By the end of the 1980s, the United States and Japan were headed in opposite directions. With increasing budget and trade deficits, the U.S. seemed a nation in decline-sluggish, complacent and unable to cut it in a world where competitive standards were set in Tokyo. Japan, by contrast, was the country that would inherit the earth, its relentless ascension driven by the quality of its products, the discipline of its work force and its government’s fiscal sobriety. The friction turned acrimonious and personal. Japanese officials last year dismissed U.S. workers as slouches, ill equipped for the global marketplace. As one politician put it: “U.S. workers are too lazy. They want high pay without working.”
Today’s headlines tell a different story. Japan is in crisis, its economy in its steepest postwar slump. Suddenly there is talk of downsizings and the unraveling of a social contract at the core of Japan’s success: in return for loyalty and ceaseless hard work, Japan Inc. guaranteed a job for life. The U.S., by contrast, is growing briskly. As Japan’s economy contracted in the fourth quarter last year, America’s surged by nearly 5 percent.
Yet one dilemma unites the two countries. The U.S. recovery Bill Clinton inherited will evaporate if it fails to make new opportunities for displaced or disenchanted workers. The payoff would be an adaptable work force, quick to seize opportunities. At the same time, Japan’s work force, too, must adapt. The fabled salaryman who toils in return for a lifetime job may be at risk amid Japan’s slump. Is the likelihood of a trim, flexible work force ascendant in America but fading in Japan? Has the U.S. worker who boldly charts his own career eclipsed the Japanese worker whose marriage to the company now leaves him vulnerable? Who now, is better off?
For a year NEWSWEEK has tracked the lives of two contemporaries, one Japanese and one American. Tokyo’s Shigeo Shimoda, 48, has worked most of his adult life for Matsushita Electric Industrial Co. Ltd., one of Japan’s most powerful firms and the maker of Panasonic products. Tom Hazlett, 48, of Evanston, Ill., abandoned corporate life before it could abandon him: he started his own business. Each man’s path-one rigid but secure, one fraught with anxiety-violates the other’s mind-set. These are their stories.
SHIGEO SHIMODA: THE COMPANY MAN They hear the talk of crisis now, the men and women of the second sales department of the Panasonic industry sales office. THE DAY OF THE MASS UNEMPLOYMENT AGE HAS ARRIVED, read a recent headline in The Yomiuri Weekly, a popular magazine. The Japanese economy is in tatters, and the bad news just keeps getting worse. Late last month Shigeo Shimoda, the general manager of the department, sat in his living room at home watching television when the startling news came: Akio Tanii, the president of Matsushita, had suddenly and unexpectedly resigned, his 36-year career over in a blink. Lifetime employment in Japan, it turns out, isn’t necessarily for everybody. The question now is, is it for anybody?
Huge companies-like Matsushita-know that they are too bloated to be as fiercely competitive as they once were. Suddenly, something has to give, and many in Japan have begun to wonder: is Japan’s “salaryman” finally going the way of William H. Whyte Jr.’s long-lost Organization Man in America-betrayed, ultimately, by the cruelties of market economies?
Shigeo Shimoda insists he doesn’t spend time worrying about it. He is, as usual, much too busy. Shimoda is a 48-year-old father of two sons, Kentaro, 21, and Keisuke, 18. Born the year World War II ended, he is a product of Japan’s postwar miracle. Like so many others of his generation, he went to work for a giant Japanese company as a young man and hasn’t stopped since. Ask Kentaro, now a college student in Tokyo, what his father’s hobby is and he responds simply, “Work.”
For 23 years now, Shimoda has worked for Matsushita Electric Industrial Co. Ltd., arguably the archetypal Japanese company. Conservative, disciplined-in many of its plants the workers still do morning calisthenics-the company now employs 242,000 people worldwide and churns out products under names like Panasonic and Technics. Today, Shigeo Shimoda is a department manager, or “bucho,” with two main responsibilities: he sells an array of electronics products like computer chips and cathode-ray tubes to a range of foreign industrial companies; then he makes sure those customers keep coming back for more. In the United States, a management consultant once said, “the customer is always right.” In Japan, he could say, “the customer is God.” Keeping God happy is Shimoda’s primary responsibility.
