5 Lessons on business in Japan
Japan’s entertainment scene was shaken last month when Yoshimoto Kogyo Co. said it terminated its management contract with 49-year-old Hiroyuki Miyasako. Yoshimoto is Japan’s largest entertainment agency, with several 1000 talento (Japanese for entertainers) under contract, while Miyasako is one of Japan’s most popular comedians. The agency suspended him and 12 other comedians in July for attending a party hosted by a crime syndicate in 2014 without prior consultation with their agency. The scandal reveals deep lessons on how business is done in Japan.
What we can learn from the Yoshimoto Kogyo & Miyasako scandal about business in Japan
While this in itself was enough to make it onto the front
pages of the tabloids, the scandal soon widened as it became clear that much
more was behind the Miyasako and Co.’s misstep. Entertainers in Japan are
chronically underpaid, at the mercy of their agency, and often face harassment.
These lessons from the Japanese entertainment industry also apply to the wider
market in Japan.
1) The reason is not the real reason
When the scandal became public, the media and the agency focused
on the fact that the comedians had attended a party by an organized crime ring.
While it is clearly scandalous to do business and take money from mobsters, the
comedians were not aware of this at the time of the event, and
believably so. Moreover, the yakuza
affiliation was a welcome excuse for Yoshimoto Kogyo to portrait Miyasako and
his cohorts in bad light.
They were distracting from the fact that the main reason for
laying the comedy stars off: It was not hanging out with the wrong crowd but
the fact that they engaged in what is known as yamieigyo (literally dark, or side business) in Japan. The agency
was simply unnerved that the celebrity comedians went behind their back for
some cash in hand to bolster their meager salaries.
This is something you might encounter in Japan frequently: a “no”, a contract canceled or a business relationship ending might be explained to you, but usually with the most convenient reason that is least likely to rock the boat. While you can try to enquire with your counterpart for what the real reason is, it is unlikely that they would be so direct and tell you the truth if it would paint them in a bad light or embarrass you. The answer will probably be somewhere there between the lines, and it takes a Japanese person or someone who has been in Japan for a very long time to extract it for you.
2) Japanese companies offer security, not riches
Concentrating on the fact that the comedians performed for
mobsters conveniently distracted from the fact that performers, even celebrity
ones, get very low salaries while in Japan, talent agencies take the lion’s
share of money. 50% is common for e.g. models and other entertainers. And even up
to 80% of a gig’s pay gobbled up by the agency, not the performer, is not
unheard of. Unbeknownst to the public, many Japanese celebrities, ranging from girl
band members to comedians, live on salaries that mirror those of low or middle
rank office workers.
While this would certainly be considered outrageous in the
Western world, it is not talked about in Japan. Agencies here don’t promise
their talento to make them rich, but
connections and to keep them in the show biz. Connections and relationships are
paramount in business in Japan–entertainment or other–and corporations expect
their salaried workers to be eternally grateful for the security and opportunities
they offer them.
On the other hand, Gaishikei,
or foreign corporations, are known to offer better salary packages than
domestic companies and this can give you an edge over your local competition
when attracting talent.
3) In Japan, most industries are dominated by one player
Besides the fact that “things have always been this way”,
there is another reason why little protest has surfaced against such conditions.
Most industries in Japan are dominated by one big player, who can get away with
murder, as they control the market and set the agenda.
Miyasako likely has nowhere to go after Yoshimoto Kogyo
agency laid him off. The agency manages around 6,000 comedians, athletes, and
actors and has contracts with almost
every comedy and variety show on Japanese TV.
However, things are slowly changing. SMAP, Japan’s most
successful boy band sensations of all times, has left
Johnny’s & Associates entertainment, the Nippon factory of beau singing
troupes. And they are sure suffering the consequences now. Despite being
immensely popular superstars, especially with the females of the Dankai
Dankai generations, their old agency successfully, and illegally, blocked
them from landing jobs and contracts. The SMAP members recently came out
regarding the slights the suffered from their former agency and it caused a
mild outcry amoungst their fan base and in the yellow press of Japan for the
first time – a gentle sign that times might be changing?
Re-setting the agenda in an industry is a long and windy road, but in Japan, especially foreign corporations coming in as a wild card have a good chance at successfully changing the narrative of a whole industry – if they first gain a true understanding of the market in Japan.
4) Harassment is common
Not only SMAP were harassed by their former agent Johnny’s
Entertainment, but also Miyasako and his colleagues have come out regarding the
harassment they lived with for years at Yoshimoto. At a press conference the
comedians gave, the public learnt that the entertainers were gagged by their
former employer and not allowed to disclose any details on the scandal. In a
textbook blackmail case, their agency threatened that if one of them would
speak up, not only he would suffer the consequences of being fired, but all his
colleagues with him.
Harassment cases are common in Japan, and have also led to scandals
surrounding sumo wrestlers last year. For the average Joe or Jane,
harassment in Japan can take the form of anything between power harassment to
sexual harassment and even maternity harassment. Enforced overtime, known to
slave some workers to death, is closely intertwined with this. Yet, things are
stirring with the new
laws designed to limit overtime and karoushi
(death by overworking), and more importantly, less acceptance within the
younger generation of such conditions.
International corporations are known to offer a better deal
when it comes to HR management and Generation
Reiwa is seeking them out. Offering the right treatment and conditions can
ensure that you will attract the most desirable talent in Japan.
5) Teary apologies accepted
Yet, everything can seemingly be washed clean with tears in
Japan. The president of Yoshimoto gave a teary apology after the public tide
had turned against the agency and onto the comedians’ side. To show his
sincerity, he even announced that he is taking a pay cut for the next 12
Self-flagellation is common in Japan. Seemingly unforgivable
mistakes can be undone by bowing deeply, shaving your head, or
similar sacrifices if you are in the public spotlight.
Showing your remorse and accepting consequences is expected, should you do your Japanese business partners wrong somehow. A brief “my bad, mate” won’t do in Japan and well-selected local staff or an advising agency can help you find the right way of how to salvage your image and show integrity, as preserving harmony is crucial in Japan.
Doing business in Japan is different – but things are changing
The comedians surrounding Miyasako gave their own press
conference, which shifted public blame onto the agency, despite threats. SMAP
walked away and made their plight public. And the average Japanese worker is
also less and less willing to work overtime and face harassment and now demands
terms and conditions they see their Western counterparts enjoy, like paternal
leave without harassment.
Foreign companies have the power to re-set the agenda and
status quo and can offer real benefits that young Japanese demand as they are
in a better position on the job market than their parents were. However, an
in-depth understanding of Japanese consumers and workers forms the base of such
an endeavor, best undertaken with guidance from a local team of experts.