JEN at Metropolis on the Nova situation

12 Responses to “JEN at Metropolis on the Nova situation”

1. Mr. Noah on October 27th, 2007 7:47 am

   To me, the real mystery in this situation is how a firm with such a low-quality product as NOVA’s was able to be so successful over such a long period of time. I can see frivolous consumption in the 80s bubble era as being a factor - hey, it’s raining money, why not pay some random foreign bum to jabber at you for 40 minutes? - but its continued success from 1998-2006 is just astonishing.

2. Bp on October 27th, 2007 10:17 pm

   The answer definitely lies in the hands of the consumers rather than any effort on Nova’s part. I worked at Nova for a while and although some of the instructors really went the extra mile and delivered worthwhile lessons it was despite the Nova system rather than because of it. I think the only thing they ever got right was to appeal to the japanese obsession with brand names. I noticed a lot of Nova students who for some reason considered themselves the elite of all english students because they had this huge brand name behind them. It didn’t matter that half the teachers stank of last nights liquor or that often they couldn’t give the answers to to simple grammar questions, the name was the important thing. Nova Kids was the biggest case in point.

   I don’t think Nova instructors should receive any blame for not being real teachers though. It’s simple - if you want a working holiday in Australia or NZ you pick fruit, in England you work behind a bar, in the US its summer camp and in Japan you talk to housewives. All easy jobs for relatively low wages but enough to experience the country. If consumers settle for an inferior product then that’s where the blame lies.

   Or maybe with Louis Vuitton for starting this brand name obsession.

3. Trev on October 28th, 2007 12:28 am

   “how a firm with such a low-quality product as NOVA’s was able to be so successful over such a long period of time.”

   I am no fan of Nova, but I think their product was mediocre rather than low quality. In that respect, they are like McDonalds. Their target is low priced, highly consistent mediocrity.

   The reason Nova was so successful, in my opinion, was that the competition had even lousier products. Good education is expensive- it takes years to train teachers properly, but businesses are based on sales success, not educational success, so survival pressure favors teachers who are good at sales lessons. No eikaiwa would be able to afford to hire properly qualified teachers, just as McDonalds can’t afford to hire trained chefs to fry burgers. Neither business model is based on high quality product, but on consistently mediocre product.

4. Mr. Noah on October 28th, 2007 10:34 am

   Bp - I’m not blaming NOVA teachers for the poor quality of Japanese English education. That consumers keep consuming the low-quality crap is the problem. One would think word of mouth or media attention would eventually make Japanese consumers realize that this “education” doesn’t work; in fact, something very similar happened in Korea, where a documentary about the English conversation industry drastically reduced consumer demand and rightly crippled the industry. That should have happened in Japan 15 years ago…where was the Japanese media? Where was word of mouth?

5. Ken Worsley on October 28th, 2007 11:09 am

   where was the Japanese media? Where was word of mouth?

   Getting money from advertisers.

   You don’t think Dentsu would like seeing such a documentary made in Japan, do you?

6. M on October 28th, 2007 1:12 pm

   I just want to add my 2 cents worth into the ring.

   First let me say that everything in this post is from my experience and memory. Please don’t take anything as 100% factual.

   I’m an ex NOVA MMC “Instructor” from late 2001 to early 2006. From my experiences and talking with a lot of staff, reading the newspapers daily and generally keeping my ear open, I realized the downwards spiral was beginning in mid to late 2003 and started putting together my exit plan.

   In 2001, I think, the MMC was opened and moved to its current location in August 2001. From then throughout 2002 there was a massive recruitment of Instructors for all languages. By 2003 they had around 700 Instructors. In 2001 and 2002 the exchange of the Yen for ones’ home currency was pretty good so attracting new Instructors was quite easy.

   In late 2001 NOVA stock was around ￥200.

   Sometime in mid to late 2003 we were informed that NOVA had been approved by the appropriate agency for the Vocational Training Subsidy which is a benefit of paying into Unemployment Insurance. These students would have up to ￥300,000 or so of their lesson fees paid for by the Unemployment Insurance System. Instructors would recognize these students by a code beside their Student Number. From then we saw a jump in student enrollment.

   Early 2004 the NOVA CAT Levels (Zones) were given “official” recognition by some body or organization. Staff would tell students that a NOVA CAT Level would be equivalent to incremental TOEIC scores. As far as I know NOVA was the only Company with this recognition and other companies (Employers) could use the NOVA CAT Level to ascertain a current or potential Employee’s English proficiency.

   By late 2004, early 2005 NOVA stock rose to around ￥1,300.

   This is when the rapid expansion idea began. For what reason the decision was made, I have no idea, but I assume there were many factors. One of the necessities for increasing the number of NOVA branches was the MMC’s number of Instructors. Since it takes time to employ, process and bring over new Instructors, the MMC Instructors were conducting many of the regular lessons via Ginganet in the new Branches.

   Around this time the exchange rate for Yen, especially for US Instructors wasn’t as good as it had been. Also in 2005 the basic salary requirement (from one of the ministries but I don’t remember which) for all full-time non-Japanese employees dropped from ￥250,000 to under ￥200,000 (￥180,000 I think). For Americans especially, NOVA’s basic salary was equivalent to a full time gig at Starbucks I’d heard.

   Then there was the Shakai Hoken scandal. NOVA was found to have been illegally denying their non-Japanese staff and Instructors access to Shakai Hoken. I remember at my orientation being told that we don’t need to pay for this as we were not Japanese (and it’s very expensive). All non-Japanese NOVA staff and Instructors were enrolled in the JMA Health Insurance Scheme. JMA, a NOVA company, was backed by one of Japan’s larger insurance companies. When the scandal broke, that company ceased to back JMA and released a statement that they believed all JMA members were also enrolled in Shakai Hoken.

