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What Japan and Germany have in common in terms of digital transformation

December 08, 2022 - 4 min read

My first trip to Japan since the outbreak of the pandemic was an eye-opener: Germany and Japan are not that far apart when it comes to digital transformation. Culture and tradition play decisive roles in organizational change in both countries. In fact, culture forms the basis for initiating change.

During my recent trip, I struck up conversation with an elderly fellow traveler on the train. He had worked for a Japanese company in Germany for a long time, and so we discussed the cultural differences and similarities between the two countries. At the time, my acquaintance worked in an internationally senior position, and his job was his life. Back then, once you had joined a company, you remained loyal to it throughout your working life. Employees didn’t change employers every few years as they do now; instead, staff climbed up the internal career ladder.

The same principle applied to work and production processes. These were continuously optimized over many years according to the motto, "improve what you have". There was no 'rip and replace', rather, systems and processes were developed and adapted step by step.

Today, a rapid cultural change is taking place in Japan, according to my traveling companion. The younger generation has a different view of life and the world of work and is willing to undergo fundamental change. For aspiring leaders, a different motto applies—the existing is replaced with the new in order to move forward.

For a long time, adaptation meant perfecting what exists

Adherence to and development of established procedures are the cornerstones of why technology, workflows, and procedures in Japan are so mature. For example, Japan has connectivity under control to an impressive degree. On the train I was sitting on, everything worked perfectly: the internet, the technology, the service, even the seat quality was on point. In this way, public transport in Japan offers more than just punctuality, it also serves as a technically mature workplace.

However, cautious approaches to optimization have left both Germany and Japan somewhat behind in terms of digital transformation. Germany, a production stronghold, relies on long cycles of production investment amortization and high caution when introducing innovation. Only what has proven to be viable in other regions is evaluated. This philosophy is typically applied to the introduction of cloud and holistic digitization, especially since the concept of Industry 4.0 was introduced.

Interestingly, Japanese company branches have tackled transformation issues on their own much faster than those back at HQ. This is because many HQ offices have built up complex IT infrastructures that have grown over many years. These huge legacy environments have prevented Japanese companies from taking the first steps of innovation, and “perfecting what exists“ has been too tightly guarded a concept - much like the highly complex production facilities that slow down digitization in Germany.

In addition to this point, most Japanese companies, particularly the large traditional ones, must adapt people management practices to bring about cultural change. For example, many companies find developing young leaders, and breaking the traditional seniority system, a challenge. Historically, Japan has excelled at product innovation. However, people, process and platform transformations are now all key success factors, and enablers for Japanese companies striving for a competitive advantage on the global scene.

Transformation is essential

This all being said, change can happen quickly, both in Japan and in Germany. Just three years ago, the cloud was an issue limited to applications on both sides of the globe. Then came the Coronavirus and, with it, hard lockdowns, which lasted much longer in Japan than in Germany. The pressure to turn the home office into a secure workplace has, as such, spurred the transition to modernized, secure cloud architectures. Traditional VPN access often failed to keep pace with the requirements for high-performance, seamless access for all employees.

Accordingly, the young generation of workers now demands more flexibility than ever. Home office or hybrid working, flatter hierarchies, more self-determination, and a good work-life balance are at the top of the list when choosing an employer. For them, work is part of life, but it has long since ceased to be the center of their lives. Today, mainly due to external pressure, companies have come to realize that adaptation is not a transformation, and that a lack of transformation can catapult companies to the sidelines.

We find, therefore, that the current situations in Japan and Germany are comparable: cloud transformation and the resulting digitization of production environments, including more flexible working methods, are in full swing. It was made inevitable by external factors including the pandemic and the changes that triggered. It would seem that old ties are now being quickly cut by companies in both countries.

You can read more about the international comparison with regard to zero trust transformation in the State of Zero Trust Transformation 2023.

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