Hamp affair will set back Japan's move to diversify business

Julie Hamp went from being a flag-bearer of change in Japan's closed business community to arrest and resignation in three short months - but she can rebuild her career back in the US.

Former Toyota global CCO Julie Hamp is out of jail and has flown back to the US after a harrowing three weeks in custody in Japan.

She was arrested for allegedly importing 57 pills of the powerful painkiller oxycodone that is widely prescribed in the US – if in relatively small quantities – but is banned in Japan and regarded as a narcotic. The pills were apparently not declared on the customs label and appeared to be hidden within some items of jewelry.

The high-profile arrest, featured on Japanese national TV, caused some confusion among Western observers who couldn’t understand the fuss around what is a prescription medication in the US, though clearly identifying what seemed to be at best a serious error of judgment on Hamp’s part.

In general, the automotive press has been supportive, save a few outlying bloggers who thrive on controversy and sensationalism.

But in Japan it enabled the local media to pile in and cast doubts on Hamp’s reputation and Toyota for hiring foreigners to such high-profile positions, fueled by tip-offs and leaks from an aggressive police force to Japanese reporters – common practice in the Asian nation.

The whole incident has been a huge wake-up call to other ex-pats working in Japan, some of whom have brought in the exact same drug to the country in prescription medicine bottles, albeit in their personal luggage on an airplane rather than sending it through the mail.

Everyone has been scanning the embassy websites to ensure their medications are on the approved lists of drugs allowed to be brought into Japan. I believe that commonly used products in the US such as Actifed, Adderall, Sudafed, Vicks inhalers, Codeine, Prozac, and Viagra are also prohibited.

In reality, I suspect that if you were found bringing in small quantities of such drugs to Japan with the requisite US prescription information you would probably suffer nothing more than having the substances confiscated and a stern lecture on local narcotics regulations – but please don’t quote me on that and do check in with the US Embassy before you travel.

Nobody knows whether Hamp’s resignation a week ago after just three months was part of a deal struck by Toyota to avoid any danger of her being indicted and imprisoned for up to 10 years. But USA Today reports that Hamp’s release without charge was partly facilitated by US ambassador to Japan Caroline Kennedy, the daughter of President John F. Kennedy.

It certainly avoided the prospect of Hamp having to do a "walk of shame" press conference and subsequent deportation if she had been found guilty of something.

Toyota’s CEO Akio Toyoda held a press conference the day after Hamp’s arrest, appearing to defend her and suggest she hadn’t broken any laws on purpose. But his accompanying apology for the behavior of his "children" – "if a child causes problems, it's a parent's responsibility to apologize"- suggested it would only be a matter of time before Hamp would have to resign.

The concept of "losing face" remains an important one in Japanese society and, as we all know, it is not the communications person’s job to become the story.

Toyota is a large multinational company and moves people around the world all the time. It is used to dealing with ex-pats and embedding them in new markets.

As such, it would be logical to assume the automaker has a foreign-service policy for dealing with inbound ex-pats, though it may outsource it through an expert relocation company that can deal with items such as housing, driving licenses, ID cards, utilities such as gas and electricity, and so on.

Ex-pats I spoke to who have lived in Japan tell me it is impossible to transition without having somebody to "hold your hand," such is the complexity of laws and regulations and not forgetting the language situation – it is apparently a very prescriptive process.

Most relocation agencies will give the incoming ex-pat a handbook, within which the rules about pharmaceuticals are likely buried somewhere.

But, in accepting Hamp’s resignation, an accompanying Toyota statement suggested it felt it could have done more to integrate her and other ex-pats into Japan: "We intend to learn from this incident to help ensure a secure working environment for everyone at Toyota around the world as we continue to take the steps necessary to become a truly global company."

Such is the scale of the reality of moving to a very different new country, hitting the ground running with a complex new job, and dealing with the attendant family upheaval that I can imagine reading a hefty handbook of rules and regulations is probably not top of the list of agenda items for the incoming executive.

In the rush of settling in to a new job you barely have time to breathe. And let’s be clear, this was a massive appointment for Hamp and for Toyota. She was the first woman to be appointed to a senior executive role, and a Westerner to boot. It was a risky and bold - but brave - move by Toyota, given the still-conservative business environment in Japan.

At the same time it elevated Hamp, Toyota Motor Corporation made Frenchman Didier Leroy EVP, the highest rank held by a non-Japanese person in the company’s history. African-American Christopher Reynolds was also elevated to managing officer and general counsel.

The appointments sent out a signal to the worldwide business community that the largest automaker in the world was serious about diversifying its management. It was a remarkable achievement by Hamp, one PRWeek recognized by naming her number 10 on our recently released Power List.

No-one has yet specifically heard directly from Hamp, and I don't want to pre-judge, but she reportedly said she was not aware she was breaking the law by importing the oxycodone.

However, as an experienced global traveler, she really should have known that substances are treated very differently across the world. Not everywhere is the same, and there are certain things you just don’t mail to yourself, or have people mail to you, especially outside the prescribed drug container.

It would be naïve at best to mail medication as strong as oxycodone in the US, let alone abroad, even if it is a prescription substance. In Japan it is regarded as a narcotic, hence the sensationalist headlines that greeted Hamp’s arrest a few weeks ago portraying her as a potential "narcotics smuggler" and as possibly being addicted to painkillers.

The real shame of all this is that it will set back Toyota’s move to diversify its senior management. Toyota is a proxy for Japan – it is part of the fabric of Japanese society. And it sets trends for the wider business world in Japan.

Despite the company’s statement that it remains "firmly committed to putting the right people in the right places, regardless of nationality, gender, age, and other factors," the fact is it is naturally conservative. And it wouldn’t be surprising if it hunkered down after this embarrassing episode for the company, and the swift appointment of 28-year company veteran Shigeru Hayakawa to replace Hamp does nothing to suggest otherwise.

Foreign executives thinking of moving to Japan will also think twice about making the switch having witnessed the ordeal Hamp endured – it is understood Toyota has already lost some potential candidates in the last two weeks who were considering coming to work for the company in Japan.

And foreign executives already working there will come under increasing scrutiny, not just from the authorities, but also from their colleagues.

No-one is suggesting Hamp was set up – if the events rolled out as reported then she has to take her share of the blame. But there is definitely a prejudice in Japan against foreigners in the business world, especially foreign women, as the aggressive treatment she received from the local media on her arrest demonstrated.

When Jim Press was appointed president of Toyota Motor North America in May 2006 he became Toyota’s first foreign managing officer and it was seen as a little bit shocking. He left just over a year later amid suggestions that the Japanese still considered Americans "impetuous" and that they made them "nervous."

Japan has been a closed society for 3,000 years but it is trying to change, and it is going to be held to greater scrutiny by the wider business community as globalization continues.

But the Hamp episode will only provide fuel for that fire, with the doubters seeing it as evidence that foreigners are flaky and untrustworthy – and "drug smugglers."

Hamp unsurprisingly flew straight back to the US following her release from prison. The question now is what it means for her long-term future as a senior communications professional and how much damage it has done to her reputation.

America loves a turnaround story, and I suspect that if she lies low for a while, then comes out and tells her side of the story, with an admission of an error in judgment if necessary and appropriate, there will be companies willing to provide her with a new berth.

She didn’t suddenly become a bad practitioner overnight - and I believe she can learn from her mistake, put this unfortunate episode behind her, and gradually reintroduce herself to the US business market.

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