Human resources

An end to one size fits all training in Japan

At a meeting I facilitated of Japanese and non-Japanese board directors of a financial services company in London, the Japanese directors had many questions about employee development in the UK. They wanted to know how the highly specialized professionals in the firm gained the management knowledge needed to reach senior management positions. The answer was that in the UK this is largely through attending externally provided courses, in contrast to Japan where this knowledge has traditionally been gained “on the job” through job rotation.

This then led to a further question – what is the incentive for employers to invest in externally provided training if employees just use this as a springboard to go to another company?

The answer to this was that British financial services companies are under increasing pressure from the regulatory authorities for managers to be accountable for not only their own conduct and behaviour but also that of their team. This means that the annual performance appraisal is not just about whether performance targets have been met but also behavioural goals. Any gaps between expectations and achievement in terms of performance and behaviour should then lead to a development conversation about what kind of training and resources the employee needs to do their job better.

With the introduction of “job type” (known as “job kei” in Japanese) HR systems, this kind of approach will be needed in Japan too. It is different from seika shugi (literally “results based system”, introduced in many Japanese companies in the 1990s and 2000s) because seika shugi was more focused on performance targets and the impact on bonuses, whereas job type appraisals are both on performance and behaviours and what this means for the person’s future development.

Managers cannot just leave it up to HR departments to take the “yoko narabi” (one size fits all) approach to training each cohort simultaneously because the training has to fit the job descriptions and personal development plans. Similarly pay and bonuses cannot be set at a “one size fits all” basis across every department either.

It may take a while for a graduate recruit to grow into the job, however, depending on the function or business they are allocated to, so it would be unfair if there was too much disparity in the way the graduate intake was treated, early on.

This is why major employers in Europe such as Unilever have multiple graduate training programmes. Unilever offers 7 different tracks for its Future Leaders Programme for new graduates: marketing, HR, finance, R&D, supply chain and engineering, technology management and customer development (sales).

I nearly joined the Unilever marketing track (more than 30 years’ ago) but rejected the offer because I felt overwhelmed by the huge binder they placed in front of me, mapping out my first three years in minute detail. Instead, I joined a PR company as one of their first graduate recruits. I later came to regret this choice, as the training programme was entirely in-house, poorly executed and graduate trainees were treated inconsistently. Japanese companies need to find a balance between these two extremes and the Japanese yokonarabi model, both overseas and in Japan.

This article by Pernille Rudlin originally appeared in Japanese in the 11th November 2020 edition of Teikoku Databank News

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The generation gap in working from home in Japan and UK

Despite the UK government’s announcement that companies can allow employees to return to their workplaces from August 1^st2020, the Royal Bank of Scotland told 50,000 of its staff to continue working from home until 2021. A friend who travels into their City of London office once a week tells me it is still eerily quiet and only essential staff are coming in. Lifts can only take 1 person at a time and half of the toilet cubicles have been shut down. A British architect has predicted that this will mean the end of the high-rise office building in London as many firms are making changes for the long-term. Some smaller City firms have shut their office permanently, and others are sub-letting their office space to other businesses.

I see similar trends in Japan too, judging by announcements from banks such as Mizuho or ICT companies such as Fujitsu, wanting to accelerate their digital transformation.

When I was a UK-based employee of Fujitsu ten years’ ago, I used to work from home quite regularly. My team was scattered across the world anyway, so most meetings were done by teleconferencing. Working from home is already well embedded in Europe. For people with children where both parents are working, it is often the only practical solution.

Most people who work in London and have children cannot afford to live centrally, so have long, crowded commutes – just like in Japan. They have no intention of being made to ride on a packed train until a coronavirus vaccine is commonly available.

But there is a generation gap in Europe with regard to working from home, which companies will have to address. Younger, single employees, despite being “digital natives”, are finding working from home very stressful. Partly it is to do with loneliness – for young singles, the workplace represents a vital social life. It is also to do with trust. More senior employees have already built relationships with their co-workers and are confident in their own abilities. Younger people lack that confidence and have not had enough time to prove themselves to their colleagues.

