Nemawashi: The Art of Business Negotiation in Japan

Recently we marked the start of a new financial half-year at my company. Therefore, my colleagues and I began to make plans for the various activities we would undertake for the next six months. Such was the onset of the numerous series’ and drawn-out rounds of nemawashi - or groundwork negotiation - required before any plans can be finalized and then implemented.

Nemawashi literally means, “around the roots” and refers to an old process of digging around the base of a tree before transplanting it to new pastures. My dictionary lists the definition as “pulling strings” and in modern times nemawashi has come to refer to the process that is required to obtain buy-in and consensus from all related parties prior to the agreement of a business plan or activity.

Nemawashi is extremely important in Japan in order to preserve the notion of group consensus. Plans and/or activities that are proposed without appropriate nemawashi are often vetoed; usually, by parties offended that they had not been approached or included in the decision-making process. Thus resumes the laborious cycle of negotiation.

Prior to these negotiations, I usually start by pulling together all of the relevant statistical data to back up my proposal. In addition, I couple the data with factors of seasonality, and knowledge of how our customers act/behave when purchasing our product. From this, a plan that I hope to implement over the next three to six months is created.

As this plan is built, I must constantly include my colleagues, and ask for their feedback to ensure that the plan will be accepted. Once I have the agreement of my team, we then start to meet with the many stakeholders that will be included in the decision making process, and slowly gain their feedback and approval as well. If someone disagrees or objects, their concerns are heard, and the plan is modified to incorporate their ideas so a compromise can be reached.

What makes this procedure different from other planning processes is that the final decision is consistently made by the group consensus. In many other countries, a plan is put together and feedback is gained, but final approval rests with a senior management team or committee. Thus the lobbying for approval is concentrated on one or two senior executives rather than a much wider consensus, as is the case in Japan.

On one hand I can see the merits of obtaining feedback and ensuring buy in from colleagues and all stakeholders in the plan or project. This ensures that once the details have been agreed upon, the implementation will generally run very smoothly. As all parties are in agreement, it also removes any dissention from the course of agreed action. On the down side, the process of nemawashi is extremely time consuming. The meetings I am involved in take upwards of two hours each time, and are generally drawn out over several weeks, resulting in what would be considered delays in execution to an inexperienced observer.

However, because of the importance of the group in Japanese society, this nemawashi process is critical to preserving harmony, and ensuring accord. Despite its time consuming nature, I am glad to have learned this important new skill in doing business in Japan, and I am sure the understanding of this complex process will serve me well in the future.