Illustration of a man blowing up an inflated balloon with a yen symbol on it while a large hand holding a pin prepares to cause the economic bubble burst
iStock/wenmei Zhou

Influencer Marketing

Expand your reach and engage with your target audience using this trending technique that blends celebrity endorsements with social media marketing.

Leading High Performing Remote Teams

How can leaders ensure that performance remains high in remote or hybrid-work environments?

Design Thinking

Learn the 5 phases of this problem-solving methodology and switch from technology-centered to user-centered thinking.

Reciprocity

Learn what reciprocity is and how it can motivate people and boost sales.

Gantt Chart

Invented in the early 20th century, the Gantt Chart is one of the building blocks of modern project management. In this online course, you'll learn how this tool can be used effectively to monitor progress and achieve your team's goals.

Navigating Change Successfully

The working landscape is continually shifting and being disrupted, so how to employees maintain a sense of stability? Listen to CEO and president of Carl ZEISS Japan Stefan Sacre share his expertise on dealing with change in organizations and entire industries.

Halo Effect

The halo effect is often leveraged for marketing and promotion. But as a type of cognitive bias, it can also have a subconscious impact on decision-making in the workplace. Learn why and (how to overcome it) in this online course.

Anchoring and Framing

Want to increase your confidence during negotiations? Master the principles of anchoring and framing to take your negotiation skills to the next level.

ZOPA and BATNA

Understanding ZOPA and BATNA will help you become a better negotiator, create more value, and feel more confident at the table.

Content Marketing

In this course, you’ll learn how compelling blogs, videos, podcasts, and other media can reach customers and drive sales. You’ll also learn steps for creating an effective content marketing plan, and some important ways to measure its impact and success.

Content marketing is a essential digital marketing strategy for companies looking to provide relevant and useful information to support your community and attract new customers.

Get started on your content marketing journey today.

Sustainable Innovation in Times of Disruption: Choices for a Better Society

There are opportunities for progress all around us. The key is to innovate on these opportunities sustainably.

To help identify most effective path forward, you'll need to gain a global perspective to these challenges in an open discussion. How can Japan and the world take action to create a more sustainable, innovative world? Where do you fit in?

It's time to find out.

Social Media & Digital Communications: Impact on Global Public Opinion

Social and digital media have dominated the communications industry for decades. But it's no secret that social media has the power to sway public opinion, and the way in which many companies use these platforms could be seen as manipulative.

What do companies need to be aware of when utilizing social and digital media? How can these mediums be used to better communicate strategically with the world?

Discover what top media and communications experts have to say.

Blockchain

Blockchain is one of the most captivating technologies out there. Learn what it is and how to make use of its opportunities in this short online course.

Mehrabian’s Rule

The 7-38-55 Rule, developed by Albert Mehrabian, suggests that effective communication relies less on the words we choose than on our tone of our voice, appearance, and body language. Learn how to put this theory to use for better communication in business.

Pareto Principle

Your time and resources are limited. Efficiency means learning to prioritize. The Pareto principle (also called the 80-20 rule) can help you identify the best way to use your time for maximum results.

Country Analysis Framework

Overseas expansion requires careful planning. The Country Analysis Framework can help you look beyond an industry-level analysis and reframe your view based on performance, strategy, and context. Try this short course to learn how it works.

SECI Model

The SECI model illustrates how knowledge is created and shared. Learn how to put it to use for best practices, and how the Japanese concept of “ba” fits in to broaden your perspective.

Johari Window Model

The Johari Window Model is a self-awareness framework that helps you better understand . . . you. Learn how its four quadrants can help you identify gaps between how you see yourself, and how others see you.

Sunk Costs

Wondering if you should continue an investment or look for something new? Sunk costs can have a powerful psychological impact on decision-making. Learn how to recognize them to ensure rational decisions.

CAGE Distance Framework

Want to expand overseas? The CAGE distance framework can help ensure you're constructing a solid global strategy in four areas: cultural, administrative, economic, and geographic. Learn how to leverage useful differences between countries, identify potential obstacles, and achieve global business success.

