Consultants: no longer useful in Japan?

by Vault Consulting Editors | September 02, 2009

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An interesting snippet from the current issue of the McKinsey Quarterly: apparently Japanese consumers are getting over their obsession with brand name luxury goods. Big deal, one might think—there's a recession on, so it's only natural that spending on Louis Vuitton luggage and Hermés neckwear would drop, as it undoubtedly has elsewhere in the world. But, as the McKinsey piece points out, Japan is different in that "the current crisis has not only reduced the discretionary spending of consumers but also accelerated fundamental shifts in their attitudes and behavior."

So marked is the shift in attitude, in fact, that it played a role in the recent Japanese election (an event, you may recall, that led to the ruling Liberal Democrat party losing the power it has held almost continuously since the end of WWII). Yukio Hatoyama, the incoming Prime Minister and leader of the victorious Democratic Party of Japan even went as far as publishing an editorial—picked up by the New York Times—that outlined "a new path for Japan." Chief among Mr Hatoyama's concerns is finding a way to "put an end to unrestrained market fundamentalism and financial capitalism, that are void of morals or moderation." And he's under no illusions about where to point the finger of blame for the current economic mess we're in either, citing a global obsession with "American-style free-market economics" as the root cause for a slip in economic regulation. Ouch.

Perhaps the biggest shift suggested by Hatoyama's rhetoric, though, is in his attitude towards workers. "In terms of market theory," he says, "people are simply personnel expenses." Whether or not he got that line straight from a consulting 101 textbook is unknown, but his following comment definitely wasn't sanctioned by the industry: "But in the real world people support the fabric of the local community and are the physical embodiment of its lifestyle, traditions and culture. An individual gains respect as a person by acquiring a job and a role within the local community and being able to maintain his family’s livelihood." So much for outsourcing.

Further, Hatoyama also says that, "(u)nder the principle of fraternity, we would not implement policies that leave areas relating to human lives and safety — such as agriculture, the environment and medicine — to the mercy of globalism."

It would appear, then, that something of an experiment is getting underway in Japan, one that leaves behind many of the accepted norms—both social and economic—of the recent past in favor of an ideology that prizes collective social good over individual economic prosperity. Whether it's a step into a bold new future or a doomed attempt to recreate the past remains to be seen, but it also raises some immediate questions for any that seek to do business in the country: what use are traditional metrics—and the consultants who rely on them—in a society that implicitly rejects them? And what if the ideology takes root and spreads elsewhere?

--Posted by Phil Stott, Vault Staff Writer

Filed Under: Consulting

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