Product, sales, organization: why this order

Most companies set up their Japan team before they know what it will sell. That is the order I try hardest to reverse.

In the first months of a new Japan entity, the question from headquarters is usually "how many people have you hired?" Almost nobody asks what we are selling in Japan, to whom, and through whom.

Hire before those questions have answers, and the new people have to find the answers themselves. If they do, you got lucky. If they don't, someone leaves after a year and the same job ad goes back up.

The overview page gives the order: two maps, then product, sales and organization, then the pay and grading systems last. This page takes the middle three apart. What each one decides, and what happens when you skip it.

Product: what Japan will ask you to change

The product step decides what to sell. Using the facts from the two maps, you pick which face of the product leads in Japan and what you leave alone for now.

Headquarters tends to think the product is finished and only needs shipping. Japan almost always hands back a list.

I have yet to see a headquarters that sized that list correctly at the start.

Localization also means more than translating the screens. Japanese customers want to configure the workflow to match how they already work. Let the Japan team own that layer, or every request waits in the head-office queue.

There is an order inside this step too. Sell replacement first, change second. If the customer already uses something, show how cheap and low-risk the switch is. The value of changing how they work can wait until they are using you. I went into this in 80% of Japanese companies use the cloud, but for what.

Skip this step and the result looks the same everywhere. The Japan team turns into a relay for customer complaints. Headquarters thinks Japan asks for too much, and Japan thinks headquarters doesn't listen. Nobody is really at fault. The list just never got written down at the start.

What this step hands to the organization is one sentence. Someone in the Japan entity needs the authority to say: this is a blocker, and we can't sell without fixing it.

Sales: pick the customer tier first

Sales is about how to sell. My first question is which tier of customer you are selling to, because the channel follows the tier.

More than 99% of Japanese companies are small or mid-sized, and each tier is reached in a different way.

Choose the tier, then work out what it costs to reach one customer in it. For the first two years I suggest picking one tier only. More in Who do you sell to?

Direct or through resellers is the biggest fork in this step.

What I usually do is run both with a clear split. Resellers build volume. Your own direct team wins two or three reference customers. Producing those public references is a sales job. I don't hand it to marketing. Why resellers often don't sell your product is a separate piece: Why your distributor isn't selling.

Skip this step and you tend to get both channels half built. The resellers feel you are poaching their customers, and the direct team feels the resellers are dragging their feet.

Pricing is where I don't have a finished method yet, but one rule holds: headquarters sets the price floor and Japan negotiates above it. Below the floor, write four things down in year one. Who can approve how much discount, with sales, the Japan head and headquarters each holding one band and anything beyond going through a process rather than a private phone call. Commission calculated on the discounted amount, and on margin if you can. The reseller's margin reserved on the price list from the start. How far ahead a price change is announced, worked back from the customer's budget cycle rather than your own fiscal year. How your price band decides which kind of salesperson to hire is covered in Your Price Decides What Kind of Sales Team You Need.

Organization: draw the authority line before counting heads

Only at the organization step does the question become who sells, and how you judge whether they did well. Clients usually ask first how many people they need. I ask first what Japan is allowed to decide.

My split looks like this.

If that line isn't written down, you can't answer the last question Japanese candidates ask in interviews. What can the Japan side actually decide?

Skip this step and the head of the Japan entity can't make decisions. Good people notice that quickly, and they don't stay.

Evaluation follows from the first two steps. Avoid activity metrics as KPIs in year one. Calls made and visits logged can grow without creating any value. Use milestones instead: how many channel partners signed, whether the first public customer reference exists, whether the service commitment has been met several months in a row.

How I diagnose an organization and assess people is on Four layers and Fit check. Grades and pay are on Three-track pay.

The bill for doing it backwards

The usual backwards version starts with the organization. Hire a country manager first, or two salespeople to test the water. I understand why. Hiring is visible, it feels like progress, and it is easy to report to headquarters.

The trouble is that you are using an organizational move to answer a question the maps and the product should have answered. The new people find that nobody has decided what to sell or to whom, so they decide while selling. If the direction they land on doesn't fit their background, they leave. Replacing the head of a Japan entity usually takes six to twelve months, and the Japan business mostly stands still in the meantime.

Each step uses the answer from the one before it. Skip ahead and every later step is catching up.

Still a work in progress

Of the three steps, product and sales are the least finished parts of my method. What I wrote here is what kept coming up across the launches I have worked on. It isn't yet a procedure you can follow as is. Where to draw the price bands and how wide each discount band should be, the rhythm of sales activity and how to break sales into roles are all still unwritten. When a project runs well enough to show me the answer, this page will change.

The next page applies the order to a Japan entity that has nothing yet: Building a Japan entity from zero. Or go back to the overview.