Creating a Melting Pot Wins Results

By Brad Glosserman, The Japan Times, December 15, 1994.

In theory, the task of the foreign company in Japan is simple. It merely has to combine the best Western managerial strategies with the best Japanese business practices. In practice, said Jean-Luc Butel, president of Nippon Becton Dickinson Co., Ltd., "the Japanese have a hard time understanding the duality of purposes."

The problem is particularly acute for the new company. Becton Dickinson, for example, mixes foreign nationals with Japanese whO have worked for competitors, other health care companies and unrelated industries. Then "you try to do the big melting pot," Butel explained.

The process takes time. Even though Becton Dickinson has been in Japan for nearly 25 years, "we have not yet developed our own culture," Butel noted pointedly. 

He is probably too modest. Becton Dickinson's world wide success -- the company recorded $2.45 billion in sales in 1993, up 4 percent -- has established it as the market leader or strong number two in almost every one of its product lines. In Japan, the company has shown steady growth since it became a wholly owned subsidiary in 1985 sales have tripled in 12 years and reached ¥12.26 billion in 1993.

Butel attributes his company's success to three factors, all of which stem from a careful understanding of Becton Dickinson's "dual nature."

First, there has been the methodical pursuit of a business strategy that capitalizes on the company's strengths. "We haven't gone for the 'big bang' approach. Instead, we focus on business practices that have been successful in the U.S. We have brought differentiated products to the market and created a dedicated and knowledgeable sales forces to market them," Butel explained.

That sales forces is invaluable because they provide the data and information that allows company executives to plan for the long term.

"We don't start with the assumption that Japan is different. We talk to different people -- in marketing, product development and other areas -- and we take our worldwide plan and figure out how the pieces fit together. 

"Sometimes it is hard to fit Japan into our worldwide strategy because of the costs involved. It is particularly hard to establish a presence in a new product category. But we have support from the highest levels of the company," he said.

Nippon Becton Dickinson enjoys top level support because of the second prong of its strategy: It makes active used of Japanese standards to lift the company's worldwide performance levels. In 1987, the company opened a plant in Fukushima to get closer to the market and its customers. That move has paid big dividends. 

According to Butel, Japan has the toughest, most exacting medical standards in the worlds. "The manufacturing standards here are way ahead of those in use in Europe and the U.S. But over there, they are happy with our products.

"In Japan, they still complain even though we are considerably ahead of our counterparts," he said.

The benefits accrue to the entire organization because the knowledge acquired in Japan is diffused throughout the entire Becton Dickinson organization. 

Butel doesn't see that education as a subsidiary benefit, but as essential to the company's future. He believes that "if you cannot compete with the bigger Japanese companies, you will pay the price back home eventually. You will find Japanese competition in China, India, Indonesia and elsewhere throughout Asia. It is better to be here, where we fight the best battles."

The final element of the Becton Dickinson strategy is keeping its employees informed of things going on over their heads. With personnel rotating in and out of the executive suite, it is essential that management practices have continuity regarding local employees.

"Our changes in direction are well planned and well explained. We have no surprises for our Japanese employees." Butel said.