Nikkei (the Japan’s leading newspaper specialized in economy and politics) reported on September 21 that the new Japanese government established a new budgeting policy of practically implementing multiple-year appropriation from 2010.  The framework of the policy will be developed by a committed to be established within the National Strategy Bureau headed by Mr. Kan, and is planned to be submitted in the middle or end of October.  There would be no legislative problem in “practical” implementation of the new budgeting system.  There are three main budgeting revisions, all of which are designed to improve the effective use of budget.

First revision is practical implementation of multiple-year appropriation.  The long custom has been forcing to use up the budget for the fiscal year because of one-fiscal year budget system.  This system led to long-year custom of unnecessary road work performed only to use up the fiscal year budget so that the budget can be acquired the following fiscal year.  What the government is trying to do is implementing a multiple-year appropriation concept and framework of the U.K., that enables the remaining fiscal budget to be carried over to the following year.  In line with this, the government is also planning to establish a foundation and/or revising law(s).

Second revision is abolition of “ceiling” system that started in 1961 as budget request framework.  Currently each ministry requests budget by each related expenses such as public work projects and social security according to budgetary request guideline.  Instead, the National Strategy Bureau is to prioritize business.  The Bureau will compose revenue framework from sources including the government’s economic forecast, and business whose budget exceed this framework could be carried over to the following year.

Third revision is improving budget inspection system.  Currently Ministries of Finance and General Affairs and Board of Audit inspect the waste and validity of budget.  The inspection will be changed to politics-driven, and achievement progress of the numbers based on the policy set at the beginning of the fiscal year will be monitored.  And in the future, the government is to study to implement a system linking this inspection and monitoring with personnel evaluation of government officials.  An example is comparing number of prospect users of airport and roads before construction and the actual number of users after the construction, and should a big gap between the two be found, it would be reflected to the personnel evaluation of government officials concerned.

To the author, in short, the three revisions are implementing systems proliferating in many private companies.  In many companies, Corporate Planning or Business Plan Analysis department (equivalent to the National Strategy Bureau in the new government) prioritizes business and leads budgeting, although how the top-down and bottom-up are mixed depends on the company.  Mid-term and/or long-term strategy, road map and plan is developed first aligning with the company’s mission and vision, which is then broken down to annual business plan, and quarterly/monthly plan.  Performance is monitored regularly and together with the latest forecast, adjustment is made flexibly.  And usually MBO (Management by Objectives) is used, linking the goal of company/organization and individual, and reviewing what extent the team and individual target is achieved as well as processes (value & behaviour) of achievement.

The new budgeting system is a solving problem of root cause of such issue as the recent interdiction of additional appropriation for 2009 that do not contribute to business environment improvement.  The interdiction has triggered big debate and confusion which is not a surprise and its feasibility is question.  With the new revised budgeting system, this kind of issue should not occur.

The long-year systems and customs of public sector are unbelievable for people in the private sector.  The new policy and system may have negative impact on some industries and companies such as construction, but in general, it should have positive impact from total optimization perspective.  It is highly desired that the new policy is implemented without fail for effective use of budget and higher productivity of the government, meaning growth of the nation and better life of all citizens.

Nikkei reported on September 21 that the new Hatoyama Administration earnestly started to revise Postal Administration Business that former Koizumi Administration had been aggressively initiating, and it is clear that this would give direct and extreme impact on related industries/companies operating in Japan. 

Mr. Kamei, the new Minister of Posts and Telecommunications as well as Finance explicitly said his policy that bill of freezing selling stocks of Postal Administration Business will be submitted in the upcoming ad-hoc Diet to be held this autumn.  This means that the future direction of the business revision will be composed as “Fundamental Law of Postal Administration Business Reform”, including how divisional companies are to be formed and how the government is to hold stocks. 

