“So in an environment that demands efficiency, a Japanese team will excel. If it's clear what needs to be done and who should do what, you'll be amazed what people can do. But obviously the world is anything but predictable; it demands speed, sometimes even at the expense of quality.”

Intro:
Welcome to the Agile Digital Transformation podcast, where we explore different aspects of digital transformation and digital experience with your host, Tim Butara, content and community manager at Agiledrop. 

Tim Butara: Hello everyone. Thank you for tuning in. Our guest today is Younes Hairej, founder and CEO of Aokumo; they're a technology company based in Tokyo, Japan, which is focused on helping organizations drive innovation and transformation through modern technologies and modern approaches. 

In today's episode, we'll be discussing the role of culture for effective digital transformation and we’ll be drawing from Younes’s unique experience of leading IT teams for different Japanese companies. Welcome Younes. It's great having you here. Anything you'd like to add to the intro or should we just proceed with our questions? 

Younes Hairej: Thanks, Tim, for having me here. I think we can just dive into it. 

Tim Butara: Okay. So maybe let's start with something basic. Maybe, can you tell me, why would you say the role of culture is so important for effective transformation? And has this always been the case or has it maybe become more pronounced, more prominent during the COVID crisis? 

Younes Hairej: Okay, first, it's a great question. So just to put some context, I've been in Japan for about 20 plus years. So I'll share from my experience, observations, failures and lessons learned. So experiences such as being the only foreigner in the train program at Sony, for example, like then it was Sony Ericsson, after graduation trains being part of culturally diverse teams and, and experienced leading teams Japanese and, you know, mixed, culturally diverse. 

So, in the context of digital transformation, there is a lot of emphasis on the first part, digital, which is absolutely important. So to be digital, organizations need to put technology at the core. But only when you have the right environment. So, culture is really key to the second part of the digital transformation, which is transformation. 

So, transformation, as you may know, means change and sometimes dramatic change, so done by people and it impacts people. In fact, it's interesting ‘cause, I gave a 15 minute talk at the Future of HR conference last month, titled Cultural transformation through social technologies and design thinking. And it was all about building the right environment for people to succeed. And I, and I started by talking about agile manifesto, and how a group of brilliant engineers, architects and software software developers got together to find an alternative to the existing software delivery processes that were complicated, slow, and unresponsive. 

This manifesto had laid the foundation for DevOps and all its flavors, like, GitOps, DataOps, MLOps, et cetera. And it has 12 principles and the first principle is individuals and interactions over processes and tools. And here just, you know, shows the importance of really people and interactions over technology. And I also supported a study by McKinsey and PwC. I think the PwC study found 75% of change initiatives will fail all due to lack of digital culture. 

So, when we talk about organizational culture, we obviously– we talk about the collective behavior by people within the organization. But the interesting thing is, but for organizations to understand and acknowledge that culture is, is vital to, you know, their strategy and achieving their goals. Really organizations need to put people at the center. And then when you recognize that the business is people, not the product, not the process then, then you start seeing the importance of, of culture. 

And there's a quote, trying to remember from, I think Dr. Wayne Dyer, if I spelt his name properly. And it's, it says, when you change the way you look at things, the things you look at change, and I think it's true for culture, when you put people at the center, you start seeing that really culture is, is quite less important. And obviously here we will talk about, you know, team structure, core values, interactions, decision making, you know, the management, et cetera. So if the culture is optimized for efficiency, but your digital strategy demands agility and adaptability, all you'll get is efficiency. 

It's like, I was talking to a friend the other day. And we were likening it to, you know, planting the seed of pumpkin and expecting watermelon, which I see organizations do all the time. So, yeah, culture is vital to the success of digital transformation and beyond. Now you mentioned, on the second part of your question I think, the pandemic and its impacts, the pandemic happened unfortunately, and it just proves that a world we live in is unpredictable, interconnected and, and fast paced. 