He has been doing so, in one guise or another, since 1970, when he first joined Matsushita. He had spent two years at a small trading company in Tokyo, where he met a young “office lady” who would become his wife. Soon after, he jumped at a chance to join a company that had powered Japan’s postwar economic miracle, and he’s never looked back. Salarymen of Shimoda’s generation, after all, do not job-hop. They are loyal. He is, his wife, Naomi, says matter-of-factly, “kaisha ningen … such a kaisha ningen.”
Kaisha ningen means a company man. In the 1970s, when Japan was desperately trying to overcome the effects of two oil shocks, the white-collar worker came to be known as “moretsu sarariman” The fierce salaryman. Shimoda’s two boys were born in the early ’70s, but working as a junior manager in the company’s import department, he rarely saw them awake. “My husband used to come in long after the children went to bed,” his wife recalls. “He was good enough to call in and tell me that he did not need supper. But when he called it was usually 10 or 11 in the evening.” Naomi, as all good Japanese wives are supposed to do, would wait, sitting up in the tiny living room of their one-bedroom suburban Tokyo apartment.
In Japan, the company man does what the company wants-and so does his wife. In September of 1980, Shimoda sat in the bath after returning home late one evening, chatting with his wife-“It was the only time we could talk usually,” she recalls. “What,” her husband asked that night, “do you think about moving to Germany?” Naomi had never been outside Japan in her life. She thought first, she says, about her children. Where would two young Japanese boys go to school in Germany? But a salaryman’s wife, too, is kaisha ningen. “I just said I was happy for him,” she says.
The following January, Shimoda was traveling all over Western Europe, scouring it for products Matsushita could import back to Japan. It was a time of intensifying trade disputes between Japan and the West, and his company “felt great pressure to do something to relieve the trade imbalance,” he recalls. It wasn’t easy. While Matsushita flooded the world with consumer electronics, it sent back, thanks to Shimoda, lots of Italian tomatoes. During their 10 years in Frankfurt, his wife says, he was on the road one third of the time. And when he wasn’t traveling, he would come back after 10 almost every night to their suburban home. “Unlike other families who say they could get away from the hectic salaryman’s life once they were outside Japan, ours got even worse,” says Naomi.
It is easy, in the West, to misunderstand this kind of life. Can any Japanese man who leads it really care much about his family? To most Japanese the equation is entirely different; in Japan you lead this kind of life because it provides a sense of security. And you do worry about the consequences. For children, the disruptions an overseas assignment can cause are universal, of course. Shigeo Shimoda’s eldest son, Kentaro, then 9, attended his first class in a German school three days after arriving, speaking not a word of the language. But for the children of Japan’s salarymen there are dilemmas that are acutely Japanese as well.
In Japan, at the age of 15 almost everyone takes the single most important test of their lives: a high-school entrance exam that, as Shimoda puts it, “can determine your future to a very great extent.” Do well and you get into a good high school, and that greatly increases your chances of getting into an elite university. And once in an elite university, passage to an elite company, like Matsushita, is all but assured. Mess it up, though, and you’re in trouble. There are no second acts in Japanese life.
Shimoda’s two sons attended a Japanese school once a week during their early years in Frankfurt. But as they grew up in Germany, becoming fluent in the language, their parents knew there was going to be a problem. “They were quite behind in their Japanese education since they had no chance to learn science or mathematics in Japanese,” Shimoda recalls. He tells the story for a reason: in corporate Japan, tireless work and loyalty do bring rewards beyond a steady paycheck. One day, on a visit back to Tokyo, he met with a “Consultant” from the Matsushita personnel department. What high schools was he interested in for hi’s son? “Matsushita people then went down to the school and talked to the teachers and administrators on our behalf,” Shimoda says. Kentaro, eager to return, left Frankfurt in 1987 to attend a well-regarded Kyoto high school, where he lived in a school dormitory.
Four years later the parents followed. Shimoda had saluted, gone to Germany and done what was asked of him. In the process, he had caught the eye of one of Matsushita’s European managers, Hiroshi Takagi. When he was named director of industrial sales in Tokyo, Takagi wanted Shimoda as one of his managers, partly because he knew he would work hard. In March 1991 Shimoda proudly took his new position in Matsushita’s office in central Tokyo. He sat in Japan’s open offices, where a bucho always sits: back to the windows, facing the people he manages.
