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- Hacker News
- The one key thing that is completely incorrect is there is no horizontal hierarchy. Everyone has a boss, a boss that you must not suggest is wrong. I'm very fond of visiting Japan but having worked there, found it impossibly challenging to get anything done. When things work well it is great and the focused culture produces some great things, but when it fails it leads to catastrophe as no one is able to voice early in the process. Issues are only discovered once they are serious.by ktallett
- Article argues that we don't see J-model software companies (or at least they aren't very good) because there's something inherent about software that demands innovation, green field work, blue sky ideas, etc., and that those things only happen (well) in an H-model company.
I disagree. So much of software is long lived or should be. We desperately need incremental refinement of already solid products and instead we have decay and rot because H-modelers make bad calls. (E.g. OSes.)
My team develops a product that is 15+ years old. As I read how J-models work, I kept thinking, "Yeah, we need that. That would help a lot. I'd love to work for decades on this product if we could do it thay way." Our product is mature and always in demand. But it always needs maintenance and it frequently needs significant improvement to keep pace with the changing environment around it. Bad H-model judgments have sent it in the wrong direction sometimes based on directives from on high, when, actually, the team itself holds so much knowledge and expertise that we can often self-organize in ways that maintain, refine, and improve this 15 year old system. We could benefit so much from a move toward proper J-model thinking.
by cvoss - I'm not sure I'd say a company that makes ceramic toilets also making a tool for memory chips... which is also ceramic is really 'different things'. They're clearly a ceramic company. Different tolerances, but similar expertise.
Now the paper company got into the hotel business seems a far better example. No idea how that happens.
by hennell - I'd bet the leaders of the Japanese ceramic company have some deep ties and focus on ceramics, while the leaders of the US paper company have deep ties and focus on the financial industry.by dv_dt
- > Now the paper company got into the hotel business seems a far better example. No idea how that happens.
That's easy. They have corporate visitors to their corporate offices and the available hotels are insufficient. They decide to just make their own hotel.
There are many corporate campuses with an embedded hotel. Some run by the corporation itself, some with significant management contracting with the corporation, and some independently managed.
Large corporation has a small travel business is very common.
by toast0 - Here’s a weird aside…
I like to create little businesses. Most of them are unsuccessful.
I tried to get a bit of business liability insurance, including E&O for this, but it’s proven to be somewhat difficult:
I do too many things.
I design and sell 3D printed plastic parts, write books, publish a blog, and publish software.
I’ve tried this like three times (it’s time consuming).
Last time I decided to stick with just digital assets and I put “software development” but listed my blog and books, figuring most software companies run forums, publish guides, and blog.
They declined because they don’t cover “publishers”.
I guess you need to buy insurance for each division or something.
I was just looking for some general business liability and E&O while I figure out what works.
I wrote How to Lose Money with 25-Years of Failed Businesses about some of my tries over the years.
https://joeldare.com/how-to-lose-money-with-25-years-of-fail...
by codazoda - As someone who dreams up many types of businesses (yet rarely go through with any), thanks got sharing your blog.
Reading it now, great read!
by greazy - A hypothesis I had on why some countries have more conglomerates than US is that access to capital and funds are much harder in those countries in comparison to US. When access to capital is comparatively more limited, more innovations falls to the party that has comparatively easier access to capital (conglomerates) and therefore reinforcing their position as conglomerate.by claw-el
- I, from a country with few conglomerates, found the Commoncog explanation for why they exist to be interestingby BJones12
- > the J-firm, run by its employees and largely indifferent to the interests of shareholders, exists simply to continue existing
I don't know if all companies should be run like Japanese companies, but there's something very heartwarming about this. Some companies exist for the purpose of employment, and that's okay. In fact it's admirable and makes me want to cheer.
