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Sony, Sharp and Panasonic Project Annual Loss in FY2011

February 10, 2012

In the previous post, I introduced a socioeconomic issue that today’s Japan faces – namely Galapagos syndrome. Like some endemic species fit into the isolated ecosphere of Galapagos Islands, some industries in Japan has evolved into the dead-end branch, off the main trunk of the global evolution. An article on February 7th, ‘Picture Dims for Japanese Electronics,’ on the Wallstreet Journal show-cased one of those endengered spieces in Japan – Consumer Electronics. Once-celebrated Japanese electronics giants like Sony, Sharp, and Panasonic seem to have lost thier way between Apple’s creativity and Samsung’s scalability.

So I wonder, remembering that made-in-Japan electronics were once considered as the best in the world, how it could have happened. Where did we miss the course of evolution? Here are three causes that led Japan to the current situation.

Denial: We are Still OK

Denial is the first reaction when someone faces a difficult situation that he doesn’t want to deal with. Even today, many Japanese try to think that Japan is in the mainstream of the world evolution. They say made-in-Japan still has the best quality and technology, and eventually the market will appreciate their value again. Only thing that we have to do is to move on the same path with more dedication while being patient and persistent until this hard time passes. As we learned from Steve Jobs, however, denial cannot change the reality. We’ve reached to the dead-end. Admit the failure and learn from it.

Indecision: Let’s Discuss How to React

The others are more pragmatic. They may not like it, but they admit Japan got stuck in the dead-end. What they don’t know is how to change the course. One of Japan’s strengths was to build a very efficient and consistent self-driven system. An example is the fact that, even after having so many different prime ministers with a short cycle, this country is functioning fine without stopping any public services. This is because a Japanese organization doesn’t need a strong leader to drive. It’s a self-driven system.

This works great when we are on the right track, but works terribly when not on the right track. If there is no driver, how can it change the course? To change the direction of a self-driven organization, you’ll need to have a consensus from every members of the organization. But how can you get a consensus if the organization doesn’t have a strong leader? Oh, we got stuck.

Escape: We Shall Withdraw and Live Peacefully

Once upon a time, Japan employed a foreign policy of seclusion. People ignored the outside world and only focused onto the domestic affairs. As the world was not as flat as is today, we were able to enjoy our lives in the isolated paradise. Some people want to go back to that time, advocating a new seclusion policy. They say, “hey, we are a rich country with a very unique culture. We can survive without interacting with the outer world, who are not enough smart to understand our value. Let’s close the ports again and don’t get bothered by the evil ‘globalization’ anymore.”

As you can easily imagine, this paradise is illusion. Japan took part in this global competition decades ago and has enjoyed some early wins. We can not withdraw from the game bacause we don’t like our hands. The game is on.

Today’s Quote

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change” by Charles Darwin

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