Postal Administration Business of Japan, consisting of 4 businesses of post offices, postal business, banking/finance, and insurance, had been privatized in October 2008, and the selling of stocks held by the government is to start as soon as the latter half of 2010 and to complete in the end of September 2017 (government to remain holding 1/3 of stocks for post offices and postal business).  This was the biggest topic and initiative under Koizumi Administration.  It is because of this timeline that Mr. Kamei is in a hurry to submit the bill.  And the reason for freezing the selling of stocks is anxiety of maintaining post office network.  Post office management is dependent on banking/finance and insurance business because their revenue is generated from commission fee of contract business from the two businesses.  This means that if relationship in capital is abolished, it is possible that business contract is cancelled.  The new government is also to review services of postal administration business.

There are many possible options regarding how divisional companies are to be formed and how the government is to hold stocks, which are the discussion points in drafting the bill.  It may well take time to come to an optimum option with consensus with all related parties; in fact, it is not clear whether related parties can really discuss in detail to come to concrete action plan in limited time.  Having said that, what is quite possible is that the government is to invest 50%+ of stocks in order to maintain control of the management.

With the above, it is quite possible that freedom of Postal Administration management such as business alliance and starting new business shrinks, and it would become more difficult to a develop sustainable business model while successfully coordinating with industries that are to be directly impacted.  Such industries/companies are of course banking/finance, insurance, postal and telecommunication industries/companies, the most impacted being banking/finance industry/companies.  This is because the banking/finance branch network and business of Postal Administration is as big as the total of all Japanese major financial institutions of private sector, and although at present the limit of saving at Postal Administration banking/finance is 10 million yen (no limit for private sector) to control the power of Postal Administration.  However, government’s control over Postal Administration would imply unbalanced power between public sector of Postal Administration and private sector.  For this reason, successful coordination of competition requirements with private institutions would be the key. 

To the author, this issue is closely linked with the complicated issue of Mr. Nishikawa, who became the head of the privatized Postal Administration Business in October 2008, and whether he should resign or not had been a big issue, leading to resignation of Mr. Hatoyama, the former Minister of General Affairs (brother of the new Prime Minister), and still is under hot discussion by the new government members.  It is quite possible that the new policy intends also to solve this problem.

It is highly desired that the government drafts the policy and action plan that would lead to sustainable growth for all parties thus building Win-Win relationship with all related parties with fair process; i.e. through discussion and coordination with related parties.  The bill drafted with such process would surely be successfully passed in the ad-hoc Diet to become an official law, and executed smoothly.

The theme “Future Direction of Web 2.0. and Internet Marketing – Leveraging Social Media for Business Success” is, in a sense, consecutive study of the author’s MBA thesis titled “Concept and Maximization of Web Equity” submitted in March 2006.  The author decided to start this series of articles from her awareness and quest about recent Web 2.0 survey results and social media discussions on the web, with the objective of making an attempt to clarify her awareness and quest, and share with marketing professionals about Web 2.0 and social media issues and ideas as a base in discussion of ideas.

Background of setting this theme was the fact that organizations had realized then that ROI perspective, i.e. some kind of means to measure success of web building and management contributing to business is necessary.  Also, framework of customer equity measurement, and corporate and brand valuation had been developed, evolved and popularized, which triggered the emergence of the word “web equity” or concept of “value of an website” and there was (and still is) an Web Equity measurement model in Japan.  However, to the author, the model needed (still needs) much debate, and neither official definition of “web equity” nor indicator(s) linked to true financial return/economic value exists.

From studying sources about web measurement, web equity in the paper was defined as “the value of web service created and provided to online customers through web building and web site management”.

The conclusion of the entire thesis was that webmasters should not be swayed by the existing web equity measurement programme but assess the reliability of research reports.  They also must keep in mind that for web equity maximization for business success, they need to focus on aligning web management goal, strategy and measurement with those of the real world business, applying but tailoring traditional management and measurement framework, procedure and technique used in the real business.  It is such web management and measurement that contribute to web equity, brand of the organization and its products/services, and ultimately to corporate value enhancement. 

