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Stories by David Milstein & Ted Nakai, Driving Transformation: Our Collaborative Journey Towards Change and Mutual Support - June 19th Sketch Summer 2024 Preview Article Part 3

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Welcome to Sketch Summer 2024, an exclusive enterprise Chief Officers' discussion party hosted by Culturelabs, where leaders come together to share their stories and spark ideas in a flat, inclusive small-group setting. This time, we will feature a series of compelling narratives from CXO Storytellers. These profiles offer a glimpse into the experiences of leaders who have navigated the complexities of the corporate world, championed diversity and inclusion, and harnessed the digital and transformative power of people. Dive into these profiles and get a taste of the thought-provoking discussions to take place at Sketch Summer 2024. (Click here for more information on Sketch Summer 2024)

This week, as the final article of the three-week previews, we will provide excerpts from stories by our CXO Storytellers. This final week, we begin with stories of driving transformation and the collaborative journey towards change and mutual support.

Supporting Diversity in Venture Capital: Lessons from David Milstein’s Experience

Profile picture of David Milstein

David Milstein, Managing Partner, Japan Head, Eight Roads Ventures


The venture capital (VC) industry in Japan has been grappling with diversity issues for years. The recent resignation of David Milstein, managing partner of Eight Roads Ventures Japan, from the Japan Venture Capital Association (JVCA) board has spotlighted the industry's struggles and the urgent need for meaningful change. Here is a summary of what he told several media about his decision and what he hope his departure would accomplish.

Navigating Organizational Change Fatigue

Ted Nakai, CPO Office Leader, Chief of Staff to the CPO, LIXIL Corporation

Profile picture of Ted Nakai

In today’s rapidly evolving business landscape, change is a constant. Companies are in a perpetual state of transition, adapting to new technologies, market demands, and strategic directions. This relentless pace of change can lead to "change fatigue," a state where employees feel overwhelmed and disengaged. Ted Nakai, Chief of Staff to the CPO and leader of the CPO Office at LIXIL Corporation, shares his observations on this phenomenon and offers valuable insights on how organizations can effectively manage it.


Supporting Diversity in Venture Capital: Lessons from David Milstein’s Experience

David Milstein, Managing Partner, Japan Head, Eight Roads Ventures

Profile picture of David Milstein

The Incident and Resignation

David Milstein’s departure was triggered by an incident in mid-October 2023 where a fellow board member of the Japan Venture Capital Association posted sexist comment on the organization’s Slack channel. He told various news sources that he had found the comments deeply inappropriate and despite calling for a discussion with the board, said he'd received no response from other board members. This, he said, highlighted a severe lack of urgency and commitment to addressing such issues. "That kind of confirmed in my mind that there was a verbal commitment to diversity [and] inclusion but there wasn't a real commitment to make change and hold people accountable," Milstein told Nikkei Asia in an article in December 2023.

Although the offending member apologized and retracted the comment, Milstein felt this was insufficient and resigned, citing a disconnect between verbal commitments to diversity and actual accountability.

The Broader Context of Diversity in Japanese VC

Milstein has told various news media that while the JVCA has recognized the importance of diversity, they have struggled with implementation. Despite setting a goal in 2022 for 20% of speakers at events to be women, LGBTQ individuals, non-Japanese nationals, or persons with disabilities, the reality within the industry remains bleak, he said. A survey in 2022 by the JVCA revealed that women only account for 9% of managers with investment decision-making power, and non-Japanese just 7%. This lack of representation even extends to the JVCA board, which includes 18 men and only three women .

Initiatives and Responses

In response to these challenges, the JVCA has pledged to set numerical targets for diversity within its ranks. By the end of July 2024, they aim to increase the percentage of female and non-Japanese executives to 30%. The association plans to issue guidelines and support measures for member companies, including joint recruitment events and study groups for female capitalists. A committee of outside experts will also be established to monitor the implementation of these measures.

However Milstein’s actions underscore the need for both internal advocacy within organizations and external pressure to drive change. By publicly resigning and raising awareness, Milstein has shone a light on the systemic issues within the Japanese VC industry.

"Eight Roads operates globally, and almost half of the team is female," Milstein noted. "Diversity is the norm. So I did not know that the situation was this bad," he said adding that he also soon realized that the incident with the board member was actually an everyday occurrence with women in the industry.

Diversity as a Catalyst for Venture Capital Growth

Milstein continues to emphasize the paradox in the current environment of Japanese venture capital firms, questioning why industries continue to make it difficult for women, who constitute half of the population, to work. Venture capitalists (VCs), he says, need to ensure a return on their investments and should not create environments that hinder growth.

The Japan Venture Capital Association (JVCA), with its over 300 member firms, includes many individuals from diverse backgrounds, such as women, LGBTQ individuals, and non-Japanese professionals. Milstein asserts that if top management lacks a solid understanding of diversity and inclusion (D&I), it will inevitably make the work environment challenging for these employees.

By fostering greater diversity among startup board members and investors, companies can expand their opportunities and potential. Without this commitment to diversity, the growth prospects for startups remain limited.


Navigating Organizational Change Fatigue

Ted Nakai, CPO Office Leader, Chief of Staff to the CPO, LIXIL Corporation

Profile picture of Ted Nakai

Understanding Change Fatigue

Change fatigue occurs when employees become weary and resistant due to the frequency and magnitude of changes imposed upon them. According to Nakai, one of the fundamental aspects of managing change fatigue is how the change is promoted and implemented within the organization. "Since change is inevitable, I think the important part is how to promote the change and how to make the change together," Nakai explains. He emphasizes the difference in employee perception when they are involved in the decision-making process versus when changes are imposed upon them. "The change that is brought about by someone else and the change that is brought about by a decision that you are part of the decision-making process are probably very different in terms of the sense of fatigue that they will feel. I think the key is how to remove the feeling of being forced to make a change."

Strategies for Maintaining Morale and Engagement

During times of transition, maintaining employee morale and engagement is crucial. Nakai advocates for a focused approach to change management. "A team should always focus on one change. Instead of doing 10 jobs at the same time for 10 months, do 1 job for 1 month at a time," he advises. This strategy helps to reduce the cognitive load on employees, allowing them to concentrate on one task at a time, thereby improving efficiency and reducing stress.

Identifying and Addressing Symptoms of Change Fatigue

Nakai identifies several symptoms of change fatigue that organizations should be aware of. One of the most critical symptoms is organizational rigidity. "No one wants to work in a department that is too busy," Nakai points out. When a department is overwhelmed, it leads to an inability to prioritize workloads effectively. "All ongoing projects become High Priority, and after a year, you can't even deliver 50% of your High Priority projects, and you feel more fatigue than accomplishment."

Furthermore, Nakai notes that repeated changes can lead to a lack of clarity in roles and responsibilities within teams. "Due to repeated changes, the roles of each team and job in the organization are gradually becoming unclear, and team members are not sure which team exists and for what purpose. In addition, duties become concentrated on specific individuals or teams, and the fatigue level of the team whose work is concentrated increases dramatically."

Mitigating Change Fatigue

To combat change fatigue, Nakai suggests several approaches. First, involving employees in the change process can significantly reduce the feeling of being forced into a new way of working. Creating a sense of ownership and participation can alleviate resistance and increase acceptance. Second, maintaining a clear and focused approach to implementing changes can help manage employee workload and stress levels. Prioritizing changes and allowing employees to tackle one project at a time can enhance productivity and morale.

Additionally, it is essential for leadership to recognize the signs of fatigue early and address them promptly. This can involve reallocating resources, providing additional support to overloaded teams, and ensuring that roles and responsibilities are clearly defined and understood.


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