And the pandemic had, has had an impact on the workplace culture, the global lockdown and the travel bans have appended, you know, assumptions about the nature of work and then corporate interactions organizations who are digitally mature and have culture that is conducive to agility could take advantage of the new reality, you know, providing digital services, etc. You see impact on teams. Some teams are more productive ‘cause of the ability to work from home and because of the trust and autonomy that, that these seem to enjoy. 

But on the other hand, I've seen more burnout than ever because of the number of, you know, video calls people need to attend just to show they're there or, and that they are not like not. And it's not just interactions within organizations; customers and organization interactions have also seen a big change. Last year, I had to cancel my trip to Dubai and I could cancel it, I could cancel my flight through a tweet. And I realized when I thought that organizations who empower their customer service to make, you know, decisions, timely decisions, will definitely be able to shine as more customers, you know, move to social media, et cetera. 

So in the case of Japan, I think the pandemic exposed structural and digital deficiencies in organizations and government agencies. I think, I don't know if you heard, it was reported that COVID cases numbers were, were actually faxed between agencies using fax machines. You can imagine human errors happen, and people overnight needed to work remotely. So one big service provider system went down because everyone was trying to log in remotely. It couldn't scale and adapt. And on the other hand, nimble startups and businesses were more creative and innovative. 

And so one of the focus in what we do in Aokumo is, is really helping organizations build a digital environment to improve employee experience and help customers build the digital culture needed in order to build adaptability and agility, and try not to be, you know, among the 70%, 75% that PwC study mentioned, so, yeah. 

Tim Butara: Yeah, that's a great way to kick off the episode and kind of set the tone in context for our further discussions where we'll be going more in depth. And maybe I want to continue, we already started talking about the uniqueness of Japanese culture and, and how Japanese companies had certain specifics with how they functioned during, during the crisis, how they operated throughout the pandemic. So, in what other ways is Japanese culture unique and how does that affect how companies do business?

Younes Hairej: Very, very good point. And well, I would put omoiyari at the top. Omoiyari means empathy. If you ever bought Japanese goods in a supermarket, for example, you would notice that the packaged product would come with a visual explanation and you will be, you know, easily know how to open it, you know, stress free. If you watched maybe the opening ceremony of the 2020 Tokyo Olympics, you would see the presentation about the pictograms, you know, new sports pictograms were added this year. And these pictograms were first created and introduced by Japan during the 1964 Olympics. This is an excellent example of omoiyari. 

So omoiyari is really everywhere in Japan from product design, trains and airports announcements. In fact, my Japanese teacher once told me that she missed her plane when she was abroad, because she was waiting for an announcement which never happened and I couldn't believe it until actually it happened to me ‘cause you just get used to the ease which you get information here in Japan. So omoiyari is also part of how Japanese do business. Businesses expect their vendors or service providers to have omoiyari, to not let them think much, you know, to provide exceptional services. It is critical to consider what, you know, your Japanese customer is likely to need and proactively present it.

The other thing is efficiency and quality. Japan is famous for taking a concept, honing it and making it perfect. Japan has one of the most complex train networks in the world. Yet trains are always on time. Everything is built for efficiency. Japanese in general, really demand quality and products and services. I think you probably have heard of the concept of monozukuri and, and kaizen, you know, quite important. These concepts emphasize quality and continuous improvement. So Japanese, you probably know, Japanese are very proud of the phrase “made in Japan”. 

So if we talk about organizational structure and culture, like, in the context of organizational structure, then we, and I can maybe talk about how Japan is, you know, consensus based culture may have heard of the concept of nemawashi, a consensus building technique, to reach decisions. It's a process, like, it's informal, but it sometimes can be lengthy and Japanese culture avoids confrontation. So, you need to be careful how you provide, how you give feedback, especially negative feedback. Trust is based on relationships, not how great your service is. So it's hard for new startups without a track record to a trade market. You see, you know, on corporate websites, companies showcasing like whom they do business with, the certificates they have and even which bank the company uses for its operations just, you know, to show that they're legit. 

