What the U.S. Can Learn from Uniqlo

Rich country, rising unemployment, sluggish growth, big debts. Sound familiar? Japan’s notorious “lost decade,” the long stretch of economic stagnation that followed its massive property bubble in the late 1980s, looms large in the American mindset today. A lot of people think we may be headed down the same path.
The parallels between what happened to Japan and what’s happening to the U.S. have inspired a flurry of teaching points on what not to do next. The latest come from Tadashi Yanai, the mastermind behind Uniqlo, the discount Japanese clothing brand whose stores have spread across the globe like wildfire at a time when Japan’s economy and many Japanese companies are staring into the abyss. In the latest McKinsey Quarterly, Yanai focuses on what still struggling Japan can learn from Uniqlo’s success. But a lot of those lessons can also be applied to the U.S. Here’s a sampling of what Yanai has to offer: 

1. Don’t look down on developing countries 
Japanese companies seem to have their eyes in the rearview mirror. They have become introspective. I   think we should get back to something more like we were at the end of the war when Japan rose to prominence from a situation in which it had nothing. (It was during this period that Fast Retailing got started, in 1949.)

We’ve lost that spirit, maybe because we are under the illusion that we are rich and superior. But many countries are just as rich, and in Japan, income has stagnated for many people for a decade or more. Japan is still very comfortable to live in, if you are Japanese. But there’s a difference between being comfortable and being viable. We are gradually losing our viability.

 2. Leadership means working the global sales floor
One thing Japan has to get rid of is the idea that things are one way here and different everywhere else. The Japanese are really strong at home, and incredibly weak away from home. We need Japanese who are strong away, or who don’t distinguish between home and away. We’re trying to build this idea into Uniqlo’s culture. For example, English is spoken at business meetings with foreigners, and we want all emails to be in English in a few years…

My advice for young Japanese is simple: get out of Japan. One of our weaknesses as Japanese is our ineptness at communicating with other cultures. Even people who speak English well are closed off psychologically. They don’t speak frankly like I do. There’s this uniquely Japanese standoffishness, this hesitancy to become too involved. And it’s detrimental to globalization.

3. Don’t work backwards
We saw food distribution as a backward sector, so we went into partnership with a food group, Ryokuken, in 2002. But vegetables are not an industrial product; you don’t know exactly when they will be ready or in what volume. We eventually understood that it would be impossible to succeed unless we ran our own farms, and we did not want to be farmers. After two years, we shut operations down.

4. Don’t give up your national identity
We opened our first store outside Japan in 2001, in London. And we failed spectacularly. We quickly opened 21 outlets in Britain—and shut down 16 of them by 2003. In retrospect, that was probably good, because we learned so much. Our big mistake was to try to do things the British way. We never capitalized on our strengths…

All this sounds pessimistic, but I don’t see this as the counsel of despair. Japan has everything—people, goods, money, technology, information. As a nation, we are honest, hard-working and serious…

Even if we experience failure, we can pick ourselves up and try again. That’s what Uniqlo did—and that is what Japan can do…

Written by Roya Wolverson , please go to Time magazine to read the whole article.