There is also the problem of the environment for working from home. More senior workers have bigger houses. Whereas many young Londoners share houses and flats with other young people. They may have a very small bedroom and no communal rooms apart from a kitchen.

This issue is true for city dwellers in Japan as well of course – a 1 bedroom apartment may have no space for a desk or the possibility of shutting the door on noise and distractions.

But it seems there is one dissimilarity between Japan and Europe – which is that middle aged people in Japan find working from home stressful too. As managers, they have been used to evaluating staff on the amount of effort put in, rather than results, and communicating through horenso and ishindenshin. None of these approaches work well remotely. Digital transformation is going to be as much about managing people as managing ICT.

This article originally appeared in Japanese in The Teikoku Databank News on 12 August 2020

Medium Term Plan Disease

Many Japanese companies have a Mid or Medium Term Plan, usually covering three years, announced by incoming Presidents, with a second one issued half way through their 6 year term. It is sometimes translated into English, but often in a way that does not resonate with employees outside Japan. This lack of awareness or sense of connection to the MTP outside of Japan HQ is a problem for Japanese companies who want to be truly global.

The difference between a world class company and Japanese companies is reflected in the way the Mid Term Plan is developed, says Hioki Keisuke, a partner at Boston Consulting Group Japan, in a recent series in Diamond business magazine on “Reasons why Japanese companies cannot compete globally”.

He looks at various definitions of global, world class companies and notes that only two Japanese companies can be seen as global – Canon and Sony – by Alan Rugman’s definition of having less than half of their sales in their home region with two other regions representing 20% or more of sales.

Three tests of global maturity

Hioki adds three tests of being truly global:

Can your company count its global cash holdings? How much, in what currency and where, by subsidiary?
Is global talent visible? Is the information needed for discovering, training and promoting talented employees globally available, showing their experience and skills?
Is the direction of the company clear? Are management aware of the environment in which it operates, the strengths, the uniqueness and the businesses to focus on?

He points out that many Japanese multinationals still operate on the old international model, where there is a headquarters, which sits above the business divisions, who in turn control the domestic and international subsidiaries. He calls this the “Group company” model, operating on an “entity base” where there is “a castle in every domain” – a reference to the Edo feudal era in Japan.

The transnational model

World class companies are “one company” operating on a function base. There is a corporate function, but not specifically located in any one geographic region. The business units report into it, and the finance, HR, Legal, R&D, marketing and IT functions supply services across the subsidiaries, and also report into the corporate function.

When I was at Mitsubishi Corporation in the 1990s, I remember getting excited about the transnational model which Sumantra Ghoshal and Christopher Bartlett had outlined in their “Managing Across Borders” book of 1989. Hioki points out that although that seemed a far away ideal then, it is the reality now for most world class global companies.

As well as trying to promote that model internally as an organisational structure for Mitsubishi Corporation, I became involved in helping the Corporate Planning Office turn the Medium Term Plan into something that made sense in English. It was then that I realised that there was something about the Japanese language itself, as well as the way the Medium Term Plan was compiled that meant it was both extremely vague, and yet based on a huge amount of detail, gathered “bottom up”. What was lacking was what a Western company would recognise as a strategy, to link the detailed plans to the vision for the future.

Scenario planning vs vague vision

According to Hioki, the Mid Term Plan in a world class company should be seen as “guidance” across 2-3 years, and a link between the megatrends or scenarios and the annual commitment plans. It should be revised every year and then a commitment plan and forecast for the year and each quarter developed from it.

I remember about 10 years’ ago the bafflement expressed by a group of senior managers working at a German automotive company when their counterparts in a Japanese automotive company said they had never heard of scenario planning. Hioki says many Japanese companies are now working on scenarios and megatrends, but the long term, medium term and short term plans are still independent events. This was not quite the case at Mitsubishi Corporation, but certainly the Corporate Planning Office had an unenviable task in trying to tie what they were told was the plan by each business unit into something that cohered with the vision that the President had.

The origins of the Mid Term Plan

Hioki says the Mid Term Plan has its origins in 1956 when Panasonic’s founder, Matsushita Konosuke first introduced the Matsushita Electric 5 Year plan. “More than 60 years have passed since then. It’s not that a mid term plan is bad, but I think it’s time to adopt a way that suits the present times.”

