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 goal was to construct on his expertise operating its US operations to develop the group’s international 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 international provider of the fabric: it has as much as 40 per cent of the market, which is anticipated 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 “international infrastructure” to navigate the dispute between South Korea, the place the corporate has huge clients, and Tokyo, “with out operating afoul of any of the considerations from the Japanese authorities”.

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

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

“We couldn’t 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 lights up as he explains the engineering behind the newest semiconductor expertise. “But additionally by way of the organisational mindset, you would see two divergent cultures. And in administration focus there have been two various kinds of companies occurring,” he provides, evaluating the largely home, slow-growth rubber enterprise with higher-growth international segments involving semiconductor supplies and biomedical gadgets.

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

Even with out these pressures, overseas executives haven’t at all times 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 consider his management.

“There’s usually an assumption {that a} non-Japanese CEO is introduced in to disrupt an organisation. That wasn’t the case in any respect on this situation. I’ve been at JSR for 20 years, and when JSR began working by way of the transition in search of the following 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 transferring to JSR to develop a brand new “life sciences enterprise” and lead its operations within the US.

Confronted with the dilemma surrounding the rubber phase, 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 workforce zeroed in on attempting to restructure the enterprise, settling afterward in search of a purchaser “that’s going to permit them to get the funding”.

Johnson centred his method on two components crucial to getting something accomplished at a Japanese organisation: nemawashi and honne. The previous refers to a course of — usually sluggish and arduous — of constructing consensus and airing grievances. Honne means somebody talking their thoughts: a high quality usually in brief provide in Japanese companies, particularly bigger ones, which may change into extremely political and siloed, riven with inner rivalries.

“I’m teased. Lots of people say that my favorite Japanese expression is honne . . . I encourage folks to inform me precisely how they assume and so they belief me sufficient to have the ability to try this,” says Johnson.

To realize their belief, he moved to Japan to give attention to the reorganisation. “I wanted to ensure I used to be linked very intently to the parents that had been going to be largely impacted by this . . . to have the ability to stand there immediately, give them very open, sincere solutions on how we got here to those choices.”

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 stated: do that or try this”.

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

Johnson’s workforce went by way of greater than a 12 months of talks with tens of various firms, 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 plenty of containers — primarily as a result of they’d convey the very best alternative for this enterprise to thrive. They made our buyer far more snug, and Meti was far more snug with that situation.” He provides that when the choice lastly got here, “there was already consensus”.

“Clearly I’m not Japanese, however I respect the method that enables the folks to have interaction, with transparency, to air no matter considerations they’ve and it’s 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 particular person I consider is Nelson Mandela. He epitomised the perfect that management isn’t about your self, however slightly in regards to the folks you serve, and was actually prepared to present his life for these folks. That’s actually heroic.

What would you be if you happen to weren’t a CEO?

The sensible reply is that I’d be an engineer. I get pleasure from studying how issues work and attempting to enhance them, but when I let my creativeness run a bit, I’d say a nationwide park ranger. I actually get pleasure from climbing and the concept of having the ability to work in, and defend, pure environments is fairly cool.

What was the primary management lesson you learnt?

Decisiveness is vital. However it wants to come back on the finish of the method, after enabling actual and open data move. Excellent news is at all times enjoyable to listen to, but it surely’s far more vital to allow dangerous information and criticism to move freely and rapidly.

The power 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’s vital that JSR’s governance has been very progressive from the beginning and it’s one thing we take very severely. We make sure that we now have a really well-functioning board,” says Johnson.

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

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

When he begins speaking about contemporary investments being made in quantum computing by JSR, the engineer in him comes by way of. “There’s no enterprise mannequin for quantum proper now. If somebody requested me to justify these investments, I couldn’t do it. Like several exponential, you may be on a flat half — but it surely’s going to tilt in a short time,” he says. “You possibly can actually take issues which can be unsolvable at present within the materials science area and optimise and discover new alternatives. That’s an instance of how we predict.”


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