Groupthink

Groupthink refers to group pressure and the perception of consensus which together lead to ill-formed decisions—or even unnecessary risks. Learn to identify the warning signs of groupthink and apply countermeasures in this online course.

Deductive and Inductive Reasoning

Solving problems with the best results means using two types of thinking: deductive and inductive reasoning. In this online course, learn to form a broad premise, make observations, and form conclusions from different perspectives.

Critical Thinking: Hypothesis-Driven Thinking

Anyone can come up with a good idea. The real challenge is putting that idea into action. In this online course, explore how to form compelling, testable hypotheses and bring ideas to life in your own organization.

Critical Thinking: Structured Reasoning

Even a few simple techniques for logical decision making and persuasion can vastly improve your skills as a leader. Explore how critical thinking can help you evaluate complex business problems, reduce bias, and devise effective solutions.

Critical Thinking: Problem-Solving

Problem-solving is a central business skill, and yet it's the one many people struggle with most. This course will show you how to apply critical thinking techniques to common business examples, avoid misunderstandings, and get at the root of any problem.

How to Dream

Join globally renowned author and Columbia Business School professor Dr. Sheena Iyengar as she explains how to approach your dreams with a new perspective. Learn to reflect on what you long to accomplish and what stands in your way.

Logical Thinking

Logical thinking is at the heart of confident, persuasive decisions. This course will equip you with a five-point approach to more becoming a more logical thinker. Learn to classify ideas and distinguish fact from opinion.

Investing & Diversity: The Changing Faces of Venture Capitalists

Is the venture capital industry embracing diversity in investors? Watch global venture capitalists from around the world discuss the state of things and what needs to be done for a more inclusive future.

Servant Leadership

There's more to leadership than driving a team to profit. In fact, there's a word for looking beyond self-interest to prioritize individual growth: servant leadership. Try this course for a quick breakdown of what that is, how it works, and how it can lead to organizational success.

Organizational Behavior and Leadership

Ever wonder what makes a great leader? Whether your role requires leadership or not, understanding organizational behavior is useful for your career. This course from GLOBIS Unlimited can set you on your way.

Leadership vs. Management

Leadership and management are different skills, but today’s leaders must have both. Try out this course from GLOBIS Unlimited to understand the difference, as well as when and why each skill is necessary for motivation, communication, and value.

Strategy: Creating Value Inside Your Company

Have you ever wondered why certain companies are more successful than others? The answer is strategy: internal processes that control costs, allocate resources, and create value. This course from GLOBIS Unlimited can give you the tools you need for that strategic edge.

Strategy: Understanding the External Environment

To plan strategy on any level, you need to understand your company's external environment. In fact, your level of understanding can impact hiring, budgeting, marketing, or nearly any other part of the business world. Want to learn how to do all that? This course from GLOBIS Unlimited is the perfect first step!

Using Japanese Values to Thrive in Global Business

Japanese companies have unique cultural, communication, and operational challenges. But they also have values that have led to remarkable longevity. Check out this seminar to hear how these values help earn trust from overseas head offices and develop employees.

Turnaround Leadership: The Differences Between Japan and the West

What's the best way for leaders to communicate a shift in corporate strategy? How do you even know when it's time for such a change? This course explains how Japan might have one answer, Western companies another.

Conflict Management

Conflicts in the workplace are inevitable. But they can lead to positive outcomes if they’re managed well. Check out this online course for a two-step process that can help you manage conflict successfully.

Evernote Founder: How Tech Startups Can Break through in Japan

Can startup models from Hollywood and Silicon Valley succeed anywhere? Phil Libin, cofounder and CEO of startup incubator All Turtles, explains how AI can solve everyday problems to bring products to market.

Women Empowerment: Lessons from Cartier

How can women overcome gender inequality and reach their leadership goals? Cartier Japan CEO June Miyachi shares her secret in this special course from GLOBIS Unlimited.

Marketing: Reaching Your Target

Every company works hard to get its products into the hands of customers. Are you doing everything you can to compete? In this course, you’ll find a winning formula to turn a product idea into real sales. Follow along through the fundamentals of the marketing mix and see how companies successfully bring products to market.