The transnational model was meant to provide a way to trade off globally efficient integration and regional localisation and optimisation. Production is decentralised, and each region develops its own specialities and differentiated value add, but global management is integrated, knowledge is centralised but R&D and development is done through collaboration and shared around the world.

Functions first, not as an afterthought

Hioki also argues that accounting & finance, HR and legal functions should be actively involved in planning and strategy, rather than coming after the business divisions, cleaning and tidying up. Hashimoto Katsunori, former CFO of DuPont Japan and now professor at Tokyo Metropolitan Business School points out that another difference between world class and Japanese companies is “cash awareness”. The response to the coronavirus crisis should be to stash as much cash as possible to ride it out, but Japanese companies were not quick to do this. Japanese companies tend to be cash rich anyway, but also they do not see their cash reserves as belonging to the shareholders, the way world class companies do. And as a consequence, they prioritise sales over profits. They do not understand that cash flow contributes to corporate value.

Hioki describes traditional HR in Japanese companies as behaving like teachers with a grade book, pulling people up for mistakes and spending their whole time creating systems. In a world class company, HR should be about ensuring that the vision, mission and values of the company permeate throughout the organisation, as well as contributing to the development and growth of the company and its employees.

Japan’s new “job type” system explained

Many Japanese companies such as Hitachi and Fujitsu are introducing a “job-type” (job-gata in Japanese) system. The term “job-type” will not be familiar to Europeans, so we will draw on a series in the Nikkei Business to explain the background to this change.

It’s common practice in Japan to hire full time, permanent staff, usually straight out of university, known as “seishain” with a ‘blank contract’ and no clear definition of the content of the work or the location of employment. Many Japanese commentators call this the “membership type” system, because the new recruit has in effect become a member of a corporate community. I like to use Trompenaars Hampden-Turner’s description of Japanese companies being a “family” company too, even if the founding family are no longer in control.

In contrast to this, the “job type” system is commonly used in Europe and the US, where the company and the individual have a carefully worded employment contract, and the content of the job and remuneration are clearly set out in advance.

	Job type	Membership type
Duties	In principle, duties outside the job description are not undertaken	Boundaries of the role are not clearly defined. Job rotations are common.
Salary	Salary is based on job evaluation/duties	Salary is based on ability and position in a career track, which in turn is based on years of service
Job location	Job location is defined and limited. In principle there is no relocation	Job location and assignment is not defined. Relocation is the norm
Training	for immediate applicability – up to the individual to acquire	long term employment is the precondition, so the company trains the individual.

3 decades of HR reforms

There is plenty of criticism that this is just a repackaging of the much criticised seikashugi or performance based system. Many Japanese companies introduced this after the economic bubble burst in the 1990s but it was seen as simply a cost cutting exercise. Managers started looking for ways to reduce employees’ bonuses, which up until then had mainly been based on company or divisional performance. Nikkei Business notes that the “3 lost decades” in Japan have seen a series of crises followed by changes to HR systems, but somehow the change is watered down and the company reverts to seniority based HR management.

Companies that have introduced the job type system include Mitsubishi Chemical. When they first introduced it in 2017, it was still the manager who made the decision on promoting employees, and as a consequence the seniority element remained. So from October this year they are introducing an open application system, to increase fairness and transparency. Mitsubishi Chemical’s HR Director Nakata Ruriko notes that their workforce is no longer the homogenous group of lifetime employees recruited as graduates. There are more mid career hires and dual income couples, trying to balance child and elderly care. Nakata is introducing choice and the ability to build your own career, to respond to this diversity.

The telecoms company KDDI has skipped trying to negotiate with the labour union to introduce the job type system to current union members and is only introducing it to managers and new graduates from April 2021. There will no longer be the same salary for all new graduate recruits – compensation will depend on skills and internships undertaken before entering the company.

Fujitsu has ended “side by side” cohort based training and a mandatory retirement age. The position of manager will be open to all, but if you do not ask to be a manager, you will not be promoted.