But when the Shimodas returned, Japan’s notorious “bubble economy”-the frenetic speculation that drove up land and stock prices to outrageous levels-had collapsed. It wasn’t clear, however, how bad the aftershocks would be. Tokyo still acted rich-particularly to an expatriate couple just returning home after 10 years. “I looked at the prices in stores as if they were an illusion,” says Naomi Shimoda. Prime Minister Kiichi Miyazawa would give a speech calling on Japan to become a “lifestyle superpower.” He meant that men like Shimoda should be able to knock it off and take a rest once in a while.
It was a nice thought. But by the middle of last year it became obvious to Shimoda and his colleagues that the good times were gone. Orders from his major customers, like General Electric, had stagnated. For his younger subordinates who are not yet managers, there was an ironic result: they were working less. But that also meant they earned less from overtime, which in good times ran account for nearly 30 percent of an average office worker’s paycheck.
Matsushita managers who are at Shimoda’s level earn the equivalent of about $120,000 per year (an amount that goes a lot farther in the United States than it does in Japan). They are not eligible for overtime. It is part of the ethic of Japanese offices that when times are tough, managers toil longer than ever. Shimoda today leaves his new house-built in part with money borrowed from the company-just before 8. He does not get home much before 11. “Our main concern now is how to increase sales,” Shimoda says.
Shimoda and thousands of others like him are now doing the things that are standard operating procedure when the economy slows. Business entertaining-usually four nights a week-is no less frequent, but far less profligate. He now shuns pricey “hostess bars.” The customer still gets to take a taxi home after a night of drinking. But Shimoda takes the subway with the other tipsy salarymen.
The subject of the recession, he concedes, comes up in the office often. “We joke, ‘you’re next, you’re next’.” But gallows humor this isn’t. Shimoda simply doesn’t consider the possibility that he, an aging middle manager in a company that needs to cut costs, could become a victim. “I have never imagined or thought of myself being in that position,” he says with a smile.
That, in the end, is why Shimoda and his family put up with a lifestyle that seems so alien to Americans. It is why the salaryman works so hard-because in hard times, he expects his loyalty to be returned. It is a faith that doesn’t exist anymore in corporate America. Who today at any American company-even the strongest like Intel-would dare say, as Shimoda does: “There is a sort of mental contract between a company and the employee in Japan. I thought once of leaving Matsushita. When the economy was very strong here I thought I could start a business importing European products into Japan. But I thought of what my late father would have said to me. He would have asked, what had I returned to the company? The company has invested a lot in me. It has trained me.” It is an inordinate amount of faith, and corporate Japan knows that it can’t be easily trifled with. But it is a faith that, recession or no, may not be sustainable in the long run.
Will there be kaisha ningen a generation from now? Only the children of today’s company men-now getting their first whiff of hard times-know for sure. On a recent Sunday afternoon, Shigeo Shimoda puttered in the small garden in back of his house, something that is, by Tokyo standards, an extraordinary luxury. His sons don’t look forward to Sundays, because it’s usually cleanup day. “This is the house we all worked so hard to build,” Shimoda will say with an enthusiasm that bewilders them. “Let’s take care of it!” Kentaro, now a college student studying law, has heard it before. “My father,” he says, “is a very diligent and serious man. He is a typical Japanese man. He does what is considered right. Some people say he is a successful businessman working for a top corporation. But do I want to be like him? I think to be a salaryman is the best way if you want to have a stable income, and a stable life.” He hesitates. “But for now, I am not sure if I would choose to be one of them.”
The headquarters of Hazlett Associates fills the small, third-floor bedroom of a house in Evanston, Ill. In less prosperous times, the answering machine chirped a message recorded by Tom Hazlett’s wife, Jan, giving callers the impression that Tom had an employee. Today there is less desperation. If Hazlett happens to be gulping lunch in the kitchen when clients call, he can grab another of the household’s five phones. The Hazletts’ three kids then fall silent. Given the shared perils of the last few years, even 6-year-old Ellie knows that customers aren’t impressed by an executive-search firm that plays the TV loud.