Marketing Mix

Seeing good products into the hands of customers is no easy task. The marketing mix can help. It's a collection of strategies and tactics companies utilize to get customers to purchase their products or services, and is an essential part of the overall marketing process.

The Principles of Negotiation

With the proper skills and attitude, anyone can become a successful negotiator.  But first, you'll need to learn the basics to prepare for, assess, and respond to offers for the best results. GLOBIS Unlimited can help.

Negotiation: Creating Value

Want to create more shared value between yourself and your negotiation opponent? Discover how cognitive bias affects the judgment of others. Try this course from GLOBIS Unlimited to master the value of negotiation.

Finding Your Life Purpose with Ikigai

Ikigai can guide you in your quest for self-discovery. Listen to Japanese brain scientist Ken Mogi explain why and how.

Maslow’s Hierarchy of Needs

Want to leverage Maslow's Hierarchy of Needs as a leader? Try this short course to see how the theory can be applied in practical work scenarios.

Confirmation Bias

We all subconsciously collect information that reinforces our preconceptions. It's natural . . . but it does lead to a kind of flawed decision-making called confirmation bias. To become more objective and impartial, check out this course from GLOBIS Unlimited!

An Investor's Lesson to Entrepreneurs

Entrepreneurs have the power to transform societies for the better. But how do you attract investors to start or grow a business? Or to sell one? Check out this seminar for the answers to these and more, straight from a master venture capitalist!

Managerial Accounting

Managerial accounting is a powerful way to measure progress, identify problems, and meet your goals. Check out this course to learn how data-backed decisions can help you run your business.

Finance Basics: 1

For a healthy mix of quantitative planning, evaluation, and management, you need solid decision-making. And finance is the secret sauce! Get the essentials of finance in this two-part course from GLOBIS Unlimited.

Basic Accounting: Financial Analysis

Want to compare your performance vs. a competitor? Or evaluate a potential vendor? Then you'll need to conduct a financial analysis. This course will teach you how to use three financial statements and evaluate financial performance in terms of profitability, efficiency, soundness, growth, and overall strength.

Career Anchors

What drives you to be good at your job?

Career anchors are based on your values, desires, motivations, and abilities. They are the immovable parts of your professional self-image that guide you throughout your career journey.

Try this short GLOBIS Unlimited course to identify which of the eight career anchors is yours!

Digital Marketing Psychology to Transform Your Business

How does digital marketing really differ from traditional marketing? How is social media changing things really? And what's going on in Asia?

Pyramid Structure

Having the pyramid structure in your communication toolkit can not only help you approach a problem, but convince others that your solution is valid. Break away from linear thinking and test your logical thinking with this course from GLOBIS Unlimited!

Leadership with Passion through Kokorozashi

The key ingredient to success? Passion.

Finding your kokorozashi will unify your passions and skills to create positive change in society. This GLOBIS Unlimited course will help you develop the values and lifelong goals you need to become a strong, passion-driven leader.

AI First Companies – Implementation and Impact

AI is changing the way companies operate. How do you structure teams to increase efficiency?

Technovate in the Era of Industry 4.0

Is Industry 4.0 is the next step of human evolution human civilization? Dr. Jorge Calvo seems to think so. Join him to learn how the past can help you set goals for an exciting future of digital innovation.

Technovate Thinking

Business leaders of tomorrow need to harness the power of technology and innovation. That means understanding algorithms and how they drive business results. Discover opportunities to make technology work for your competitive edge.

Product Life Cycle

Every product takes a natural course through the market—there's a how, when, and why customers adopt products at different stages. Check out this course from GLOBIS Unlimited to find out how a product you use every day is part of this cycle.

Logic Tree

Logical thinking is the most valuable asset any business professional can have. That's why logic trees are such a valuable tool—they can help you identify a problem, break it down, and build it back up to a solution.

MECE Principle

Using the MECE principle can help ensure you categorize without gaps or overlaps. Check out this course from GLOBIS Unlimited for a practical demonstration of how it works!

Recently, American and European newspapers and other media have been discussing whether the West will face a “lost decade” similar to the one Japan experienced after the economic bubble burst.