Working from home and relocations

Having a job type system also helps with working from home, as people have more autonomy and clarity on the boundaries to their work. Several Japanese companies are also ending the “tanshin funin” job relocation where the employee (usually male) would be assigned to another location and move there without their family.

From the management side the intentions behind bringing in a job type system depend on the sector, but at least one of three main reasons are usually cited:

the need to bring in people from outside the company who have the skills to support the company with technological innovations such as AI
to counter the constant increase in labour cost brought about by the seniority based system
a unified, globally applicable HR system which will improve internal job mobility across multinational operations

Over half of Japanese employees prefer the job type system

Nikkei Business surveyed over 1100 employees and found that nearly half preferred the job type system, compared to 24% who preferred the membership type system. When asked “do you think you can survive a switch to the job type system?”, 62.4% felt they could. More than 75% of the respondents said they would like to continue to work from home even after the pandemic was over.

But better state support and retraining are needed

The chairman of Rengo, Japan’s Trade Union Confederation, points out that Japanese employees are still very dependent and tied to their companies. If the aim of a job type system is to increase labour mobility, there needs to be more of a state safety net provided than there currently is. Some companies will simply be looking to reduce costs and those employees whose skills are no longer needed will find it very hard to switch to another company if they are no longer satisfied with the pay they receive for the work they do.

Takeda Yoko, a Director at the Mitsubishi Research Institute recommends FLAP as a way to succeed in a job type system – Find the work you want to do, Learn how to do it, Act upon this learning and then Perform – be evaluated and treated correctly.

“Japanese companies are weak at the top” – Horiba’s CEO

I was recently asked what Japanese company’s mission statement I most admired and I said Horiba’s “Omoshiro okashiku” which is translated into English as “Joy and Fun” (but the fun also means quirky, or as Horiba says “interesting” which is what I think many Japanese companies are to Western eyes, and that’s a good thing). I know from reports from our consultants in Germany that this ethos is transmitted to the overseas subsidiaries too. This interview with the President of Horiba in Nikkei Business by Higashi Masaki, the Editor, is so interesting, I have not made a precis, rather with big help from Google Translate, have left it pretty much as is.

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Since Horiba Atsushi took office as president, sales have increased more than five times, and overseas employees are now the majority, transforming it into a global company. He has also developed a unique corporate culture, including calling employees “Horibarians” regarding them as part of the family. We asked about Japan’s challenges as seen by companies competing globally in technology development.

(Interviewer: Masaki Higashi, Editor-in-Chief of Nikkei Business)

PROFILE

Atsushi Horiba was born in 1948 in Kyoto Prefecture. After graduating from Konan University Faculty of Science in 1971, he joined Olson Horiba, Inc. of the United States. He then joined HORIBA, Ltd. in 1972. He is also graduated from the Department of Electronic Engineering, Faculty of Engineering, University of California, USA in 1977. After that, he directed the overseas expansion of the group, and after working as a director in 1982 and managing director in 1988, became president in 1992. He has also served as chairman since 2005. He has been in his current position for18 years. He is also the face of the local business community, such as serving as the vice chairman of the Kansai Economic Federation. He is the eldest son of Masao Horiba, the founder of HORIBA, Ltd.

The automobile industry is greatly affected by the new coronavirus.

It was a difficult time for car makers even without the coronavirus. This is because there is a dramatic switch towards “CASE” (Connected, Autonomous, Sharing, Electric). It is necessary to move from the “hard” industry, which competes through productivity gains to steadily manufacture high-quality cars, to the “light” industry, which has become IT (information technology) intensive. What was a simultaneous equation with one variable has now become treble the pain.

HORIBA has the largest share of car exhaust gas inspection equipment in the world. The main business is conventional car-related products.

Electric vehicles will be the mainstream in urban areas. However, the combustion type will not disappear in areas with harsh climates. Regulations will also become stricter. However, it is not a growing market, so I would like to expand the CASE field.

How to secure human resources is very important. In 2015, we acquired a British company called Mira (which supports the development of automobiles). We wanted the excellent R & D unit of about 600 people, but it also had test equipment related to CASE. Mira’s test track has research bases for automobile manufacturers such as Toyota (automobile) and major parts manufacturers, so tests and research can be done together.