For 15 years, Tom Hazlett made his way up the rigging of corporate America. Like Shigeo Shimoda, he thrived as the organization man, eventually landing a $90,000-a-year job at an advertising agency. But he wasn’t content. The loyalties that bound people and their companies were coming unglued; today’s valued veteran was becoming tomorrow’s layoff victim. So Hazlett, seduced by the American notion that being your own boss is best, did what Shimoda never would: he quit his job.
Six years later, Hazlett’s gamble seems to have paid off. But it hasn’t been easy. He has survived stress attacks and washed down Rolaids with Maalox. To help, Jan began a new career, struggling to sell real estate in the depths of the U.S. recession. When the family’s future seemed bleakest, Jan tried to cheer up Tom with a greeting card, a wry advertisement for “Ed’s Dump and Croissants.” Inside she scribbled, “There are always opportunities.” She wasn’t wrong. Tom Hazlett’s story is a cautionary tale for would-be entrepreneurs. But it’s also a glimpse of what’s possible in a culture that thrives on personal risk.
Hazlett grew up in Evanston, just west of Northwestern University on Lake Michigan. At the age of 8 he worked himself out of his first job, collecting used clothes hangers; the manager of College Cleaners, unable to use the bulging wagonloads Hazlett delivered daily, stopped paying him. After high school he moved on to Amherst College in Massachusetts. For the class of ‘66 the game plan was simple: you parlayed your education into a lifetime niche, usually with a big corporation or professional firm. After a tour as a naval officer, Hazlett picked up an M.B.A. at Northwestern and took a job in Cincinnati marketing Vanish toilet-bowl cleaner for the Drackett Co.
Tom had met Jan before he moved. She was artsy, more spontaneous. He was quiet and methodical, so much so that Jan called him “P-Squared,” for Perfect Person. But he also had integrity and wit. They married in 1973 after her dad warned Tom that Jan had no head for money. She did, though, have the entrepreneurial bent of her father, who owned a dental lab in Indianapolis. She’d heard the sermon as a little girl at the dining-room table: start your own business.
Hazlett didn’t think much about that. He eventually landed at Needham, Harper & Steers, a Chicago ad agency whose triumphs included handing McDonald’s the slogan “You deserve a break today!” Needham took care of its own-so much so that when a life-threatening viral disease hobbled Hazlett for six months, his paychecks never stopped. Part of him cherished that paternalism: had he been working solo, he and Jan might have been wiped out.
But like others whom the threat of death slaps to their senses, Hazlett came back changed. He had less stomach for the office politics and memos. The 1980s preached personal fulfillment, and Hazlett needed a dose. He considered leasing a seat on the Chicago Board of Trade, where the pits sprouted young millionaires. But that was too bold. He jumped instead to Tatham-Laird & Kudner, another blue-chip Chicago agency, where he ran major accounts for the likes of RJR Nabisco. Hazlett stayed for five years, eventually becoming a partner. But by the end, corporate life was unbearable. Even today Hazlett gropes to explain why. It wasn’t any one incident. He was a misfit, a mentor who developed younger talent at a time when agencies were turning to star systems. His habit of stepping aside to let subordinates deliver the major presentations they had prepared earned some murmurs of disapproval from his superiors. Jan, watching the frustration build, parroted her father’s sermon: go into business for yourself. At the same time, he couldn’t pick up Business Week without seeing some wunderkind in red suspenders. He got star-struck. If others could do it, why not Tom Hazlett? So late in 1986, with a $145,000 mortgage and his third child only a month old, Hazlett quit corporate America and joined a small sales-promotion firm, sure he could become a part owner.
But in all his careful calculations he had overlooked his greatest weakness. Because he didn’t know how to sell himself without the corporate trappings, he didn’t attract as much business as he’d hoped. It was as if his lifelong preparation-the right schools, the right companies-had suddenly abandoned him. “I had only paid lip service to the possibility of failure,” he says.
So he decided to quit and switch careers altogether. The onetime mentor who enjoyed bringing subordinates along would take up executive search, a field that had always interested him for its emphasis on people. He learned the business by working at two small Chicago firms. But by late 1990 the corporate bloodbath he had barely escaped was hurting the search industry. The firms that had wanted him no longer needed him. Hazlett, reasoning that a nation with 2,000 struggling search firms could use one more, set up shop.