   To bypass Shakai Hoken legislation NOVA modified the employment contracts of all then current Instructors so that (on paper) the actual working hours came under the “full-time” category. All new Instructors (from the appropriate countries) were then employed as part-timers. This meant that as part-time employees the Instructors could not be issued a sponsored working visa. These new Instructors came on Working Holiday Visas.

   At this time, end of 2005, I was introduced to a new Instructor from Australia. He was furious because, when in Australia, he was told that he would be employed full-time. He was told that all he needed to come and work in Japan was a Working Holiday visa. Once he had got the visa and was about to leave he was informed by NOVA to not enter any information about his job on his embarkation and debarkation forms in Australia and Japan respectively. Once he arrived and was going through Orientation he was informed that unfortunately his contract had had to be changed to a part-time contract due to the company’s needs. When I came in 2001 I received and signed the contract before I left the country.

   Another hiccup in late 2005 (it was a bad year) was the refusal of Cambridge University Press to renew the license for the use of their material in the NOVA Textbooks (Quest). Cambridge had informed NOVA earlier in 2005 of this but it wasn’t until about 3 months before the license expired that NOVA stated developing their own textbook. (perhaps they were looking at other avenues before but I don’t know). In charge of the new text book development was Director Lunqist, a non-native English speaker. If you’re not aware of the new text book (I don’t even know the name of it), it is appalling. Basically a phrase book with; I say, you say instructions. For the lower levels it would have been better to just buy a travel phrase book. This was release in November 2005.

   This is when students started to quit in droves, the new textbook was not a success. Students complains went through the roof and unfortunately from my experience company policy was to lay the blame squarely on the Instructors.

   At this time NOVA stock was about ￥600 and I think there was a Split just after that.

   To allay student complaints (perhaps) a new CAT policy was instigated. Previously to sit for a Level Up CAT a student had to have 2 consecutive recommendations for Level Up from 2 individual Instructors (MMC policy). The student would sit the CAT and the CAT Instructor would assess and pass or fail the student according to the guidelines.

   With the new policy basically the CAT Instructor was “encouraged” to always Level Up. This “encouragement” was that if a CAT Instructor failed a student according to the guidelines they would have to justify their decision to their designated Titled Instructor. This was a laborious process that was frequently done after the Instructors shift was completed, often taking up to an hour if the CAT Instructor was adamant. Basically what we learnt after a while was that the Japanese staff were instructed to always Level Up the student no matter what the CAT Instructor’s justification was. Remember that the NOVA CAT Levels still had “official” recognition.

   Another reason for this was perhaps to reduce the students’ prepaid lesson points. As far as I know the point cost of a CAT (a Man to Man lesson) was 3 points, whereas a usual lesson was 1 point. Level Up CATs were reduced from 20 minutes (2 per period) to 10 minutes (possibly 4 per period, I don’t know I left at this time) with this new CAT Policy.

   That’s as much I know about the inner working as I left at that time. If anyone else would like to informatively pick up from here it would be interesting to see.

   Some side notes: According to various sources (Instructors, Titled Instructors, staff, blogs of survivors etc.) the average length of stay with a NOVA Branch was 7-9 months. At the MMC the average was 3 years. During the Branch expansion period, when NOVA was relying on MMC Instructors to conduct lessons in the new Branches, many Instructors had done their 3 years or so and moved on. With the lower attractiveness of a basic NOVA salary due to foreign exchange, NOVA found it difficult to replace these individuals and in 2005 there were around 400 Instructors and Titled Instructors working at MMC.

   To replace the Japanese backer of JMA, NOVA contracted with a New Zealand Travel Insurance company (I don’t remember which). That company I’ve heard was under investigation for some kind of illegal dealings by the New Zealand Stock Exchange monitoring body. I don’t know anything about this so it is definitely hearsay. If you know more…

   Thank you for reading, I know this is a long post but I hope you have found it informative.

7. M on October 28th, 2007 2:45 pm

   Sorry I made an error. It wasn’t Cambridge University Press, it was Oxford University Press.

   We didn’t use the Textbooks in the MMC so….

   Sorry for that piece of mis-information.

8. Eikaiwa Giant Nova Faces Bleak Days Ahead | Japan: Stippy on October 28th, 2007 8:31 pm

   […] Let’s Japan, Japan Today, Japan Economy News, and of course Metropolis. […]

9. H on October 28th, 2007 11:49 pm

   Interesting quotes in the Metropolis article. I would like to know however, if your source still agrees that Sahashi has not done a runner. Given the enormous cat that is about to come out the bag, I wouldn’t blame the guy from taking an indefinite vacation to Timbuctoo.

10. Mr. Noah on October 29th, 2007 11:44 am

    Getting money from advertisers.

    You don’t think Dentsu would like seeing such a documentary made in Japan, do you?

    I doubt that a media conspiracy was behind NOVA’s improbable success. First of all, plenty of smaller schools with far less advertising clout were (and are) even worse. Second of all, word of mouth is basically more powerful than media when it comes to quality issues. Everyone knows Fords fall apart and old Dell computers overheat and Applebee’s food is bland, nobody needs a media expose to tell them that. And in Japan, Sony has had plenty of bad publicity, when its products took a dip in quality in the 90s; compared to Sony, NOVA is (was) small potatoes.

11. Ken on October 29th, 2007 12:17 pm

    Noah, My comment was pretty dripping with the sarcasm. Sorry it didn’t carry.

12. Trev on October 31st, 2007 6:39 pm

    M- very informative.

    However, apparently “Nova Rocks” and teachers and students alike adored the new book.

    http://metropolis.co.jp/tokyo/569/lastword.asp

    Sounds so good, I might ask for my job back too.

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