So, another thing is, Japanese culture is really, what we call high context culture, much communication goes on nonverbally through subtle gestures, facial expressions and voice tones. And the goal is always group harmony. This is, it is perfect for homogenous and well established culture, but you know, the moment you start mixing people, you know, from different cultures, these complications happen. I've seen this in projects and the result, you know, the result was chaos and I had to step in many times to ensure all parties understood what needed to be done.  And you know who would do what and by when - maybe a little bit more on this later. 

So the ability to read between the lines is really important. The last, you know, aspect I want to maybe mention is, Japanese culture is based on hierarchy, hierarchy is extremely important in Japanese culture. The status in organization determines how members interact with each other and how they expect others to interact with them. So you need to pay attention to the hierarchy structure or hierarchical structure of the teams like customer teams or your server provider, and match it as closely as possible on your side. 

So for example, a Japanese vendor team has a senior manager, and a middle level manager, for example, and the junior staff, you need to match the Japanese vendor team structure as closely as possible. A rule that I broke many times actually, I would sometimes just join even if teams had only juniors just to get things done. And so these are, these are some aspects like, you know, showcasing the uniqueness in Japanese culture. 

Tim Butara: And yeah, maybe tying to your point about efficiency, didn't Japan actually kind of come up with a kind of precursor to, to agile methodologies? 

Younes Hairej: Exactly. And that's Kaizen. I think that's the Kaizen, and that was the genesis, I wouldn't say genesis, but it was a foundation for, for the lean thinking, for the agile, for the continuous improvement and, yeah, absolutely right.

Tim Butara: Yeah, yeah. That, that to me is a very fascinating part of the Japanese culture, you know, this kind of, this perfect balance of empathy, efficiency. And I would say kind of, I'm not sure if politeness is the right word, but, I think, I mean, politeness in kind of this moral sense of, you know, of compassion and kind of, you mentioned what was the expression you mentioned earlier, common harmony or something like that? 

Younes Hairej: Right. So this is group harmony, and there is the omoiyari, which is empathy, which is thinking about the other. 

Tim Butara: You mentioned, like right now at the end, you mentioned vendors or service providers. So maybe, can you tell us a little bit more about this, about the role that they play in all this, and maybe if there is a difference between, you know, Japanese service providers working with Japanese companies and foreign service providers working with Japanese companies?

Younes Hairej: Right. So, I think this is actually an important point. I think Japanese vendors and service providers in my opinion, are one reason why Japan's digital agenda is still behind. Strong vendor dependency among Japanese business is part of it. Organizations tend to outsource their IT functions or part of it to vendors and system integrators. And obviously that comes at a price; heavy customization, heavy vendor lock, ownership. 

I've seen some contracts for which you need an army of lawyers to understand what is being provided, who owns what, and what is a SLA etcetera. And also the lack of skills in organizations does not help. So organizations blindly trust their service providers. And so, you know, they say you are the average of five people you spend, of the five people you spend time with. And I really think, a similar concept applies to organizations; your vendors and providers can make you or break you. I think an organization's agility and the success of its digital transformation are significantly impacted by its vendors’ capabilities. 

I think you can’t be digital if your integrators or, you know, partners are not, you can't be nimble if you are dragged by the legacy and slowness of your suppliers and vendors and partners. So to be, I think to be digital, agile, I firmly believe that you need a network of modern partners who are agile, digital, and truly customer centric, truly invested in your success. 

And another, another reason is, the risk-averse nature of Japanese business prevent them from taking chances on small startups. This comes back to the trust we discussed earlier. There are many amazing startups and amazing products coming out of university labs. Japanese companies need to take a chance on these smart people, the language and cultural aspect that we discussed earlier are big barriers when it comes to foreign service providers. 

So at Aokumo, we work hard to be the modern digital partner Japanese businesses need. One of our strengths is global reach and local impacts. We believe that there should be a better way to engage with Japanese businesses through what we call co-sourcing and co-creation. And then obviously we are very happy to partner with global service providers to bring value to our Japanese customers. 

Tim Butara: Have you been seeing any other major changes to Japanese culture apart from what we discussed early on in the call and, and, you know, if so, how have these affected how Japanese businesses operate now versus, you know, how they operated maybe before the crisis?

