By Richard Mort | Strategic Intelligence Consultant

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Twenty years in Japan. And the one thing I keep coming back to is this: the companies that fail there rarely fail because Japan is difficult. They fail because they never questioned their own assumptions about how business works.

Those assumptions come from everywhere else they've operated. Europe. North America. Singapore. Vietnam, even. And Japan is not “those places”. The language is different, yes. But more fundamentally, so is the decision logic. That's the key pillar that goes under the radar of most Western companies until it's too late.

Japan's IT services market is projected to reach $128 billion by 2031. IDC tracks it as its own standalone category, separate from the rest of Asia-Pacific. The opportunity is real. And the graveyard of failed entries is real too.

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The silence isn't silence

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The meeting ends. You feel good about it. Nobody said no. You send a follow-up. Then another. Nothing comes back.

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Most Western professionals read that as rejection. It isn't.

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You've run into nemawashi (根回し). The word comes from horticulture, namely gardeners binding a tree's root system months before transplanting it. In Japanese business it means the informal, one-on-one consensus-building that happens before any formal proposal is submitted. Stakeholders are approached in private, in strict hierarchical order, through conversations that sound casual and are anything but. By the time a formal meeting happens, the real decision is either already made or has already been blocked.

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After that comes ringi-sho (稟議書): the written proposal that circulates upward through the organisation, each reviewer stamping their personal seal. Toyota's documented decision process for major initiatives runs nine to ten months, more than triple the US equivalent. Through a Western lens, it may seem like needless delay. From the Japanese side, careful governance. Derisking is the keyword.

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The people in the room don't decide

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This is something even experienced Japan hands struggle with.

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When you pitch a solution to a Japanese enterprise, you're asking the gemba (現場) — the people who will use your product day to day — to take ownership of a new and unfamiliar risk. If they're not comfortable, the deal won't go through. No management approval changes that.

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The real power in a Japanese organisation often lives with the long-tenured kacho who owns the technical relationship, the bucho who quietly filters what reaches the top, or the former executive who still has the ear of the board. None of these people will be introduced to you as decision-makers. But they are nonetheless.

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Western companies often mistake Japanese hesitation for a negotiating posture. Incorrectly. It's risk assessment from people who will be living with the consequences of this decision for years. That caution, the same caution that slows deals down, is exactly why Japanese enterprise systems are as reliable as they are once you're inside.

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The language problem is worse than you think

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Japan ranked 96th out of 123 countries in the 2025 EF English Proficiency Index. Score: 446. Global average: 488. That's the 11th consecutive year of decline and the first time Japan has sat in the "very low proficiency" band.

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The weakest scores are in speaking and writing. Which, ironically, are exactly the skills you need for verbal negotiation and written technical specifications.

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I've interpreted in enough high-stakes Japanese meetings to know what happens when a Western team assumes English is the lingua franca. Cue polite nodding. Multiple utterances of "I understand" meaning "I heard you" rather than "I agree." Specifications reworked at triple the original cost. And a quiet erosion of trust that the Japanese side never names openly but never forgets.

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Technical documents in Japan are not translated after the fact. They're built bilingually from day one, or the feedback loops break down at every stage.

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Who you send matters

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Around ten billion business cards are exchanged in Japan every year. The meishi exchange — both hands, card oriented so the recipient reads it immediately, higher-ranking person presenting first — is not a formality. It's the opening read of the entire relationship. Both sides are calibrating where everyone stands before business is discussed.

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Send a junior to meet a senior Japanese executive and the deal doesn't stall. It ends. Instead of outright rejection, what follows is a gradual cooling-off that nobody explains, because doing so would itself breach protocol. You won't be told what went wrong. The energy will simply die away and eventually morph into ghosting. 

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Why Vietnam fits where other partners don't

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The solution to Japan's business culture is not to Westernise your approach. It's to work with partners who already understand the logic from the inside.

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Japan is Vietnam's third-largest cumulative foreign investor: $76 billion across more than 5,000 projects, with over 3,000 Japanese companies operating in-country. These figures reflects real cultural alignment.

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Using Hofstede's 2010 framework, Japan scores 46 on individualism, Vietnam 20. The UK scores 89, the US 91. Both Japan and Vietnam are strongly collectivist, comfortable with hierarchy and oriented toward long-term relationships over short-term transactions. A Vietnamese engineering team is well aware of why Japanese clients want consensus before commitment, because they themselves operate that way already.

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FPT Software, Vietnam's largest IT firm, reported $500 million in Japan revenue in 2024 — 32% annual growth — according to the company's own disclosures and solid commercial proof of the cultural fit.

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Where Dirox fits

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Dirox was founded in 2003 by two French entrepreneurs who believed that the best outcomes come from combining Western business discipline with Vietnamese engineering talent. They dubbed the approach “right-sourcing” and nowadays, the company operates across Ho Chi Minh City, Tokyo, Hong Kong and Newport Beach.

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For an European or North American company trying to land a Japanese enterprise account, that structure means something practical. You engage with Dirox in the business logic you already know. Dirox handles the Japanese and Vietnamese layers. You don't have to become a Japan specialist. You need a partner who already is one.

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Chinh Phan, CEO, has 30 years in digital transformation across luxury, pharmaceutical and retail — including senior technology leadership at Cartier — and speaks five languages. He knows what it costs when the wrong specification document lands on the wrong desk.

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Laurent Peguret has chaired Mekong Plus, an NGO working in Vietnam's Mekong Delta, since 1994. That's not a CSR footnote. Japanese enterprise clients pay close attention to whether regional commitment is real or convenient. Thirty years of NGO work answers that question before it's asked.

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The companies that win in Japan rarely have a better product than the ones that lose. What they do have a better understanding of who actually decides, how those decisions are made and what it takes to be trusted at the gemba level — not just the boardroom. That's what Dirox was built to do.

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Richard Mort is a strategic intelligence consultant, interpreter and Japan specialist based in Dusseldorf, Germany. He spent 20 years in Japan, holds permanent residency and speaks Japanese, German, French and English fluently.

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