The Hazletts were now on their own. Jan was trying to jump-start a career in real estate. Tom flooded the mails with announcements of his new business. He positioned himself as the cool, investigative matchmaker who would work intensely on a small number of searches. For months Hazlett didn’t have a client. Independence quickly became a blessing he could barely endure. He would awaken at 4:30 a.m., frantic for someone to offer him a job, yet confident that with the nation’s economy so miserable, no one would bother. At night, after the kids went to bed, he and Jan would try to sort it out.
With both income streams slowed to a trickle, they seemed to be balancing the checkbook every hour. They sold their house and moved to the one they’re now renting. They also slashed spending: a week at a friend’s house in Wisconsin replaced skiing vacations to Colorado. Still they continued to deplete their reserves. As the noose tightened, Jan couldn’t shake questions unthinkable back when Tom was an organization man. Will our kids sell apples on the street?
Jan, at least, could flee to a busy broker’s office. Tom worked alone, sitting in the third-floor office, sifting through a rising tide of resumes. With time-a commodity in alarmingly plentiful supply-he honed his sales pitch: I’m not like the big search firms. You’re looking at the person who will do the work-which usually starts with about 100 telephone calls. Some jobs trickled in. Greg Jiede, general manager of TeleAmerica, a marketer, needed an account executive. Hazlett risked Jiede’s ire by rewriting the job description and requirements. But Jiede liked all four of Hazlett’s finalists and hired one of them.
As his business blossomed, Hazlett’s workday lost the rhythm of his years as a salaryman. Telephone calls now start as early as 6 a.m. and alternate with correspondence, searches of databases and trips to Chicago’s Union League Club, an exclusive enclave that is his surrogate office. More calls dribble into the evening; the toughest involve telling job finalists that they were just that. At night he spends another solitary stretch, organizing the next day. His foes are the casual telephone chat and the extra cup of coffee over the sports section: if he doesn’t discipline himself, no one will.
The rhythms of the Hazletts’ family life have changed as well. Old roles have begun to reverse: as Jan’s career pulls her away from the house, often it is Tom who drives the morning car pool, starts dinner and hangs up Ellie’s wet swimsuit. At times he’s envious of Jan. “There’s a collegial nature to her office that I miss,” he says. But Hazlett enjoys the new responsibilities; his children are more a part of his life than before. Still, balancing work and home hasn’t grown any easier. “I made the decision that my family is my top priority,” he says. “But sometimes I feel guilty. When I’m driving Jeff to soccer practice, should I be making more phone calls?”
Guilt aside, the future looks bright. Hazlett’s goal is at least a dozen searches a year; right now he’s working on seven, and the rebounding U.S. economy should bring more. After a dismal 1991, the couple’s income last year approached the salary Tom abandoned in 1986. This year they should easily exceed it. Still, Tom’s business isn’t as stable as he wants. “I can’t yet say it’s irretrievably panned out,” he says.
The closest Hazlett comes to the silken safety net beneath his Japanese counterpart, Shimoda, is a new support group of eight businessmen, all refugees from corporate America. They meet monthly and call themselves the Lost Boys. They talk out one another’s dilemmas and swap names of potential clients. It’s not like life at Matsushita, but then, neither is the personal pride Hazlett brings away from each lunch. “I know my business is starting to grow-and it’s my business,” he says. “If I correctly understand the Japanese, this is the essential difference in our mind-sets. I am alone. I’ve hit a couple of walls, but I’m not going to stop until I get through the next one. Not now.”
Until recently, Shimoda’s way looked like a key to Japan’s economic surge. Now that rigidity may hamstring its ability to recover. Meanwhile, Hazlett’s rocky, but successful, transition shows the adaptability Americans must display if they’re to remake the U.S. economy for the 21st century. Over the long haul, which country will benefit most? Perhaps the one that combines the best traits of both men: retaining some sense of corporate loyalty, without losing the courage to take risks.
Most Japanese firms won’t fire workers outright. But they have ways of getting the message across:
Salarymen stop getting real work or are shunted off to subsidiaries.
When Nissan shut a major plant, it offered “transfers” to distant island of Kyushu.
Trading giant Mitsui offered longtime employees half pay for seven years.
IBM Japan pledged funding to workers who quit to start new businesses.
