A recent visit to Japan afforded me an opportunity to learn about that country's troubled banking system. I came away with lessons for our own financial services industry and profession, and here are some of them.

Rigidity does not work in an age of change.

The Japanese banking system is inflexible. Though the people are extremely industrious, change is not a core competency of the country or its culture. Adhering to past practice and valuing tradition are prime values.

As a result, not only is the average Japanese banker thinking completely "inside the box," but also the entire system has great difficulty adapting to the inevitable changes stemming from foreign competition and financial globalization.

Tradition has much merit but also downsides.

Tradition, which lies at the core of Japan's legendary work force ethic and productivity, is a major strength of the nation and its economy. At the same time, tradition values age over wisdom and tenure over creativity and innovation.

Many younger executives are frustrated by their inability to break through the tenure barrier and, therefore, opt to work for more open, foreign companies. This is a great loss to the system since it is precisely those young minds that are open to new ways of doing things and willing to test new paradigms.

Speed counts.

Many of the people I spoke with talked about the inability to move fast in Japan. Good drivers might overcome this impediment on the road, but it is tougher to do so in the corporate corridors. There is a Japanese talent for organization, a methodical approach to processes and attention to detail that are unmatched in our system. Yet this great asset is also a negative since it stands in the way of fast decision-making, another essential ingredient of success today.

The grass is always greener.

The Japanese people I met were interested in how we are doing things in America. They found our system to be an ideal to emulate.

Indeed, there are many great things about our financial system and our willingness (if not ability) to modernize it. At the same time, I looked at the immense Japanese market-with its enormous savings rate, high growth potential, low-profit cross-selling, and cumbersome distribution networks- and saw unparalleled opportunities.

It's all about people.

The most striking lesson for me in looking at Japanese banks was the lack of focus on leadership. People are the only true competitive advantage, yet they get very little attention from management.

The focus is on coming to grips with necessary cost cuts, systems enhancements, data base management, sales-process installation, product expansion, and distribution issues. Japanese banks now see the potential of retail banking and want to tap it.

My experience tells me, however, that the only way to fully realize the potential of retail relationships is through a motivated, effective, needs- based, driven sales force. Ultimately, retail banking is all about people acting on information. Without people effectiveness, even the best data will go to waste. Yet the focus on this enormous resource is not there.

My visit, in conjunction with the Japanese translation of my book on super community banking, did not make me more than a casual observer of their system. But I recall that in the American system after deregulation, competitive forces and marketplace innovation created pressures never before encountered.

Those pressures led to many stumbles before we came to grips with the real issues, saw where profits are truly being generated, and began biting the bullet of distribution system rationalization. It took us a decade to get on the right path, and the journey to competitive parity with nonbanks, monoline companies, and others remains long.

It may be that the Japanese banking system needs to get through the hesitancy stage and move into realizing its incredible potential in order to become the global competitive force it should be and has been in the past.

As Japan's banks undergo this painful transformation, we can watch and learn. Japan has always been great on execution. And ultimately, our future depends entirely upon flawless execution. Ms. Bird, an executive vice president at Wells Fargo Bank, is based in Sacramento, Calif.

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