Welcome, Mr. President

New ACCJ President Larry Bates shares his vision and story

By Hugh Ashton

Three goals for growing the ACCJ brand

Newly elected ACCJ President Laurence (Larry) W. Bates has big things in mind for the ACCJ. And big hopes often necessitate change. Effecting positive change is already tricky enough at home, but in another culture the challenge can be formidable.

For Bates, the best way forward is by accepting the system for what it is and working with it, instead of against it. “Every business culture is what it is, and you need to work and promote change from within it,” he says. “We [ACCJ] may not be part of the Japanese establishment, but we are part of Japan as a whole. We have been welcomed by the establishment, and we are recognized as having an independent voice. We want to think of ourselves as an honest broker or change agent.”

In November, Bates spoke to the ACCJ’s ordinary general meeting about three themes related to change and growth that he wishes to emphasize during his term as ACCJ President.

The first theme is growth in personal leadership. By offering its members the opportunity to grow and become contributors to their companies, the ACCJ can help to energize these member companies, which can then feed back into the ACCJ, contributing and helping to build the organization’s brand.

As a practical example, he asks whether the Chamber is doing enough to reach out to its Japanese members (about 50 percent of its membership) and providing them with the value that they are seeking.

“I’d like to experiment with programs directed towards Japanese members, in either English or Japanese, to give them something that they can’t necessarily get in terms of globalization skills inside their companies, such as how to work with and influence diverse teams,” he says.

Likewise, Bates hopes to provide a forum for female ACCJ members who wish to develop their leadership skills, and to help them meet the challenges they face in their companies through the Women in Business Committee, giving them confidence to communicate internally about the value of their external engagement.

He also sees room for personal growth with regard to “vertical” functions, and lists government relations, human resources, and sales as examples of functions, for which training and growth opportunities may not be available in smaller enterprises. He hopes the ACCJ can reach out to employees in smaller organizations to assist with such personal growth programs.

The second growth area President Bates is keen to engage is the ACCJ itself. Since the “Lehman shock” of 2008 there has been a decline in Chamber membership, probably due to the fact that there are fewer Americans and foreigners living in Japan than before. However, Bates says that this “should not be a reason for this market not to be considered a market for growth—either for business or for the ACCJ.”

He points out that many American companies are doing extremely well, with Japanese staffing sometimes even at the CEO level. He adds that there is still a lot of room for American players in the Japanese market, even if the national growth rate of the world’s third-largest economy slows to one percent or even falls to zero growth. The market is far from saturated in many areas where American companies do business, including some critical fields of technology such as information technology, life sciences and clean energy.

Building on the membership engagement programs implemented by past ACCJ President Mike Alfant, President Bates hopes to use such engagement to generate excitement through growth, which will enable the ACCJ to achieve many of its ambitious goals. Social media, and its use by forward-thinking CEOs, is another tool he feels that members of the ACCJ can use to communicate more effectively with one another—and with external stakeholders—on important issues, allowing them to contribute as thought leaders for growth in turn.

The third area where President Bates hopes for forward movement is in the field of advocacy. This includes revitalizing Japanese growth and expanding market opportunities for US companies. Even if TPP comes to fruition with Japan’s hoped-for participation (more on this below), he says, “We need to expand US-Japan bilateral government dialogue with the participation of the private sector, whether it be in clean energy or economic harmonization.”

He points to the success of the Internet economy model originally proposed by the ACCJ. This model is based on a White Paper produced by the ACCJ a few years ago, and has resulted in positive, constant interaction between the public and private sectors from both countries.

The intention of these dialogues is to create an appropriate regulatory environment that will ultimately create a more vibrant Japanese economy and more business opportunities for ACCJ members engaged in the Internet economy sector.

Another growth initiative comes from an ACCJ White Paper issued two years ago (Charting a New Course for Growth: Recommendations for Japan’s Leaders), which highlights specific policy reforms that the Japanese government could implement to create the right policy environment for growth.

Over the past 20 years, the paper concludes, the major factors driving job growth in Japan have been foreign direct investment and entrepreneurship—whether domestic or foreign. According to the paper, a regulatory environment that encourages and promotes these two growth drivers would be beneficial for the future of Japan. These are two major areas where the ACCJ can act as an advocate for change.

 

Journey to the East

Bates can trace the path to his current position as leader of Japan’s premier foreign business community and change agent to his first arrival in Japan nearly 30 years ago. What many don’t know, though, is that he started his Asian adventure in China. Growing up in a small town in Connecticut, at a time when Nixon and Carter were thawing US-China relations, the seeds were planted early for Bates, who saw China as the potential future setting for his career.