The company motto is “Joy and Fun”, but is that feeling the same even with the coronavirus?

Now more than ever is the time to have “joy and fun”. All managers are at a loss now. Even so, we don’t feel so sad because we are working in various fields under this company motto. “Fun” does not mean “funny” but “interesting”. With that idea, we shifted our direction. It’s not absolute, but I feel that this helps us be responsive.

It is necessary to strike a good balance between being extremely advanced in a specific field and expanding the range in order to foster new businesses?

To be honest, I don’t think this is managed properly. But that’s what’s interesting, and it’s made up of the enthusiasm of each unit. Trust is at the base. For example, if you are studying optics, you can think of many people who would be good to consult with within the company.

It is unreasonable to expect people who are developing the products that are profitable now think about what the future needs will be. There is no Superman in the world. In many cases, human resources are crushed in search of Superman.

What kind of human resources are you looking for?

I often say that I don’t want a guy who has a good memory, that is, a guy who just graduated from a good university with good grades. Some of the students who are considered to be excellent in the world outside join us, but from our point of view, they are also “stupid” children (laughs). I often join in on the quiz shows for highly educated people on TV, but they are just competing for memory and have no sense.

What does ‘sense’ mean?

Whether you are interested. That is, whether you can do “joy and fun” However, if only “sharp angled” human resources are hired, the company will collapse. That is the balance.

In order to maximize the breadth of the business, it is necessary to have an organizational structure for that purpose.

Now, the biggest issue is the wall between each department. In a pyramid-type organization, individual departments do their best, but there is no interface to connect the results. But if the organization is flat, it’s not necessary. It’s in a mixed state. Instead, the person above needs to be a Superman who can figure out where and what is going on (laughs).

Is the solid financial structure with an equity ratio of over 50% also a factor that guarantees the realization of “interesting and funny”?

Companies with weak internal reserves will have a hard time during coronavirus. When it was said that it was bad to retain earnings, I thought that retained earnings should definitely be increased. This is to ensure that opportunities for M & A (merger / acquisition) are not missed. If you have to ask the bank for money, it may be too late and the target is acquired by someone else.

What do you see as the challenges facing the Japanese economy now?

We manufacture all the key products such as detectors, filters and electronic boards in-house. The problem with Japan is that we have go outside to get the basic science for these key products. You cannot apply knowledge if you do not have the basic science. Nevertheless, Japanese industry and academia are only doing applied science.

We have R & D units in France, Germany and the United States because the academia of these countries never let go of the basic science. Not only is China accumulating product know-how, but it is also conducting basic research. China is the best-selling market for the latest optical analyzer developed in France. It’s neither Japan nor the United States. We need to be aware of the fact that China is doing this very thoroughly.

It is a worry that China’s technological capabilities are rising rapidly.

Japan has not lost yet. I just don’t know after 4-5 years where we’ll be. They are thinking very clearly about the combination of academia and industry. The winners and losers in a battle of comprehensive strength are becoming clear. How do you get around this? I don’t like the word “niche,” but we’ve survived because we’ve put more people and money into a specialty than a giant company.

The Japanese, and Japanese technology and schools are excellent. However, various regulations and past shackles are in the way. For example, why does the faculty council have personnel rights even at universities? At Tsinghua University in China, the top management is steadily being replaced with excellent human resources. But in Japan, once you get tenure, you stay in academia until retirement. This is such an unfair situation.

Are there any other obstacles to your competitiveness?

If I weren’t Japanese, I would have headquartered in California, USA, and the company would have been three times as large as it is now. Taxes are high and fixed costs are high in Japan. Our main medical base is located in France because of problems with Japanese regulations. We just pay lip service to “deregulation” and in the meantime Japan declines.

Industry-academia-government must think about industrial policy and decide what to make a strength.

Even if the government and others hold meetings to gather the top executives of large companies, they cannot take the plunge because they have a company. When I first became President I was called by the Ministry of International Trade and Industry (currently the Ministry of Economy, Trade and Industry), and when I talked about what I thought, I wasn’t called on again. The people around me just gave textbook answers.

