Ultimately it may well be the courts that have the last word on a relationship that began eight years ago, went sour in 2013 and was brought back from the brink by February 2017 after some five months of frantic parleys between leaderships from both sides.
The joint venture between NTT Docomo and Tata Teleservices started coming undone when it could not meet the financial goalposts set, prompting the Japanese partner to file for arbitration in 2016; last June, it won a Rs 7,250-crore award. The Tata company wasn’t keen to make the payment as it thought it was “illegal.” Both sides traded allegations and the standoff was threatening to reach the point of no return.
It’s around that time that Cyrus Mistry was sacked as chairman, Ratan Tata replaced him temporarily and wasted little time in initiating a patch-up. By end-February, the two parties had reached a settlement, only for the Reserve Bank of India to oppose it.
It’s now over to the Delhi High Court. The good news, though, as a senior Tata official puts it, is that “the nasty talk from both sides has clearly ended.”
When Docomo CEO Kazuhiro Yoshizawa and Ratan Tata began writing to each other last September, it culminated in a meeting between the two sides’ top brass three months later. That was a major step towards rapprochement. “They (the Docomo management) saw him (Tata) as a man of honour and decided to work towards finding a solution,” says a senior Tata official who was privy to negotiations.
To say that Tata could do what Mistry couldn’t (or undid) would be simplistic. “Mistry did not mishandle the issue but it boiled down to how to deal with the Japanese. Mistry probably did not give them much face time or did not personally oversee the situation. The Japanese did not take kindly to meeting lawyers. That’s where leadership is tested,” reckons the Tata insider. Ensuring that one respects the cultural nuances in deals is critical to finding solutions, he adds.
Tata officials say a crucial factor that contributed to smoking of the peace pipe is the commonality in the traditional philosophies that both corporations are steeped in – Zoroastrianism for the Tatas and Shinto for the Japanese.
This common ground is crucial because dealing with the Japanese is not for those who prefer the cut and dried way of working to ancient traditions of honour and code of conduct. “For them it is the promise that matters. The transaction may not be on paper but even a verbal commitment is honoured down generations,” said a senior member of the Tata group. The moment you bring in the accountants and lawyers, the relationship is over.
Nissan, Mitsubishi, Toyota, RGF, Hitachi, Toshiba, Panasonic are a few of the Japanese firms in India. And those working for or dealing with them have been trained on how the Japanese culture plays a significant role in their business deals.
Global Consumer managing director A Mahendran, who has worked with a clutch of Japanese partners, says they look for empathy and long-term relationships. “They do not tolerate a breach of commitment and if it happens, they will not touch the company with a barge pole. They care for the word, written or oral.”
Mahendran recollects defusing a difficult situation with a Japanese partner by bringing in another Japanese company representative in India to offer suggestions and help find a solution. “The Japanese listen and give weightage to advice from another Japanese. That helped break the deadlock and find an amicable solution.”
A senior executive at the Indian joint venture of Toyota, who has worked with the car maker for years, reveals the importance of the spoken word. “There is no casual chat, no opinions given without extensive research. Every time a Japanese colleague airs his views, there is a lot of thinking that has gone into what he said,” said the senior executive who did not wish to be named.
R Gopalkrishnan, a former Tata Sons director, says the Japanese spend a lot of time on relationship-building. “Time is not of essence, a relationship is. So, if it takes five or 10 more meetings to work something out, so be it. Understanding and being sensitive to cultural nuances of your foreign counterpart is important to deal successfully with them,” adds Gopalkrishnan, who has now founded Mindworks, an advisory firm.
As perhaps Tata will testify, the Japanese show tremendous respect for age, which for them translates into hierarchy — while Tata is in his late 70s, Yoshizawa is in his early 60s. But even a gap of a year or two makes a difference. “I was made to understand that seniority means more experience because of the number of years spent in the world. This means more wisdom and therefore has to be respected,” said the Toyota executive.
Hierarchy is sacrosanct, said a former executive at a Japanese automaker pointing out that “even our workstations were arranged according to hierarchy.” Yet, respect for coworkers has to be shown across the board and is not determined by grade or rank. A former Maruti Suzuki worker in the sales and marketing division recollects how they had to be careful to address all co-workers with the suffix ‘san’ — similar to ‘ji’ in Hindi.
Every call taken has a process. Just like the boardroom, the Japanese have the ‘kobeya,’ or ‘tiny room.’ All Japanese firms have these rooms demarcated for strategic huddles, with walls plastered with charts and whiteboards.
Employees working in Japanese companies say planning is critical. About 60% of the work takes place in the planning stage as there is rarely any rethink or redrafting once the call is taken. Another 20% is dedicated to execution, 10% to checks and balances and the rest to action. In comparison, western corporations tend to focus 20% on planning, with the rest of the work equally distributed across the remaining three segments.
Like in deal-making, the quest for an enduring relationship is reflected in hiring too. “They have a sense of permanency and refuse to leave a company. They also prefer long-term plans and not the five-year ones that Indians are used to,” said R Suresh, MD of Japanese executive search firm RGF in India. Suresh says he was once asked to submit a 20-year plan for his business. Clients offer 50% of a candidate’s annual salary if the search firm manages to remove him or her from the current role in a Japanese company. This is because getting senior executives to break their bond with the employer is very tough in Japan.
Japanese tradition also calls for taking calls only after going to the place of action. A Japanese automaker flew down a team to Bengaluru from Tokyo because they wanted to visit a water pipeline before giving approval to their Indian team. All they had to do was approve the laying of a 17-km water pipeline but they preferred to visit the site, travel those 17 km, figure out the problems and accordingly take a call