Japan © Moyan Brenn

Japan and Germany – two different worlds

© private
Marianne Schulze
Freelance journalist

With around JPY 5.1 billion of published transactions, the Japanese property market was almost back to the volume of the pre-financial crisis boom year 2007. True, at 19.3 per cent, the overseas share now is half as much again as it was back then. But the percentage is low by international comparison. The reasons for this are to be found not least in the fact that Japan’s property market was for a long time dominated by corporate and private ownership and an institutional market has only emerged since the turn of the millennium. German investments in the Japanese institutional property market began around 2002, peaking in 2007 and 2008. In these two years, with almost JPY 300 billion, German open real estate funds completely dominated the total to date of around JPY 500 billion of investment from Germany. Since 2012 German investors have once again become increasingly active in Japan, with institutional investor funds (insurance company and pension funds) completely dominating investment in Japan since the financial crisis.

Dr. Leonard Meyer zu Brickwedde is President and CEO of Kenzo Capital Corporation, a company founded to facilitate access to the Japanese property market for long-term investors. He himself has been living in Japan for many years and is well aware of the differences and stumbling blocks in the relationship between Germans and Japanese.


Dr. Leonard Meyer zu BrickweddeYou are a long-time resident in Japan. What is different there compared with Germany/Europe?

“Japan is the better version of Germany!” All the virtues attributed to Germans, such as reliability, diligence and punctuality, are still to be experienced in unadulterated form in Japan. Not only does the train in Tokyo depart on the dot but the front doors of carriage no. 8 will open and close at precisely the location marked on the platform for the front doors of carriage no. 8. I am in Japan as a businessman and as a businessman I very much appreciate this absolute reliability. It is one of the most important reasons why at some point I decided to remain in Japan and build on what I have worked hard for in Japan.

What do you miss when you are in Japan?

Actually nothing, when I am in Japan. If, however, I travel to Germany and Munich, then I notice what is not available to me in Japan and what I miss: the short distance between city center and nature; the relaxed atmosphere in the beer gardens, the butcher’s shop and bread shop around the corner, Munich’s Viktualienmarkt.

What do you miss when you are in Germany/Europe?

Respect in the way people interact with one another and the reliability of the railway system and public transport. It is difficult to become accustomed to the fact that meetings simply start late and nobody sees any need to apologize. In Japan I am at the scene of the action five minutes before the meeting, like everyone else. When all is said and done the meeting should start at the agreed time. But should it happen that someone is running late, he will call in as soon as a delay is to be anticipated, and let people know. In Germany heavy rush hour traffic or winter weather is an accepted excuse for being late; the Japanese anticipates the volume of traffic and weather conditions.

Meetings begin with a respectful exchange of business cards, which are acknowledged/read. It is not simply just a ‘Japanese card game’ as is said to me so frequently (not only) in Germany. Exchanging business cards is the very first act of acquaintance, the very first impression of the other, of one’s vis-a-vis. This moment is important and is also perceived as such.

Or else in the store in which I am shopping: my purchases are handed to me, frequently only at the door, not simply pushed at me. The important thing is, this respect applies on both sides. It is of course obvious who is the purchaser and who the seller, who is the restaurant guest and who is the waiter, but both display respect and esteem when taking leave of one another. That is also a reason why there is no tipping in Japan. Whether service provider, waiter, salesperson, road sweeper or company boss – all of them are working to satisfy the individual with whom they are engaged at that moment – the guest, client or stockholder – and the other person’s satisfaction with their performance is what the individual is working for, this success is his pride, and that of his family. Nobody needs/wants to be additionally remunerated for this (by a tip).

Where do Japanese and Germans frequently “misunderstand” one another?

Basically there are hardly any misunderstandings between Japanese and Germans because actually both set great store by family, social community, long-term thinking, planning and behavior. Admittedly a gulf is now emerging because in Germany we are increasingly willing to conform with the Anglo-Saxon economic model: shorter term planning, subjecting ourselves increasingly to the dictates of the capital markets and striving for unrealistic profitability targets because we think this is what the market demands. Company cultures then collapse in consequence, as the example of the railways illustrates. We are also willing to widen the gulf between top salaries and the average wage. Japan is not following suit. It is true that here as well there is a widening gap between top salaries and the average wage but Japan is in a completely different league. The salaries of the executive directors of the largest Japanese companies (Nikkei 225) are 60 times the average salary; German executive directors earn a multiple of around 150 and in 2013 the 350 CEOs of the largest 350 US companies, according to Bloomberg, earned a multiple of 331.

Japan still has a rock solid, very broad-based middle-class and is more wedded than Germany to the values of long-term stability and success. More than in Germany it is about the common good, the good of the company, the employees, suppliers, buyers/customers.

When Nissan was acquired by Renault in Japan, Carlos Ghosn took a different tack and pared back numerous long-established relationships. Despite Renault/Nissan’s short-term success this example has never really caught on in Japan.

This different trajectory is now causing frequent misunderstandings between Japan and Germany. Germany is actually known in Japan for its long-term perspective and the changes that Japan is experiencing in Germany and in doing business with German companies are coming as a surprise. At the same time German companies in Japan are surprised that many formerly shared values are still encountered in Japan in their unadulterated form. A good example here is bonus agreements: quite unlike in London you will not get any team in Japan to put in a special performance for the bonus since absolute commitment is already a fundamental prerequisite and matter of basic willingness. The bonus is readily accepted as an ‘add-on’ but certainly does not determine conduct and performance. The most important asset that a foreign company acquires when embarking on business in Japan is its Japanese team and its work ethic.

Which “cardinal sins” can one commit when dealing with Japanese?

A lack of respect! You can make all the mistakes you like in Japan, but it should never be mistakes arising from negligence and a lack of respect. So never push your business card across the desk or – even worse – flip it across.

But respect also includes taking Japan seriously as the second-biggest developed economy, especially by us stationing decision-makers on Japan in the country, or else having news reporters reporting on Japan from Japan and not from Hong Kong, which is a four-hour flight away, as CNN or the Spiegel do, for example, or from Singapore which is a seven-hour flight away, as the BBC does and a number of German company headquarters. How would we in Germany react if reporting on the political mood in Germany were to be from New York or if Germans’ attitude towards the issues posed by the refugee influx were to be reported from Moscow? In the interests of an accurate picture of Japan, those who report on Japan or who decide on business in Japan should go to the expense of being at the heart of the action, on the ground.

What do the Japanese like about Germany/the Germans?

Our culture, our profoundness, our values, our absolute commitment. One of the most prominent Germans in Japan is – apart from Goethe and Wagner – Oliver Hahn, because he represented all that, and still does. The Japanese have a great respect for his unrelenting commitment and will to win on behalf of the team.

What do they not at all like in Germany/about the Germans?

German food with three meals one after the other but also and only because German food is very much heavier compared with Japanese food. Apart from that actually nothing in particular, as long as we are respectful, punctual and reliable. However, occasionally when I am traveling with Japanese guests in Germany and the train arrives late and departs in a completely different configuration to the one intended, if into the bargain the host of a meeting is late and nonchalantly makes light of it, then the Japanese guests’ nerves are very strained indeed.

Leave a Reply