However, the current Ministry of Economy, Trade and Industry is different from that time. What is worrisome is that bureaucrats who are trying to reform in line with our opinion tend to be off the career track.

Do they not want to change?

Perhaps they prioritize their own lives rather than the country. The sense of life or death of officials and politicians of the Meiji era is not there. I’m afraid that there is no sense of crisis about the fact that Japan is buying in more and more technology now.

China’s “brain” is talented people educated in the United States. There is no brain in Japan. People who are active (at the forefront) don’t end up leading government councils. Even if the technology and the times change, Japan still has excellent human resources, but they cannot “overtake” the incumbents. It’s the same with the top executives of large companies.

Because the term of office is fixed, the number of “salarymen” in top management has increased.

There is absolutely no business that will produce results in 6 years [the usual stint as President of a Japanese company] after investing from zero. It just means continual losses.

It takes at least two years for our products to be researched, tested, designed and finalized. It will be five years if the basic research is redone. It will take another 2-3 years to make a profit from it. Many things can be done with technology and machines, but this is useless if you do not develop people as well.

When the top executive who started a growth business retires after six years, and that business is making losses, he is said to be the “worst executive”, and when the next top executive harvests from what his predecessor has sown, he is celebrated as “great”. That shouldn’t be the case.

Don’t avoid developing leaders

What does it take to enable top management to think about things in the long run?

Japan is overwhelmingly strong in terms of both technology and human resources. The only weakness is the top. The United States and China are working hard on how to raise the elite. If we don’t train leaders, society won’t progress. On the other hand, in Japan, “elite” is a forbidden concept. In Japan, both politicians and business owners are a disorderly mob.

Japan is in a very dangerous state now. It has become a bogus democracy. True democracy has competition, and everyone is different. In the United States, they first educate elementary school pupils about how different each person is. But in Japan, it’s like “stop it, you’re annoying the old guy.” The responsibility of the media is also heavy.

It’s rare for a person at the top of a listed company to have a beard.

I nearly died of hepatitis when I was about 35 years old. Until then, I was just being the diligent president’s son. But at that time, I thought this is a turning point and I thought I would live a life where I do what I think is best, no matter what others say. My beard is a proof of that. From then on it became a lot easier.

You don’t know what works and how it works.

It feels like God only knows the future (laughs). However, there is a belief that we will make the best decision at that time by listening directly to the stories of people on the front line. I’ve done my best so I can’t help if it doesn’t work. However, people end up worrying about seeking more than the best.

You end up just wanting the correct answer.

The difficulty of management is that there is no correct answer. Everyone has the illusion that there is a correct answer, but there isn’t. The answer will come.

Side note from the interviewer Higashi Masaki

I don’t know if it’s because Japan has become richer or there is more inequality now, but as Mr. Horiba points out, “how individuals live” rather than the desirable way of organizations such as countries and companies should be has become increasingly the priority. It is important to note that the pursuit of personal well-being can sometimes be inconsistent with the interests of the organization.

For example, there is a tendency for top management to change and quickly write off assets of unprofitable businesses to generate a deficit. Then their predecessor has not made a loss, and the successor is certain to recover in a V shape during his term. The rewards for the two executives may be good, but is the timing as an organization optimal? As the mobility of talent increases, the relationship between individuals and organizations can become more difficult.

Japanese companies need a strong employee brand to attract globally minded employees

I spoke to a group of Japanese managers in London last year on the topic of my last article “I love Japan but I don’t want to work in a Japanese company” – an attitude I have heard from young Europeans who have studied Japanese at university, or worked in Japan for a couple of years on the JET scheme, or simply became fans of Japanese culture through a love of anime and computer games.

They don’t want to work for Japanese companies because they think they won’t have a fun and fulfilling career. They worry that there will be lots of overtime, bureaucracy and an oppressive hierarchy – and that Japanese companies in Europe are mostly dull, engineering sales subsidiaries.

My recommendation to the Japanese managers in the audience was to strengthen the “employee brand” in Europe, to make it more appealing to those young people. Many European veterans of Japanese companies have told me that they like working for Japanese companies because they are different, interesting, quirky, more “human” and long term in orientation rather than the standardised, numbers driven, short termist culture of many Western multinationals. Japanese companies should also offer short term secondments to Japan, so that their non-Japanese graduate hires can build networks and participate in decision-making and so develop their careers.

