JSR’s Eric Johnson: ‘I encourage folks to inform me precisely how they assume’

When Eric Johnson took over on the helm of main semiconductor provider JSR three years in the past, he deliberate to separate his time between his native US and the corporate’s Tokyo headquarters. The purpose was to construct on his expertise of him working its US operations to develop the group’s world footprint.

However the subsequent three years would drastically change these plans.

Solely weeks into his job, amid a row with Seoul, Japan banned exports to South Korea of ​​photoresists, the skinny layers of fabric used to switch circuit patterns on to semiconductor wafers. Johnson’s JSR is the highest world provider of the fabric: it has as much as 40 per cent of the market, which is predicted to be value $ 14.2bn by 2029. Its shoppers vary from Samsung to Taiwan’s TSMC, the world’s largest contract chipmaker.

Johnson says he used JSR’s “world infrastructure” to navigate the dispute between South Korea, the place the corporate has huge clients, and Tokyo, “with out working afoul of any of the considerations from the Japanese authorities”.

Then in 2020 the beginning of the pandemic threw world provide chains into disarray, resulting in delays within the manufacturing of digital items. Johnson was grounded in Tokyo.

However probably essentially the most tough process going through him was coping with the corporate’s authentic elastomer enterprise, targeted on making artificial rubber for tires. It had stopped being aggressive, however continued to eat up sources which have been wanted for the capital-intensive semiconductor operations.

“We could not feed all of these companies correctly,” says Johnson at JSR’s headquarters in central Tokyo. He holds a big, spherical silicon wafer in entrance of him and his face di lui lights up as he explains the engineering behind the most recent semiconductor expertise. “But additionally by way of the organisational mindset, you may see two divergent cultures. And in administration focus there have been two various kinds of companies occurring, ”he provides, evaluating the principally home, slow-growth rubber enterprise with higher-growth world segments involving semiconductor supplies and biomedical units.

Shedding a enterprise on which any firm had been constructed wouldn’t be simple in any nation. However getting it carried out in Japan – by a foreigner in the course of pandemic-induced semiconductor mayhem – was certain to throw up huge challenges, from potential resistance from employees to opposition from clients and shareholders.

Even with out these pressures, international executives haven’t all the time had a simple run in Japan. Examples vary from Nissan’s Carlos Ghosn and his notorious escape from the nation in a field, to extra lately some senior American and British executives on the brokerage SMBC Nikko who’ve been accused of market manipulation. However proper from the beginning, Johnson performed down any concept that being a foreigner was a think about his management di lui.

“There’s typically an assumption {that a} non-Japanese CEO is introduced in to disrupt a corporation. That wasn’t the case in any respect on this state of affairs. I have been at JSR for 20 years, and when JSR began working via the transition in search of the subsequent CEO, I used to be a part of that course of, ”he says. Johnson studied chemical engineering at Stanford and spent the primary leg of his profession at Nikon, earlier than shifting to JSR to develop a brand new “life sciences enterprise” and lead its operations within the US.

Confronted with the dilemma surrounding the rubber section, Johnson says the important thing for him was taking an natural method and dealing from the issue to the answer with an open thoughts. First, his group di lui zeroed in on making an attempt to restructure the enterprise, settling afterward in search of a purchaser “that is going to permit them to get the funding”.

Johnson centered his method on two parts crucial to getting something carried out at a Japanese group: nemawashi and honne. The previous refers to a course of – typically gradual and arduous – of constructing consensus and airing grievances. Honne means somebody talking their thoughts: a high quality typically in brief provide in Japanese companies, particularly bigger ones, which may change into extremely political and siloed, riven with inner rivalries.

“I am teased. Lots of people say that my favourite Japanese expression is honne. . . I encourage folks to inform me precisely how they assume they usually belief me sufficient to have the ability to do this, ”says Johnson.

To achieve their belief, he moved to Japan to concentrate on the reorganization. “I wanted to ensure I used to be linked very intently to the parents that have been going to be principally impacted by this. . . to have the ability to stand there instantly, give them very open, sincere solutions on how we got here to those selections. ”

He provides that the Ministry for Economic system, Commerce and Business (Meti), which retains shut tabs on business leaders, particularly in delicate areas, has been “part of the dialogue”, though “they by no means mentioned: do that or do this” .

Coping with clients and different “stakeholders” was additionally a key a part of the method, he says. “We did carry the dialogue up very transparently to all the parents that had curiosity, together with some essential clients too – these relationships go method again and clearly the worth of the enterprise relies on them, and likewise our status relies on how they really feel about it . ”

Johnson’s group went via greater than a yr of talks with tens of various corporations, lastly selecting the Japanese refiner Eneos. JSR accomplished the sale of its elastomer enterprise in April with an enterprise worth of Y115bn ($ 845mn).

Regardless of many elements at play, Eneos was not a tough selection, says Johnson. “They checked a whole lot of packing containers – primarily as a result of they’d carry the most effective alternative for this enterprise to thrive. They made our buyer rather more snug, and Meti was rather more snug with that state of affairs. ” He provides that when the choice lastly got here, “there was already consensus”.

“Clearly I am not Japanese, however I recognize the method that permits the folks to interact, with transparency, to air no matter considerations they’ve and it is as much as me to decide. However I by no means felt like I needed to ram this factor down anyone’s throat, ”he says.

Three questions for Eric Johnson

Who’s your management hero?

As a hero, the primary individual I consider is Nelson Mandela. He epitomized the perfect that management is just not about your self, however fairly in regards to the folks you serve, and was actually keen to offer his life for these folks. That is really heroic.

What would you be when you weren’t a CEO?

The sensible reply is that I would be an engineer. I take pleasure in studying how issues work and making an attempt to enhance them, but when I let my creativeness run a bit, I would say a nationwide park ranger. I actually take pleasure in climbing and the concept of ​​with the ability to work in, and shield, pure environments is fairly cool.

What was the primary management lesson you realized?

Decisiveness is essential. However it wants to come back on the finish of the method, after enabling actual and open info move. Excellent news is all the time enjoyable to listen to, but it surely’s rather more essential to allow unhealthy information and criticism to move freely and rapidly.

The flexibility to have such an open dialog a couple of very delicate topic was enabled by a excessive diploma of belief among the many executives, and an efficient governance construction. “It is essential that JSR’s governance has been very progressive from the beginning and it is one thing we take very critically. We be certain that we have now a really well-functioning board, ”says Johnson.

Analysts protecting the inventory, equivalent to SMBC Nikko’s Miyamoto Go, agree, pointing to 4 highly effective and educated exterior members of the board and a inventory value that has greater than doubled from about Y1,500 to about Y3,500 since Johnson took over the corporate .

Johnson emphasizes that JSR’s DNA comprises the power to “reinvent itself each two years” with the cycle of innovation within the semiconductor business, the place there’s an intense strain to constantly give you smaller chips. He stresses the should be adaptable whereas being “snug being uncomfortable”.

When he begins speaking about recent investments being made in quantum computing by JSR, the engineer in him comes via. “There is no enterprise mannequin for quantum proper now. If somebody requested me to justify these investments, I could not do it. Like all exponential, you might be on a flat half – however it should tilt in a short time, ”he says. “You’ll be able to actually take issues which might be unsolvable at this time within the materials science house and optimise and discover new alternatives. That is an instance of how we expect. “

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