Younes Hairej: Right. So I think the obvious one is working remotely. More people are moving to rural areas across Japan, new lifestyles emerge due to the pandemic. We see more companies migrating to the cloud and SaaS services. And I think the realization that remote work is a key differentiator when hiring, companies that are not remote work friendly are losing talent to startups that are embracing remote. And I think this is going to be a key factor in hiring, going forward. 

Also innovation in business models: lately, you see the proliferation of shops without stuff and not just food, but also clothing, for example, where you enter a shop, you pick what you want, try and pay through a QR code. Sometimes you just put money in the bin. I think only happens in Japan. Innovations in subscription based products and services. I think there was a subscription based diaper, providing diapers to kindergarten. 

So you see companies you know, innovative, which is great, but still a lot behind in terms of, you know, infrastructure. And then– so I think remote is big. You see companies even going as far as selling their order, moving to small islands, this was unthinkable before. Still, many companies are, are still asking people to come back to offices and go the other way, a hundred percent office. So yeah, I think remote is big, a big change. 

Tim Butara: So in this sense, it's not actually that different from the cultures of, you know, basically let's just, let's just call it what it is, the whole world, basically. Maybe another thing that I wanted to ask you is, what are some of– maybe some of the main challenges that Japanese companies face because of these, these culture characteristics, and maybe how do they compare to the advantages that are caused by these characteristics?

Younes Hairej: Okay. So these– going back to the aspect of the uniqueness of the culture, right? I would say, I think I would start from efficiency and quality. So “made in Japan”, embodies all the advantages of such unique culture, quality and efficiency. So in an environment that demands efficiency a Japanese team will excel. If it's clear what needs to be done and who should do what, you'll be amazed what people can do. But obviously the world is anything but predictable; it demands speed, sometimes even at the expense of quality.

I think Reid Hoffman said, if you're not embarrassed by the first version of your product, you've launched too late. So, the focus on, you know, quality, sometimes you get in the way. Nemawashi, which concept about, you know, decision making brings, you know, is good in a way, it brings contextual awareness, which is good, but can be slow and may not necessarily reflect the change in environment. So people making decisions are not always, you know, from the front lines. So this is another aspect that can be good, but also a disadvantage. 

So most organizations are structured to maximize efficiency through, you know, siloed departments and teams, and that creates frictions and slows things down. So you really want fast decision making, delivery, quick feedback, et cetera. Trust is a, is another, another thing which can be both, you know, great and sometimes disadvantageous. So, as I mentioned earlier, is relation based. So once big companies trust you by working with you, it becomes easier to do business. And that brings more customers, creates a virtuous cycle. But if, if not, if you're not known, then it's hard. 

Communication, what we call kuuki wo yomu. So that subtle reading between the lines is another thing. The communication within a homogenous team, like, you know, just a team composed of Japanese can be quick and very efficient, but it gets challenging when you, when you start building culturally diverse teams, especially when you mix people with different communication styles. And then you, then, you know, I read, you probably know The Culture Map by Erin Meyer, like great book I remember reading. And then you start being interested why, and I start asking actually people to read the book. 

Following the rule is another uniqueness. In Japan, people as, you know, follow the rules or in the case, like for example, was like mask wearing it's, it's actually for mask wearing, it's a mix of omoiyari and peer pressure. And I think the low COVID 19 infection rate is sometimes attributed to people wearing masks. People follow the unspoken wear mask rule. This is amazing when rules are clear, but when you have chaos, when things, you know, change rapidly and, and you need to adapt, following the rules or manuals can be counterproductive. 

And, you know, Aokumo, we are building a global and culturally diverse team born out of Tokyo. So we try to embrace many aspects of Japanese culture. As I mentioned earlier, omoiyari is one, is a huge one, monozukuri, concept of kaizen, the Shin-Gi-Tai, I haven't spoken about Shin-Gi-Tai, it's a concept used in martial arts, like judo; talks about the balance between, you know, the mind and structure or body and technique or technology. 

