SHUZO SUMI, PRESIDENT of Japan’s largest insurer, Tokio Marine Holdings, is pondering what lessons can be learnt from past mistakes. His firm has made its share of unsuccessful bids to expand beyond Japan.
"We failed a few times in the past when we made challenges in the US and Europe," he says. "It was wrong from the beginning to enter into these extremely competitive markets with the same mindset as in Japan. In those markets, the Japanese management style hardly works even if you appoint a Japanese executive. That approach may work in the case of manufacturers that provide internationally competitive products. Insurance products, however, are closely linked to each host country’s regulatory regime, cultural climate and national characteristics. Therefore, people who are well versed in the circumstances unique to each market should assume the top posts of such subsidiaries."
It sounds like common sense, but Sumi’s position reflects a shift in the thinking of Japanese executives, who have often sent out subordinates from head office to run overseas acquisitions only to find that those who have little experience of local conditions in those markets struggle to make headway.
If this change in the tide of Japanese executive thought is genuine, it comes at an opportune time because the country’s companies are in a position to act.