While organisations don’t have worldviews in the sense that people do, the worldviews of individuals leading organisations, right along with their personalities and capacities, shape organisational character and culture. Think of Anita Roddick at The Body Shop; Ingvar Kamprad at IKEA; JRD Tata at Tata Group. 

Discussions of “management worldview” and mental models do appear, though, in scholarly work on leadership and organisations. Academic journals of all stripes address worldview: history of ideas, computing, terrorism, literature, military studies; as economic historian Douglass North puts it— the relationship between mental models and institutions is “an intimate one.”* 

Here we consider worldview in the context of Japanese companies, a useful field of application because more than a few Japanese companies are in a time of transition. Although we cannot say for sure what they’re transitioning to, we do know what they’re transitioning from. 

KPI: Society

Japan’s “stakeholder” model of capitalism has shaped the management norms and practices of its companies since the late 19th century. The model’s central tenet is that private sector actors shall make ongoing contributions to society, and the primary role of profit is to enable these. Japanese companies are famous for their long-term view, reflected in the fact that  Japan is the country with the most companies going back 100 years or more.

From just after WW2 until recently, you could draw a straight line from Japan’s post-war economic growth to the nature of the social contribution expected of companies: they would innovate to make useful products to modernize daily life while providing gainful employment for heads of households. Financially secure families would weave the fabric of a more affluent society where shared values, norms, and priorities would be duly served.

The way it was put into practice created integral features of Japanese companies such as long-term employment relationships for mainly male employees, job rotations assigning employees to various divisions of the company every few years; high value placed on seniority, and long working days and weeks in the office. This social mandate led to highly consequential assumptions about people, work, and way of life.

Worldview in transition

For decades, Japan’s model fostered innovation, created jobs, and increased wealth. Still today, most Japanese companies display a deep and long-term commitment to society.

Perhaps it’s natural that managers take their cues from what they perceive as successful precedent. The problem now is that many Japanese companies are still managing with practices based on outdated assumptions that no longer reflect the realities or speak to the aspirations of Japanese society, particularly of people under the age of 40. As individuals they may not share those old implicit assumptions at all, but inertia in management has kept them operative nonetheless.

It’s no secret that the tidy straight line, connecting the zeitgeist of Japanese society to the nature of the social contribution expected of companies, faded long ago. Getting a clear read on what corporate social contribution means today  will take intentional updates of the management worldview.

Working from a new worldview

As diversity and globalisation deepens in Japan, the range of desirable and achievable lifestyles is widening, and Covid-19 forced more companies to adopt more flexible workstyles. In these changes lie excellent clues to the nature of social contribution that Japanese companies can make going forward. But to see them, Japan’s companies are having to make, explicitly, new assumptions about the world and people. The new worldview assumes that the company’s success contributes to sustainable prosperity around the world, that gender is not a factor in determining a career path and that people feel more motivated when they are empowered to steer their own development.

The push for sustainability, too, is helping Japanese companies to refresh their management worldviews. The SDGs offer them a framework for re-conceptualizing their social contributions. Many are using it, inviting much-needed questioning (why so paper-based?), re-framing of outdated concepts (annual recruitment only), re-phrasing of now-quaint formulations (“ladies’ issues”). 

Building organisational self-awareness

It is not the job of a leader to provide a ready-made worldview for others in an organisation to swallow whole. Rather, it is to elicit a response of engagement that chimes with individuals’ personal worldviews; to tune in to the frequency that calls forward higher productivity, and more substantive well-being within the organisation. To do so, a leader should challenge others to understand their own worldviews and to update these continuously based on learning. 

I encourage leaders who sense that the assumptions underlying their organisation’s purpose, vision, values, and “best practices” are outdated, or no longer reflect the aspirations and concerns of the societies they serve, to do some worldview-level thinking. They should do so as individuals, in the ongoing effort to self-develop, but also as leaders in collaboration with a diverse set of thoughtful colleagues.

Japan’s unique business worldview

The Purpose of Capitalism: Insights from Japan documentary takes an inside look at some of the largest and oldest Japanese companies to find the answer. It premieres on CNBC in October.

To read more about the film and be the first to receive insights and updates, click here.