- Apple is basically this already.by ymolodtsov
- I do also think there's a charm to this model but there's a real cost also with Japan's economy stagnating compared to the United States in the last 30 years.by cm2012
- > American firms, for example, tend to prioritize focus above all else: it would be bizarre for an American paper mill to also operate a concert hall and an airport catering business
I don't think Kimberly-Clark ever opetated a concert hall, but they did run an airline (Midwest Express) and K-C Aviation was an airplane servicing firm.
It's not that American companies don't operate in diverse businesses. Maybe they're less likely to, but it happens when the need arises... if there's no reasonable supplier for an important input, then you start one, or you ask an existing supplier if they can start a new line of business that's somewhat related.
The headline example is that Toto, known as a maker of ceramic toliets, is making a lot of money making specialty ceramics used in semiconductor manufacturing. Which yeah, ceramic manufacturer makes ceramics.
The US business market does like to spin-off divisions when they are successful and can be independent.
by toast0 - The article mentions that American toilet manufacturers do not make non-bathroom related ceramics.
- There have been conglomerate fads from time to time in American business. Interestingly ITT
https://en.wikipedia.org/wiki/ITT_Inc.
used to have a big position in hotels and just about everything else and it trained quality movement advocate Phil Crosby
by PaulHoule - A great example is the bowling lane people AMF, who have over the years made things like pinsetters, jet-skis, motorcycles, scuba gear, shovels, and nuclear reactors. All spun in and out of the company over its lifeby murillians
- Yeah, we actually had our own era of “conglomerates” - they were very big from the 1960s through 1980s. Companies like ITT, Cendant, Gulf+Western, GE — formed from tons of acquisitions, sprawling across completely unrelated industries.
At one point in the 1990s, you could buy a toaster from the same company that makes airplane engines, MRI machines, and produces “Saturday Night Live.” And you may have financed that toaster through their financial arm (GE Capital). Eventually the many lines of business were spun off from companies like this.
What came next was a very different type of consolidation - companies like Comcast, Chevron, and the current “AT&T” who went from being regional players to buying as many other companies just like themselves in order to maximize economies of scale - they’re huge but really just do one or two very closely-related things.
by xp84 - > So why are Japanese companies like this? Why do they do so many different things? And how do they manage to do so all those different things so well?
Author says: Japanese companies excel in lots of very different domains because it’s inherent in how they’re structured.
My response: No mention of culture? Sure maybe it is because of how they are structured somewhat, but it's also because of their culture. Japanese are masters of their craft. Look at the best pizza place in the world, the best burger maker in the world.. they are not in Italy or America, but in Tokyo.
Japanese take pride in their work and master their craft. A small pizza-shop owner in Tokyo doesn't make great pizza because of how it was structured. It's cultural. Japan takes Western concepts, and applies an obsessive cultural devotion to mastery (Shokunin).
Look at all the foreign-things Japan is now famous for: Japanese Whiskey, Denim, bread making, Japanese curry, etc.
by toephu2 - The best pizza restaurant in Tokyo is run by an Italian. So perhaps the Italians edge out Japanese in terms of craft?by sunrisetiger
- Look at the best pizza place in the world, the best burger maker in the world.. they are not in Italy or America, but in Tokyo.
That's a bold claim. While I'm sure the average quality in Japan is significantly better than ours, I would put the best pizza places in Jersey, NYC, and CT up against anywhere in the world.
by dec0dedab0de - "Look at all the foreign-things Japan is now famous for: Japanese Whiskey, Denim, bread making, Japanese curry, etc."
I think all your examples are terrible (bread) or overpriced (Japanese Whiskey). There are also a lot of places that are pretty crap in Japan like restaurants where they clearly don't really care.
Compare to Italy that wherever you go everything seems really high quality. I was in a gas station in the middle of nowhere and I had a really great cappuccino for example.
by tuna74 - > Japan takes Western concepts, and applies an obsessive cultural devotion to mastery (Shokunin).
Thank you for explaining this. I was alawys amazed how the japanese would take the cuisine from other countries and make it better in all aspects than the country that originated it.