My question is, “Was the lost decade really lost?”

Conditions leading up to Japan’s economic collapse in the 90s were different than those leading up to the recent bursting of the sub-prime bubble, the consequence of which Western countries are now facing. So there is no simple comparison.

But there are things Japan’s experience can teach the West.

What is an economic bubble burst?

An economic bubble burst is often explained as a rapid surge in asset prices, including stocks and real estate, as a result of excessive liquidity and a frenzy of stock market speculation. Falling asset prices lead to a credit crunch, deflated assets, and stagnating consumption.

While this explanation may be accurate in terms of economic theory, it does not take human factors into consideration. Those who have studied economics, however, are more inclined to view this field in terms of numbers and models. I, along with other company leaders, tend to view economics as a combination of human psychology and human behavior. Because we’ve studied management, we put people front and center. This doesn’t imply that one view is better than the other, but only that people have different approaches.

Next Article

Bankruptcy Pros and Cons: A Shameless Perspective

It’s time to take the shame out of business bankruptcies. What are the pros and cons of bankruptcy for a company, and where do opportunities for recovery lie?
Businessman at an empty boardroom table holds his head in his hands in shame over bankruptcy

The Circular Economy, Your Business, and Your Future

The circular economy is a sustainability model that balances material needs with impact on the planet.
Illustration demonstrating the many facets of the circular economy

Jesper Koll: Why You Should be Optimistic About Japan’s Economy

Jesper Koll, often hailed as "Japan's eternal optimist," shares why he (and everyone) should be optimistic about the Japanese economy in 2018.

What happened with Japan’s economic bubble (from a manager’s perspective)?

So here’s what happened with Japan’s bubble, from my managerial perspective: First, errors in management gave rise to the bubble. Eventually, the economic bubble burst. Then the “lost decade” that rolled in after the bubble burst wasn’t really lost at all, but was actually ten years of learning for strategic and structural reform.

What were those “errors in management” that caused Japan’s bubble to happen? In my view, there were three:

  1. Money management was conducted without any concept of the cost of capital.
  2. Excessive capital investments were based on overconfidence in the continued growth of the market.
  3. There was no concept of strategy, which lead to lockstep management.

This may sound harsh, but the bubble itself was entirely the result of the ignorance of management. Naturally, the companies led by ignorant managers went bankrupt or merged. Most are no longer around today. And those that survived? Their management teams and shareholders have entirely changed.

Money Management

During the time of the economic bubble burst, money managemet was conducted without any concept of the cost of capital. I still clearly remember an article from the Nihon Keizai Shimbun stating that equity finance was cheap because it only required the cost for dividend yields with no obligation to pay back the money—as if that was simply how things worked. What’s worse, it seemed most managers in Japan back then believed this to be true. This is why they repeatedly engaged in “cheap” equity financing and took on as much “debt” as possible. These managers then used their funds to invest in stocks, bonds, and real estate, as well as excessive capital investment and the purchase of overseas companies.

They called it “money management.”

I began my studies at Harvard Business School in September 1989, at the peak of the bubble. At the beginning of the finance class for first-year students, I was taught the concept of the cost of capital. I learned that equity finance costs more than debt finance. Stock prices will fall unless a company produces a higher return than the cost of shareholder equity.

The moment I learned this, I predicted that Japan’s stock market was doomed to go into a tailspin. Newspapers—respected newspapers!—in Japan were writing about “cheap” equity finance, and the public perception believed in it, as well. Managers didn’t question the model, and as they pursued it, the ROE of Japanese companies plunged. In addition, as profits per share dropped, a stock price correction kicked in, and the Japanese economic bubble burst was primed and ready.

All because of bad management.

Excessive Capital Investments

The excessive capital investments that contributed to the bubble, too, came down to poor management. In particular, overconfidence. Japanese managers were convinced there would be continued growth of the market.

That hubris came crashing down in a harsh reality when the economic bubble burst.