The series of articles is positioned as a discussion developed from the thesis, based on the above definition and conclusion.  Although the topic of the articles may not necessarily are included in the 5 directions for further research stated in the thesis, it has good relevance to the thesis.  It was explicitly mentioned that “stickiness” with rich content of the website is an important factor and that the future direction is community building to cultivate relationship with web users.  Actually, what the author had in mind was social media vehicles of today. 

Article on how Web 2.0 is used in companies and organization is to come next.

 Megumi Oyanagi

Today we have a general election for the lower house Japan, marking a historically meaningful day in Japan’s history, and this could well to be a good opportunity to think what it is to be happy and to be successful in our lives.

Unlike all other elections we had, many Japanese citizens including myself have been paying much interest in this election because the voices of each of us is possible to determine the leading party for this election, and change to improve the society which we live in. 

Improvement in the society we live in is a key element for all of us to be happy.  And we had been attentive to this election sincerely hoping that the new political measures under the new administration would change the fundaments are vital to solve pending issues including finance, economy, employment, pension, welfare, education, environment to name a few.  Solution to such issues would highly contribute to making us much happier.  But, what does it mean to be happy?  

Being happy is to be successful in one’s life, and success in one’s life is nearly equals to success in one’s career for most of us. 

Definition of “success” should be different for everyone because each of us is different.  We all have different value, belief, interest and uniqueness, and objectives/mission of our life and our lifework that we pursue as we go along in our life journey aligns with our value, belief, interest and uniqueness.  Having said that, the definition of success in life and to live happily can be summarized as “Unleashing one’s potential in one’s desirable environment to achieve tangible outcome one is happy with (not necessarily monetary), contributing to the organization, community and/or society one belongs to.” 

The key to succeed in life and live happily can be summarized as below.  

1) Physically and economically healthy: There are no argument on this, is there?   

2) Self branding: This is the starting point of defining your success, goal and mission in your life, and deciding what your lifework is.  Extensive self analysis is inevitable.  Strategy and brand management framework and approaches can be used, similarly to branding of a company or an entity. 

3) Networking: This is about being connected with people with whom you can learn and grow mutually.  Like brand, this is an intangible asset that is built on trust and requires time.  This is vital for self marketing and let the world know about you, who you are and so forth.  In today’s ubiquitous networking world, leveraging web 2.0 social media tools world really helps although face-to-face networking and conversation still plays an important role and you need to effectively mix and utilize them both. 

4) Work you enjoy and your happiest challenges: You should not be pushed aside by the work and challenges the general public highly evaluates but those you truly enjoy and means to you, aligning with your value and interest.  Base on personal branding and “career drift” concept, create your career and land on the role/position you really desire, the role/position that is meaningful to you, and engage in challenges you are happy with.  Challenges may not be what you had been doing nor what you are good at first but if you like them and are happy with them, you usually pick up the skills quickly.  Work you enjoy and happiest challenges lead to motivation, high performance and your growth. 

5) Desirable work environment with supportive boss(es) and cooperative colleagues: The definition of “desirable work environment” depends on the individual but for many people, the important points include clear mission and goal of the organization, open and interactive communication, simple processes and systems and chemistry/fitting with the organization’s culture.  Supportive bosses and cooperative colleagues creating a teamwork spirit usually comes with desirable work environment, which increases your motivation, an important driver along with your skills, competencies etc. (and perhaps the only driver that can be positive or negative) to maximize your performance and leverage organizational capability, leading to high performance of you as an individual and the organization you belong to. 

6) Work-life balance: Life is not only about career or work.  Positive effect outside work usually has positive effects on work leading to synergy. 

7) Understanding and cooperation from your family, and “true” friends: There are no argument on this, is there?  A friend in need is a friend indeed.    

After all, it is each of us that “own” our lives and career path.  Each of us is to strategically positioning ourselves in the world we live in and is responsible for creating our own lives and career.

There may well be room for addition and improvement.  Your comments are more than welcome.

Megumi Oyanagi