While the advantages and disadvantages of leadership styles are not always readily apparent, one thing is certain – being decisive while avoiding autocratic leadership tactics is necessary for successful leaders and negotiators alike. Navigating these treacherous waters can be extraordinarily challenging, but it can also give rise to creative decisions that help resolve disagreements in unexpected ways. Few people balance these potential risks and rewards more than political leaders. There is a lot that can be observed about their leadership styles.
Japanese Prime Minister Shinzo Abe intervened in a dispute between business leaders and workers in ways that are of interest to anyone who hopes to manage disputes between parties without causing more trouble than good.
Abe was re-elected as Prime Minister of Japan in 2012 on the promise of reviving Japan’s long-stagnant economy. At first, his efforts seemed to pay off. Abe pumped a sizable stimulus package through the Bank of Japan and extended that stimulus to Japanese businesses.
Advantages and Disadvantages of Leadership Styles – Shinzo Abe Revives Traditional Negotiating Styles and Negotiation Tactics in Japan
A year later in 2013, the results were largely positive. The economy was growing and the value of the Yen began to drop. Higher production in the economy created increased demand for workers, and Abe took the opportunity to implement the final pillar of his reforms – a 3% tax on consumer purchases. That’s when everything fell apart.
The consumer tax revealed that decades of stagnant wages had brought many Japanese workers to the brink of financial ruin. Consumer spending fell precipitously. As the economy quickly slipped back into the red, large corporations continued to turn profits on a combination of exports and government support. Meanwhile, newly taxed workers turned to the Prime Minister for answers. To save the day, Abe turned to a spring negotiation ritual called Shunto.
In the decades following World War II, Shunto signaled the start of yearly salary talks between business and labor leaders, often carried out against the backdrop of nationwide labor protests. The Japanese economic boom of the 1980s turned the tables, however, and in recent decades the declining influence of unions reduced Shunto to a mere formality.
Abe signaled that this year would be different.
Hoping to boost public spending, Abe made it clear that the year’s Shunto should lead to measurable increases in spending on wages. Despite concerns that his intervention would be seen as an autocratic leadership tactic, Abe succeeded in getting a handful of major corporations to commit to increased wages. Within two months, his choice to join the Shunto did prove to bear fruit.
Advantages and Disadvantages of Leadership Styles – Negotiation Strategies from Japanese Shunto
Of the many valuable takeaways from Abe’s revival of the Shunto negotiations, a handful are important for any leader hoping to expand value in a challenging deal.
1. You don’t have to reinvent the wheel – Shunto may have lost some vigor over the years, but it has long-standing cultural value for workers and businesses alike. Rather than inventing a new process, it can be beneficial to rely on existing ones and the pre-existing understandings they create.
2. Identify your audience – Abe wants businesses to thrive, but also needs the support of all citizens. Picking the right forum to back workers shapes the negotiation and signals an awareness of shared valued to a larger constituency.
3. Set reasonable expectations – Abe saw the need to join this Shunto, but will lose the support of businesses if he does it every year. Instead, the Prime Minister’s representatives took pains to emphasize the fact that they won’t be showing up to Shunto in the years to come, and likely got more value out of the negotiation by doing so.
4. Get concessions that lead to concessions – The largest stakeholder to commit to raising wages is Toyota. Outside observers credit the car giant’s concession as a watershed moment that led many other companies to follow suit. In a complex negotiation with many stakeholders, getting a leader on one side to make a concession can enhance the chances of a deal by strengthening coalitions and lessening fear.
5. Let the parties define their own concessions – Abe would have fulfilled accusations of autocratic leadership if he had demanded compliance with specific wages. Instead, he encouraged concessions, but avoided too many specifics, allowing individual companies the opportunity to negotiate a range of issues with workers.
6. Keep your celebrations to yourself – A hard-fought win in a negotiation can seem like just cause for a victory lap, but Abe avoided rhetoric that might embarrass business leaders. In any business, the chances are high that you will find yourself negotiating with a former adversary some time down the road. So is the likelihood that you’ll need a counterpart’s support away from the table. A win should feel good, but don’t delight publicly in your counterpart’s loss.
What is your leadership style? Let us know in the comments.
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Originally published in 2015.