So, while ensuring that, you know, the teams have the contextual awareness and autonomy to, you know, to navigate, you know, uncertainty and, and even thrive in it. We're also helping our customers get accustomed to working in culturally diverse teams through, you know, workshops and tools like Obeya, something like the war room, where people from different teams come together, you know, to achieve certain outcome. 

Tim Butara: Yeah. That makes a lot of sense, yeah. Maybe in this final bit of the episode, we mostly, we focused mostly on theory. We barely dove into any practical examples. Maybe can we now dedicate a few minutes or a part of this episode to you telling us, or maybe giving us a few example of what it's like to actually lead a Japanese team and maybe, you know, share a particularly interesting case or challenge with us and our listeners. 

Younes Hairej: This goes back to the cultural aspects we discussed earlier, leading teams, that, you know, speak the same language is hard enough. And when you throw in language barriers, cultural differences, different communication styles in the mix, you need counseling from time to time, I can tell you, luckily my bosses were amazing in understanding, they would listen.

So you need people to help put systems in place to make sure that your information, you know, flows without miscommunications, without misunderstanding, without loss, and bring everyone under the same understanding, the same vision. Sometimes you may ask people to read The Culture Map book that I mentioned earlier. Giving feedback in the current way that matches the cultural context is essential. You need to make everyone trust each other and, know each other on a personal level. 

Read between the line culture. Also need to be careful about what you say and what you do. So you really need to walk the talk. I'll give some examples. Being an engineer, you sometimes get excited when you get a call or, you know, a CTO, and so you get a call at 2 AM in the morning, you know, ‘cause of an outage and, you know, you ask questions and you propose a fix, you get fixed and feel good. You ask to, you know, provide a postmortem the next day and make sure that things never happen. And then during your 1 0 1, you ask people, you know, to take ownership, to be owner. 

But on the other side, you're also, you know, asking them to call you whenever something goes wrong and, you know, and this is what they would do. So they live, they never learn to, you know, you ask them to take ownership, but then you don't create it. You don't explain first what the ownership means in such a context. And then you ask them to, you don't give them the opportunity and the chance to take ownership, and this is sometimes it's really you, you're sending mixed signals and it can be not how to call it productive. 

So you need to balance between being hands on and when to coach and mentor and make sure you are, you know, growing self-motivated, self-sufficient and self-accountable individuals and leaders, not followers. And then, and also like how to strike the right balance between giving teams the flexibility to choose their tools while maintaining the required level of consistency and the standardization. And this is where having a platform team is essential. When you get it right, you see a lot of success; when you get it wrong, you build the wrong thing and you, you may still deliver, but how the team is burnt out and I've experienced that.

But I can share maybe in a positive example, one of our first cloud center of excellence team achieved enormous success because it was diverse enough to allow for creative thinking without, you know, the overhead of the lost in translation problem that we sometimes see in the culturally diverse team operating with our culture map. So the team was autonomous and understood while the overall goals and the impact or on the overall mission. And they, it was a great success.

Tim Butara: Yeah. Yeah. I imagine that there's definitely some extra things that you need to consider. And obviously you, you have a lot of experience in that since, you know, you worked in those settings for quite some time and led teams in those settings. Well, and I'm guessing that if anybody from the audience who’s listening right now would like to learn more, maybe talk with you or learn more examples from you, they can, they can reach out to you and, you know, find out more about you there, where can they do that? 

Younes Hairej: I'm on Twitter and on LinkedIn, Hairej, I think just type Hairej and you’ll probably get my LinkedIn. 

Tim Butara: Yeah. Okay. And in any case, I'll add the links to those in the show notes so that people viewing the episode can contact you right away. 

Younes Hairej: Perfect.

Tim Butara: Okay. Thank you so much, Younes, for joining me today, for being our guest. It's been a pleasure speaking with you, and I hope our listeners enjoy the episode as well. 

Younes Hairej: Thanks, Tim. My pleasure is all mine. 

Tim Butara: And to our listeners, that's all for this episode. Have a great day, everyone, and stay safe. 

Outro:
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