October 29, 1993

Professor: Customer a key to Japanese business success

WEST LAFAYETTE, IND. -- Japanese businesses have a secret weapon: their employees think like the customer, says a Purdue University researcher just back from Asia.

"Here in the United States companies give plenty of lip-service to the customer being the most important person," says John Hannon, assistant professor in the Krannert School of Management. "But seldom is the customer the central focus in the selection and development of employees.

"In Japan, every employee is taught to think like a customer. The customer loyalty that results from well-trained, understanding and informed employees makes all the difference."

Hannon is fresh from a one-year visit to Japan, where and a colleague, Yoko Sano, a professor at Keio University in Tokyo, studied the relationship between companies and customers. They looked at how the emphasis on customers influences the way employees are recruited, hired and "developed."

Hannon says American companies tend to stress human resource management -- making the most of employees' strengths. The Japanese concentrate on human resource development -- encouraging employees to develop new skills and areas of expertise.

Recruiting in Japan resembles a courtship. It is a socialization process that usually begins when university students start their last year of school. Relying heavily on input from alumni, employers choose a group, or cohort, of students they wish to employ. These students are trained and brought along as a cohesive group, not as individuals. Much of the contact they have with the company is directed at how to serve the customer rather than how to gain personal success.

Some Japanese companies even administer personality and achievement tests that are designed to tell how well a recruit will perform in positions that require customer contact.

Interviews can last four or five days.

"You have to understand the commitment that is expected of an employee," Hannon says. "That relationship lasts an average of 30 to 40 years. Employees don't go in with the intention of working a few years and moving on. Employers don't look at it that way either."

After individuals are hired, they go through a formal orientation program long before they ever step inside the company. These programs can last from two weeks to six months. Even part-time employees may spend as much as 40 hours in customer-based training.

"You don't see graduates starting at middle management positions either," Hannon says. "Japanese companies want their employees to start close to the customer. It's not uncommon for top graduates to begin by working as clerks, janitors or bellboys for as much as a year."

Why do recruits do it?

"Security is the big reason," Hannon says. "Japanese people value group affiliations and teamwork. They know that if they take pride in their work and are loyal to their employer, they will be taken care of. So they work on the principle of 'ganbatte,' which means to persevere."

Hannon says that Japanese companies operate in a similar fashion: "The bottom line isn't so much profit as it is a continual effort to produce a superior product."

Through it all, the customer remains the center of attention. From day one, Japanese recruits are instructed on the importance of customers to business success. In America it is typical for a new employee to hear more about the company's background and successes than about its customers.

Japanese say the best way to develop loyalty is to treat customers with the highest levels of respect and service.

Hannon says it works.

"When we were ready to leave, it was actually kind of sad to say good-bye to people such as our dry cleaner, pharmacist and grocer," he says. "They treated us so well and with so much respect that we hated to leave them. Talk about loyalty!"

The Japanese system isn't free from problems, though, Hannon points out. He says the rigid and highly structured training programs often stifle employee creativity.

"Japanese companies are going to have to find ways to expand and grow in the face of cutbacks and restructuring. It would help to loosen the reins on employees," he says.

And while Japanese customer service is exemplary, Hannon says it may be a little too much so. "There is a serious overstaffing problem in Japan," he says. "If there is such a thing as full employment, they come closest to it."

In America, however, Hannon says the scales lean too far in the opposite direction.

"I'm sure that many Americans feel the same way I do when faced with half-hearted customer service," he says. "As customers, we're sometimes made to feel as if we're too demanding, or we're the ones with the problem. American companies need to be more aware of the customer's needs."

Hannon says American companies can achieve better customer relations by focusing more on the team mentality in their employee training programs and by stressing human resource development.

He cautions that new business philosophies won't cure what ails American businesses.

"It won't make any difference what kind of strategies we adopt or how many new technologies we develop if we're unable to connect customers with our products and maintain that connection," Hannon says. "The only way to link the two is through a highly specialized and intensely monitored customer relations program that begins with employee training and culminates with the customer."

Writer: Victor B. Herr, 765-494-2077
Source: John Hannon, 765-494-5871
Purdue News Service: (765) 494-2096; e-mail, purduenews@purdue.edu

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