland. Although to be fair, they are so happy to be saving so much money on tax that they always have a big smile on their faces when discussing their living arrangements!
In that context, I was very happy to meet one of my old friends, one of the owners of Zoff (Eyewear), for a lavish Yakiniku dinner in a corner of Roppongi I had never visited before. His company has just listed on the Tokyo Stock Exchange and as he said proudly, he is now “fxxxxing rich!” but he decided to pay his huge tax bill to the Japanese government, instead of decamping to Singapore - as so many rich Japanese do. I felt quite proud of him, and his values!
Btw, he took me to a very strange restaurant called “queue” - where there are only private rooms. He told me that after the Fuji TV revelations everyone is scared of publicity around the common (as far as I can understand) practice of wealthy men meeting beautiful young women through their talent/modeling agencies. So privacy is now the rage. Queue has no common areas at all - everybody is curtained off. It’s rather dull, actually, unless you are seated opposite a stunning member of the opposite sex, I guess!
Speaking of rich Japanese, I also visited the second-hand Rolls Royce showroom adjacent to the Hotel New Otani. One of the huge cars had one 50km (that is not a typo) on the clock! You could also get a beautiful sporty Wraith for 23M yen with 25,000km on the clock. Many of the cars have ridiculously low mileage. The staff could not speak English, and Spectre was misspelled as Specrtre” - the shame of it!
Seen in the Network
Heard in the Network
“Your Japan strategy could involve using Japan as a base to access Japanese supply chains outside Japan, eg in SE Asia”
“Japan does not do things via legislation, it does things via Vision Documents. Foreign companies need to realise that, and get involved. They need to position themselves as tools or resources for ambitious domestic players, and keep a close eye on local developments”
“In Japan, your success is entirely in proportion to the effort you put in”
“There is still fanatical opposition to raising prices. My Japanese clients come to me and insist on the same quality at lower prices. They refuse the usual business lucky”
“You have to treat Japan in the same way as you would a new segment in your home market - you need to tailor it very closely to the requirements of the consumer”
“If you come to Japan as a self-proclaimed disruptor and trouble-maker, driven by an ego and boundless ambition, you will fail…”
“People are struggling with inflation…the famous willingness of Japanese consumers to “pay for quality”, even at a big premium, is changing, and price is becoming the main determinant”
“You may have the best product on the planet, but if you are not trusted and liked in Japan, you will not make a sale”
“Align yourself with the winds of change. Don’t think you can change the market yourself”
“Nobody uses the word “Sustainability” any more, it’s now realized it’s so vague as to be useless”
“Companies now need a Human Capital strategy, to demonstrate value to the employee”
“Innovation in Japan is product based, not business-model based. The consumer is also quite experimental. But Japanese businesses are run very conservatively”
“Trading houses are now importing ingredients rather than finished products, to help private labels being pushed in local supermarkets”
“Don’t rely on getting lucky in Japan. It’s not that kind of easy market”
“As a foreigner, you can find a role by amplifying the differentiators Japanese companies are using as a competitive edge”
“Japan is a very good long-term bet, but that does imply a lot of patience”
“In some areas, Japan has a deficit, such as software. But in some if not MOST areas, it has a massive surplus. So you need to consider what you are really “bringing to the party”
“The best CEOs, whether in Japan or elsewhere, are self-aware, especially in the sense of knowing what they lack”
“Doing Sales is the Achilles Heel of doing business in Japan. As an American, I find the market in Japan somewhat familiar - the big exception is the struggle to get topline growth”
“The EU has now issued laws that companies need to issue repair manuals. I am not sure this is silly or constructive”
“In Japan, our merger was truly a merger of equals, which is not unusual in Japan, but rare outside Japan. This presents Japan-specific problems, though, compared to the more traditional M&A, where you just fire lots of people. That’s not possible in Japan without a big fight”
“Last year, 50% of our hires were foreigners”
Reflections on Japanese Culture
Although living in Japan, it’s a slight struggle to stay interested in Japanese culture - similar to how Londoners rarely take advantage of the many cultural riches they are surrounded by.
Still, I was reading a recent anthology of modern Japanese literature, and came across a striking story by Tayama Katai, called “One Soldier”.
It’s an account of the decline and death of a single soldier during some un-named war in the desolate Manchurian countryside, but likely the Russo-Japan war, which Katai had covered as a journalist.
The lack of historical detail makes the story timeless - and it’s easy to imagine a Ukrainian or Russian soldier today going through the same “calvary”.
Katai does not comment openly about the merits of the war; he just describes a young soldier trying to rejoin his unit, despite being very sick with beri-beri. The soldier (also un-named) is not even in enemy territory, but he is nevertheless doomed: the Japanese army does not consider him important enough to get the rest and medical treatment he requires. He is merely expected to die for the Emperor without complaint.
Being a well-trained Japanese, he still manages to walk for 30 miles without abandoning his rifle and pack, before dying in agony in the corridor of a random guest house.
I was impressed by Katai’s critical stance in describing these scenes: after all, the Russo-Japanese war was a very easy war to support. Russia frequently behaves in an expansionist and brutal manner, and the thrashing given to the Russians by the Japanese was cheered across the Western world.
Still, in the longer run, this apparently impressive victory, by encouraging the arrogance of the army, led to the nuclear holocaust of 1945.
I was surprised to read that the Japanese suffered a staggering 60,000 dead soldiers and almost 200,000 wounded - considerably more than the Russians and amounting to almost a quarter of the army.
Doubtless some Delphi members will have visited General Nogi’s house, where he quite rightly killed himself (in my opinion) in atonement for the human wave assaults he had ordered on the Russian trenches around Port Arthur.
The poor man lost both his sons to enemy action, which is perhaps why his wife joined him on the tatami, dagger in hand, for the quick stab to the neck which is the woman’s version of seppuku.
Ironically, his death was represented in the media as the triumph of traditional establishment virtues - even though he intended it as a criticism.
