Comment by IOT_Apprentice | Hacker News Reader

Comment by IOT_Apprentice | Hacker News Reader

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I worked for Toshiba America. The story is the CEO at the time told his underlings "I cannot report such earnings to our shareholders". His executives then went ahead and cooked the books.

Beyond that, Toshiba was a company in crisis. They announced all sorts of forward looking partnerships via press releases and had powerpoints about them, but allocated ZERO budget to implement them.

They ordered their existing units (seemingly hundreds of business units) to stay the course on obsolete and non-competitive products that were not generating revenue any longer.

Their cloud and "chip to cloud" plans were Potemkin villages, devoid of tech or investment.

Their PC division was non-competitive with flash storage, even though Toshiba's disk division INVENTED flash storage (and that was unpopular in that division--it went to market with much opposition, driven by ONE guy).

Toshiba basically played fortress Japan, where they made handshake deals with other moribund Keiretsu would just cross sell to each other.

They were being out innovated on all fronts, and were paralyzed to make the big changes, as the culture was one of never rocking the boat, and hanging on till retirement. The dream was to retire and perhaps be asked to consult back to the company.

The same thing was going on with the other firms there, like Sony et al. Disruption, the cloud, open source and innovation just destroyed a firm with an amazing historical legacy.

This is a really intriguing artefact of specific cultures. Clearly, there are benefits to 'Failure is Not Tolerated' cultures, it is interesting how people can pull rabbits out of hats when they have to.

That said, if they are up against a real wall, they will be pulling the rabbits out their rears (ie fraud) and it will be a problem.

But then you get a secondary effect: a kind of 'coverup cancer' which spreads through the social system, nobody willing to let it surface.

The European CEO of Japanese Olympus has a pretty intriguing story about this. Uncanny stuff about the depth of the fraud, like being in an episode of Twilight Zone.

The corruption is way, way more than just a few leaders - it's entire networks of systems and leaders, everyone covering for one another.

I suspect there are vast systematic hidden problems in Japan.

Germany has a little bit of this.

For some cultures, it's hard to understand the actual value of 'Chapter 11'. It's really an amazing bit of commercial policy that bankruptcy protection.

Someone needs to write a book on all the various ways we hide problems. The US Fed takes on Trillions of toxic assets. The Canadian economy prints money to new migrants buying homes as a form of 'spending the future now' in a giant Ponzi scheme. China makes up numbers willy nilly. Japanese hide it inside private networks. Etc..

The Carlos Ghosn case highlights some of the points you raise about the arbitrariness and closed-box nature of Japanese nativism.

I have worked for a Japanese client (big firm, I will not name them). I think it is a miracle that Japanese innovate at all. Their hierarchies are extra rigid, and promotions are more or less dependent on seniority. It was difficult to find any tech manager who was not around 60 years old. Peer-to-peer email from our firm to Japanese engineers was strictly forbidden. Except for the money involved, it was like a humorous game of Chinese whispers - a perfectly legitimate technical point raised will come back as completely illogical gibberish because it was been distorted by layers of management in between.

Engineers at my (Indian) firm in 2001 were saying that Sony's days are numbered, and Samsung will eat their lunch. I refused to believe it since South Korea had just gone through a major crisis. 20 years later, it is patently clear that they were understating the trend.

The often deserving worship of Japanese culture that many indulge in, leads to vast blind spots about Japan's cultural disadvantages.

Innovation happens at the individual level, and to that end, the Japanese are incredibly innovative. The person must then fight the hierarchies which farms the innovations from individuals who are undercompensated for their miraculous work. Same with the incredible craftsmen and artists. But if the hierarchy is bad, everyone loses.

The engineer would often then defect and seek a meritocracy where they are valued by their work and not seniority.

A quick lookup for the Flash inventor backs this. Fujio Masuoka is now CTO of a company in Singapore.

Shuji Nakamura, the inventory of the blue LED is the other primary example. He is now professor of Materials at the University of California, Santa Barbara, with 208 US patents and a Nobel prize. He was in the news a lot, and stirred up much needed debate in Japan regarding who owns the work of an employee.

But one counter example is Nintendo. Shigeru Miyamoto is the genius behind Super Mario, and him and his small team are responsible for so much of their hierarchy's success. Nintendo stands tall to this day.

Sony is a mixed bag, but their gaming division is still winning.

Korea is actually known to be incredibly similar to Japan, and according to one theory the only reason why Korea outpaced Japan is because the Japanese were too busy addicted to Pachinko. That may sound absurd, but not if you've seen how ubiquitous Pachinko is, and it's pure gambling with all the dangers of addiction and lives in shambles. Ironically, 80% of the parlors are owned by Japanese Koreans.

>Korea outpaced Japan is because the Japanese were too busy addicted to Pachinko.

Hello from Japan. When people from the Westernized world talk about Japan, I find it interesting to hear what everyone has to say. Some are true, some are ridiculous, some are "facts" people echo on forums. This in not true. This is ridiculous.

Do you think everyone is so addicted that we do nothing else? Do you understand that the addicted to pachinko is a small percentage and these people would be addicted to something else and be un-productive anyway?

Its not a matter of "people". Korean companies have outpaced Japanese companies, because Korean company are more global. And nice for them. But Pachinko has absolutely nothing to do with that.

Pachinko sound like Russian word "pochinka", which means "the process of repairing something".

