Time spent developing trust pays off with Japanese firms

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Nov. 2, 2004 – Partnerships have become more commonplace in today’s global economy. Companies concentrate resources on their core competencies and seek companies with complementary resources, products and technologies for acquisition, joint ventures, partnerships or outsourcing.

In establishing any relationship, due diligence must be applied in researching and selecting a partner. This becomes even more critical in international partnerships.

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Japanese companies, including Olympus, often establish branch offices in the U.S. in order to form partnerships with U.S. companies. In October 2001, Olympus Partnership Development Group (PDG) was formed as part of the MEMS Technology Division of Olympus Corp. in Tokyo.

Before creating PDG, we had to define what Olympus had to offer a potential partner in terms of our core technologies, values and resources. Then we evaluated what Olympus was seeking, what a potential partner might require, and how that partner’s requirements could be met through a partnership with Olympus. We used that information to set up a framework useful for brainstorming models that could be beneficial for both partners.

As with most Japanese companies, our focus is to develop long-term relationships and provide a commitment to customer satisfaction. A lot of time is spent in the relationship stage and in developing trust. This requires the partner company to have patience to fully understand how a partnership with Olympus, or similar Japanese company, could benefit them.

We put more effort into the “front-end” of the partnership instead of trying to rush into production. This means that much effort is spent to understand the goals of the partner company and to see how Olympus’ resources can be leveraged to achieve them.

Practical examples of this philosophy are that we spend a significant amount of time even before the design phase to understand the scope of the project, specifications and performance goal of the MEMS or MEMS-based system.

We then spend additional time to go through the iterative process between concept, design, simulation, analysis and final design. This ultimately is a much more efficient and less costly process for the partner company, and results in faster production cycle time and less risk in getting the product to market.

Japanese companies tend to be more conservative than their U.S. counterparts. They want to understand marketing as well as technology issues and think about the overall strategy.

While they are concerned about time to market, they also want to make sure a high quality product will get to market and that it will be successful.

A partner company may find the level of questioning sometimes feels intrusive or unnecessary, but this is part of the process of gaining a deeper understanding of the partner company’s challenges.

In addition, the reputation that a product will earn once it enters the marketplace is important, as are the plans for succeeding product generations. Japanese companies are more likely to strive to meet and even exceed a specification.

The level of quality that might be acceptable in the U.S. might not be good enough in Japan. Because of these high standards, the Japanese often understate how good a product actually is. Expectations can be different in that regard and understanding that takes good communication.

Most partnerships involve large Japanese corporations and smaller American companies. It takes time for the smaller partner to understand a big organization and to navigate through its resources. Olympus has extensive equipment resources and production, assembly and test facilities. We can also support the partner company through business resources such as investment, co-branding, joint marketing and/or sales. You can’t find it all out on one trip.

Although Japanese companies may sometimes publish organizational charts, and the employees have business cards with their titles on them, it’s often unclear what the important relationships and status are within the company.

U.S. companies are sometimes preoccupied with identifying who the “decision-maker” is. But generally there is not one decision-maker. Consensus decision-making is important to the Japanese.

It is more important to identify who the important “influencers” are and what their responsibilities and concerns might be. But once consensus is reached and a project receives a green light, resources can be quickly brought to help the partner company and accelerate its development.

Forming a successful partnership takes a tremendous amount of communication. Working each communication channel is vital. But even in this age of e-mail and Web conferencing, partners need to realize that face-to-face meetings are mandatory in order to increase understanding and build the relationship.

It is also critical to develop detailed documentation practices, understand timelines and objectives, establish realistic expectations on both sides and provide regular follow-up and accountability on action items. Mutual trust must be developed so that each partner can be relied on to do what they say they will do, and also to minimize the effects of any miscommunication.

Although the upfront investment in time and resources necessary to establish a partnership can be significant, the potential payoffs in terms of resources and long-term relationship can be huge. Japanese companies can help partner companies build successful enterprises.

The Olympus corporate logo says, “Your Vision, Our Future.” That saying captures the essence of our mission: to help make our partner companies’ dreams a reality. We see this as being a “win-win” situation.


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