- I’ve always had the flip position of this. It’s that the ultra smart Japanese guy doesn’t have that much economic mobility. So he practises excellence in his field. Patio11 pointed out The Sort on his Twitter feed and after that I’ve been convinced of this.
EDIT: I forgot about this other thing. He also does describe a mechanism for that culture.
by arjie - My experience in American organizations is that products and services need to not just make money, but make a lot of money. There is zero appetite for things that make a little bit of money relative to the cash cows of the company. You could say this is in part focus, but it is also based on internal accounting. Small product lines are saddled with total company overhead costs even if they do not apply to said product or service. Not good or bad, but it can lead to strange situations where you have a successful product that everyone complains doesn’t make any money.by etempleton
- > My experience in American organizations is that products and services need to not just make money, but make a lot of money.There is zero appetite for things that make a little bit of money relative to the cash cows of the company.
Is your experience in the same America where Meta is losing another 4-6 billion $ this year in AR/VR business unit, after losing 19 billion $ last year. Similar with Google's and Apple's AR/VR unit which also consume a lot of money in R&D(funding a lot of high paying jobs) and not make any money, yet.
So sure, there's no risk appetite for things that make little money, except for all the evidence proving the contrary.
by joe_mamba - On the flip side if a small part of the company is suddenly making a ton of money, urge investors will demand it be spun off into a separate corporation to “realize its value.”by jimbokun
- > There is zero appetite for things that make a little bit of money relative to the cash cows of the company.
The other side of this is only new baby firms invest in that thing that makes a little bit of money. But given enough refinement, that thing starts making more and more money as it gets better and better. And soon, that new baby firm outshines the incumbent. The incumbent's wasn't incentivized to invest in the thing that started off worse but eventually became the new model. Think Kodak with film-vs-digital cameras.
This was the thesis of 1997's The Innovator's Dilemma, written by the guy who coined "Disruptive Technology".
by floatrock - > zero appetite for things that make a little bit of money
For obvious reasons, the expected rate of return needs to clear the hurdle of the risk-free interest rate. This puts a pretty high floor on activity that is "worth doing". This is a mechanism by which the phenomenon of ZIRP diversifies economic activity.
- While things like the expectation of lifetime employment (or at least very long tenure) may sound appealing, it also creates a job market with very low fluidity. In practice, if you miss that narrow “fresh out of school” hiring window, you can end up facing pretty unfavorable prospects later on.
People can still get hired mid-career, of course, but many companies traditionally hire based more on long-term potential than immediately usable skills, since they expect to train employees heavily through OJT. That also means the number of openings for experienced hires can be relatively limited. And because of the seniority-based structure, even experienced workers may end up starting near the bottom anyway.
There was an entire generation of people who missed that initial hiring window because of economic downturns and hiring freezes, and many of them still struggle to land stable permanent positions even today.
Things are gradually changing, but many structural assumptions are still there. For example, parts of the legal and employment system are historically built around the assumption of lifetime employment, which also makes it difficult for companies to dismiss permanent employees once they are hired.
by unsignedint - > This is very different from how most wealthy countries operate. American firms, for example, tend to prioritize focus above all else
It hasn't always been like that. Western companies, including US companies, used to have lots of diversification as well (maybe not as much as the Japanese, but much more than today's companies still: not that long ago a company like IBM used to make mouses and keyboards, in addition to their photocopier, mainframe, software, and personal computer business. They even made a hydrogen peroxide analyzer in 1982![1]). They did so because it makes the company more resilient, and because in that time their shareholders wanted the companies they invested in to be resilient, to have a reasonable yield/risk profile.
Things changed in the 80s, when deregulation generate a boom in financial products. Then, individual company resilience was seen as obsolete, you'd cover your risk through portfolio diversification and all you'd want from a company was the pure yield, and companies were streamlined to make as much profit as possible, everything reducing the ratio being sold or terminated.
Fast forward 40 years, people believe it has always been like that and it must be so kind of deep cultural difference between Asia and the West.
[1]: https://web.archive.org/web/20050119055353/http://www-03.ibm...
by stymaar