I know a lot of very innovative and entrepreneurial Japanese people, both within and outside of big companies. Outside of big companies, Japan's risk-averse system makes it very difficult for them to pursue ambitious tech projects. They have to fight much harder to get financing and also to work with suppliers that are more used to dealing with corporate partners. So the ones that insist on starting a business often go into lower risk but still rewarding sectors.

Within companies, it really depends. As you point out, Nintendo is a good example of a company that is actually averse to not taking risks, and doesn't get humbled by failure. They insist on reinventing themselves and trying crazy things even when they'd probably do just fine sticking to something easy and proven. Their senior leadership drives that. They're far from the only company like that in Japan, but one of the few in tech.

Japan's big slow companies are good at the kind of innovation that takes decades of slow, continuous refinement and constant long-term funding rather than sudden pivots and breakthroughs. Metallurgy and materials science, chemistry, and precision engineering are fields where those big heirarchies have done well for themselves.

Except sudden pivots and breakthroughs are what made Sony and Toyota and Nintendo and what still drive them. Mario, the Walkman, the Corolla. More recently, the Switch, PlayStation, and Prius. All breakthroughs with exciting beginnings resulting in massively popular and lucrative products.

Nintendo trusts the innovators who insist on innovation. I would love to believe this is the winning formula, and maybe many Japanese companies do, but the problem with that is when the innovators are wrong. How often does a researcher invent exactly what the market needs? So in between hits, the hierarchies must figure ways to feed themselves. And some self destruct through corruption (Toshiba) and internal conflict (Nissan). Some get bailed out (Sharp, JAL). Sony's gaming division has been bailing out their other businesses.

In the case of Xperia, the innovation and product is there, but Sony miserably failed at marketing and being competitive in the US core market. Sony marketing is legendary in Japan, but they have never successfully translated that magic to the US. In Japan, the Xperia is killing it.

https://onlineshop.smt.docomo.ne.jp/ranking/index.html?color...

Some of the stuff you list are not that sudden. Switch for example is exactly a product of long time refinement. Nintendo has been trying to make a tv-portable hybrid since the snes years.

> "Shigeru Miyamoto is the genius behind Super Mario, and him and his small team are responsible for so much of their hierarchy's success. Nintendo stands tall to this day."

Not really a counterexample. If you have one hypertalented person that rises to the top of the otherwise moribund system, sure they can work miracles ... until they retire. Moreover, their blind spots become the company's blind spots; e.g. missing out on network features like cloud saves that Nintendo is criticized for. It's not a generally applicable model.

>>80% of the parlors are owned by Japanese Koreans

Especially those with longstanding connections to the North.

As I understand it, the "promotion through seniority" thing isn't always a huge issue.

It's basically a way to create less risk and stress for employees. As long as they put in the work (and yeah, they're ALL expected to work) they get job security and get promoted in a predictable way.

If they show that they're actually good at their jobs, they don't get more (or less!) promotions, they just get to work on the more interesting projects and are given more free reign.

Of course, I expect this would only be true in the companies that are not sinking. And it's not like the USA doesn't have its share of former tech giants getting torn apart by more competent competitors (anyone remember Yahoo? HP? Is IBM on the upswing or downswing right now?).

Isn't this a problem with policies rather than cultural? If it was cultural then there wouldn't be such inventions in the first place and legendary bike and car companies.

What I feel is this is because policy created which reduces competition and increases monopoly. It is hard to find companies now which can be started with like Soichiro Honda or like Akio Morita and Masaru Ibuka now. This trend is going on everywhere.

It makes sense as a cultural problem from the perspective that workplace culture is an aspect of culture overall. Policies don't spawn in a vacuum separate from culture, but reflect the values of those that create them.

Japanese companies also avoid firing people as much as possible. Typically, when they want you to leave, they will demote you or move you to a generally unpleasant position.

I can't find the source where I heard this, but it was an interview with several "average" Japanese people concerning Japanese work culture.

Yes 'window dressing' [1]

[1] https://www.nytimes.com/2013/08/17/business/global/layoffs-i...

In South Korea they will place your table in front of the bathroom and wait for you to quit. They are making it illegal now.

Fine, if it doesn't stink.

I recommend reading Olympus CEO Michael Woodford's book ”Exposure". Here's my brief summary:

Woodford works his way up through the company ranks. He's hear of Olympus Europe when he gets made CEO of the whole company. He goes over to Japan.

Soon after becoming CEO an investigative journalist for a small magazine, Facta, discovers some strange acquisitions Olympus made. Woodford questions the board. They tell him not to worry.

Woodford starts digging and covering his back. He gets fired. The Japanese board state "cultural differences" and no journalist questions this.

News of the fraud finally starts to break. 1.5 billion USD of losses were hidden over fraud which took place over decades. A few key board members get suspended sentences. Some members of the board remain on the board even after the dust settles.

His book goes into more detail about how companies, banks and journalists are all complicit in a system that allows fraud to go unchecked. Even after the details were published they were still selling this one under the rug.

(A bit of a tangent but it's hard not to sympathise with Kelly and Ghosn of Nissan. The key players at Olympus never saw the inside of a jail cell but Ghosn got half a year of solitary before any conviction.)

I feel like most places have vast systemic problems. It's just that they are problems unique to each place, at least, in their own way.

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