Majoring in Chinese studies and economics at Yale, Bates remembers that the 20 students who started the intensive course with him dwindled to only five by the end of the third year. Following graduation in 1980 (B.A., summa cum laude), he taught English on a Yale-China Association fellowship to English majors at Wuhan University in the Yangtze River Valley in Central China, shortly after the re-opening of China’s universities following the Cultural Revolution. He returned to the US to attend Harvard Law School in 1982 and to study Japanese.

While working for the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison in Beijing in the late 1980s, Bates experienced first-hand the events surrounding the Tiananmen demonstrations, which seriously disrupted business with China, and reinforced the lesson that “one needs to be flexible and keep as many options open in one’s career as one can,” he says.

This flexibility landed him with a place at Tokyo University as a Fulbright Senior Professional Research Scholar, which allowed him to co-teach comparative international economic law; a difficult subject at the best of times, but doubly difficult when teaching (and grading student papers) in Japanese. Following his nine-month stint at Tokyo University in 1990, he joined the Tokyo office of Morrison & Foerster.

In 1992, he was recruited to GE’s medical systems business as general counsel for Asia, based in the plant in Hino, in western Tokyo, enabling him to draw on his cross-cultural experience in Chinese and Japanese law and business.  He spent a number of years traveling and growing the business in the region, including four years in Hong Kong. He then returned to Japan in 1998 on the heels of the “Big Bang” financial reform package instituted by then Prime Minister Ryutaro Hashimoto, when GE Capital started investing in the Japanese financial services sector.

Reflecting on his moves, he sees Tokyo as “the most exciting city in the world.” While some see the difficulties of living in Japan’s largest metropolis, he says that he relishes “peeling the layers of the onion to get to the real story,” which he sees as “a tremendously interesting and challenging part of the experience.” He adds with a laugh, “Maybe it’s the lawyer in me.”

The attention to detail and quality in the Japanese approach to things–whether in restaurants, shops, or the dedication of employees—is a major selling point for him that compensates for the occasional frustrations that inevitably come with living in a foreign culture.

“It’s been so long since I’ve felt the pangs of the newcomer to Japan,” he says. Yet he recognizes that some aspects of Japanese business and government culture can be difficult, such as the time needed to build consensus on the details of necessary changes. “Once a decision has been made, it goes forward beautifully with high-quality execution,” he adds. “But getting to the point where decisions are made can be the most frustrating part of the process.”

 

Change and the TPP

Bringing about positive change and arriving at decisions in Japan are linked to an underlying need for consensus. Accepting that this is simply part of Japan’s social fabric is part of working from within the system, instead of fighting against it. Although many criticize Japan as being a society which does not respond to change, Bates points out that in the time he has lived in the country many changes have taken place. He points to one area in particular where the ACCJ has helped to promote change.

“If I think back 20 years to when I first came here as a lawyer, it was almost impossible to participate in a government meeting,” he says. “The door wasn’t open.” Now it is possible for the ACCJ to talk and share ideas with members of the Diet (see Diet Doorknock in the November issue of the ACCJ Journal), civil servants and bureaucrats. Even if there isn’t, and never will be, perfect agreement, the Japanese government considers the ACCJ’s opinion.

In light of this shift, Bates is optimistic that there is a genuine desire for change within the political establishment. Such change, however, will require a significant degree of outreach between the different political parties and factions involved in governing Japan. The ACCJ is prepared to help with policy ideas, and ultimately with business success stories.

On the subject of the Trans-Pacific Partnership (TPP), Bates points out that “as the ACCJ, we think it would be very much in Japan’s interest to be a part of it. If Japan participated in the TPP, the GDP of the member countries would amount to around 40 percent of the world’s GDP.” He adds that if Japan were to join TPP, Japan and the US could work together to take the lead in shaping the international regulatory environment throughout the Asian region, creating a more competitive environment for both US and Japanese companies.

TPP is therefore not about forcing Japan to break down existing market barriers, although it may help to facilitate business in all participating countries.  At the moment, the EU and China increasingly influence global standards and regulations, such as those for privacy and IP protection. However, a set of standards backed by the US and Japan, which share many common interests, along with other TPP member countries, could provide a valid alternative.

“We in the ACCJ think that Japan really needs to step up to the plate if it sees that it is in its interests to do so and to be willing to negotiate on the same terms as all the other TPP participants,” Bates says. “I think that they will make the decision to do that at some point in the future.”

He adds that he thinks the government is ready to do all of this, even though various sectors have expressed concerns. “But that’s true of any country considering any significant trade agreement,” he adds, citing the initial reluctance of many in the US to join NAFTA as an example.

He makes an additional point. Embracing the TPP would be good not only for the major market players, but also for subcontractors and others in the supply chain. Although at first sight it may look as though the trade agreement is of benefit chiefly to the big names, Bates says that the whole economy would reap the rewards.