No Concept of Strategy

No concept of strategy led to lockstep management. Lockstep management is, essentially, a rigid seniority system in which salaries and bonuses are based on seniority. This was only found in Japanese companies at the time. When Professor Michael Porter came to Japan, he often used the term “rat race,” saying Japanese electronics makers were all following the same strategy. Hitachi, Toshiba, and Panasonic were no exception. So despite high sales, their profit ratios were extremely low.

In short, managers all across Japan had no concept of money management and were investing left and right, believing they could do no wrong. And because lockstep management allowed them unquestioning trust, there was really no stopping Japan’s economic bubble from bursting.

What happened during Japan’s lost decade?

Japan’s economic bubble burst early in 1992. What have Japanese companies done in the decade following this collapse?

They have been single-minded in their pursuit of learning.

During my studies overseas in the last years of the bubble, other Japanese nationals would often ask why I was studying in the States. They believed there was nothing to learn from America anymore and there would be no point in getting an MBA. But after the bubble burst, Japanese companies reflected on the road to the collapse and quickly dove back into learning the latest in business administration.

GLOBIS was established in 1992—just after the bubble burst. I still vividly recall how surprised I was that we were providing training for a leading bank at the time. The bank simply had no concept of cash flow or IRR.

What lessons did Japan learn after the bubble burst?

Today, concepts such as the cost of capital, cash flow, and strategy have spread throughout many companies. I believe GLOBIS’s corporate training program, school, and publication business, including the GLOBIS MBA Series, have somewhat contributed to this change.

Japanese Money Management Today

Japanese companies have completely shifted their management style to enhance ROE. Furthermore, they have reinforced their capital base and reduced unnecessary debt. Currently, a couple dozen top Japanese companies collectively maintain more than 40 trillion in cash.

Japanese Capital Investment Today

Japanese companies have established a flexible production system that allows them to adjust capacity by disposing of superannuated equipment and eliminating waste and work overloads (both personnel and equipment). In short, these businesses have carefully strengthened their facilities and equipment. This cautious stance was sometimes criticized in a world after the Japanese economic bubble burst, but they steadily moved forward, one step at a time.

Japanese Strategy Today

To escape the rat race, companies have implemented a select-and-focus approach. Electronics manufacturers have withdrawn from dynamic random access memory (DRAM) production and other areas and sold off or streamlined business units. They have worked to narrow business operations to fields they can dominate, even among global competition. Things have changed.

What can global bubbles learn from Japan’s bubble?

Ten years have passed since Japan’s economic bubble burst, and now the sub-prime bubble has burst in the U.S. Maybe it’s time for American, European, Chinese, and Indian companies to reflect and learn. Chinese companies, in particular, are sure to face aftershocks from the excessive capital investment made under the assumption that markets would continue to grow. In addition, European and American financial institutions and companies will have to pay for enhancing—to an extreme degree—capital efficiency through leveraged financing.

During the lost decade (if you really want to call it that), Japan single-mindedly continued to learn. Companies here made a sustained effort to improve strategy and structure. I’ve seen it. Corporate training for leading Japanese companies accounts for more than half of GLOBIS’s sales. Lecturers and staff from our corporate education division have dedicated their efforts to developing human resources for businesses in Japan, including foreign-owned companies.

The Japanese economy may slow down again, but Japanese companies will remain relatively strong. It is said that Toyota faces a drop in profits of more than 70%, but the company is still generating 500 billion in profit. On the other hand, most Western companies (particularly American ones) are projected to be in the red.

The best thing any company can do facing these circumstances is learn. Japan didn’t understand the importance of this until its economic bubble burst. Other countries and companies can surely learn from our mistake.

What should Japanese companies do now?

Japan, too, should continue to relentlessly pursue learning and steadfastly improve strategies and structures. Personnel who are able to play an active role globally will be in particularly high demand in the future. This is a time in which Japanese companies can also purchase foreign businesses at bargain prices. Japanese companies can recruit. Sufficient funds are available. All that is needed is human resources.

What I learned after the Japanese bubble burst was this: at the end of a crisis, strong companies become stronger, and weak companies die out.

Strong companies are relentless in their efforts. They nurture human resources, maintain strong organizational cultures, and focus on their core businesses to confidently achieve success. A positive economic cycle for the future starts with the development of human resources.

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