I realise it is tough for Japanese managers in Europe to ask their Japanese headquarters to adjust their employee brand just to appeal to overseas recruits, when Japan headquarters probably think their priority is to hire the best globally minded Japanese graduates.

So I showed them some research from Japanese recruitment company DISCO’s Caritas Research 2020 survey of Japanese students graduating from foreign and Japanese universities. It illustrates that the needs of Japanese students from foreign universities are similar to those of European students.

Whereas graduates from Japanese universities preferred a job which will provide them a secure lifestyle, would rather work in Japan rather than overseas and to work for one company for a long time, the preference of Japanese graduates of foreign universities was for a job which helped them realise their dreams, paid well, and would prefer to work overseas rather than stay in Japan.

Apart from strengthening the employee brand and offering more attractive career paths, another recommendation I made was that management training was needed for Japanese expatriates in leadership, giving feedback, managing diversity and being inclusive when managing Europeans.

I was of course hoping this would lead to more business for my company, but judging by one of the managers who approached me afterwards, it might not be for the reasons I expected. The managing director said his company was 80% Japanese, but there were big communication gaps between the younger generation and the older, between those who had graduated from foreign universities or lived abroad, and those who had mainly worked, lived and studied in Japan. Clearly Japanese companies are having to adjust to different mindsets amongst Japanese employees too.

A video of Pernille Rudlin’s presentation on this topic is available on the Rudlin Consulting YouTube channel here in English and here in Japanese.

The original version of this article was published in Japanese in the Teikoku Databank News. Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” is available as a paperback and Kindle ebook on Amazon.

“I love Japan but I don’t want to work in a Japanese company”

Japan is more popular than ever amongst young Europeans, who have become familiar with it through anime and manga, or love of Japanese food. Yet “securing human resources” continues to be the key operational challenge for Japanese companies operating in Europe, according to JETRO’s annual survey.

Young people love the playful popular culture of Japan but they assume that this is not going to be the Japan they will experience if they join an engineering and manufacturing oriented Japanese company.

A more serious reason for not wanting to join a Japanese company is the lack of career development opportunities, when it looks like top management reserved for Japanese only. The larger Japanese companies have made efforts to overcome this by having European or global graduate recruitment and training programmes, often involving spending time in Japan.

I suspect it is the medium to small sized Japanese companies who are having the hardest time recruiting the people they need. Their European operations are still basically sales arms of the Japan headquarters. This means when they hire qualified engineers, they are disappointed that the job is more sales than engineering in content.

Japanese companies in Western Europe are most in need of management personnel but are facing already high labour costs. Japanese companies in Central and Eastern Europe are most in need of factory workers and cite the rapid growth of labour costs as their biggest operational challenge. Presumably they are having to compete with better known Western companies who are also facing a tight labour market. The obvious solution is to offer higher salaries, but that of course undermines the economic rationale of have manufacturing in Central and Eastern Europe.

Rather than engage in a price war for scarce management or technical staff, Japanese companies need to offer something different and attractive, which brings us back to the Japanese popular culture loved by young Europeans.

I was surprised recently that the European participants in my seminar who were 15+ year veterans of a Japanese technology company listed “the eccentric, child-like mindset” as one of the positives of working in a Japanese company. My 17-year-old son also noticed this on his first trip to Japan with me last month – and happily joined in by buying a Pokemon Piplup plushy and a Shiba dog pencil case which now have pride of place amongst his philosophy, maths and economics textbooks.

“Strengthening the company’s brand” was the top initiative selected for selling products and services in Europe in the JETRO survey. But this should be less about advertising to customers, and more about having an employee brand that appeals to young people. They will then be able to see a future for themselves where they make, design, manage or sell on behalf of a Japanese company, and have fun at the same time.

A video of Pernille Rudlin’s presentation on this topic is available on the Rudlin Consulting YouTube channel here in English and here in Japanese.

“There is no point in workstyle reforms if you don’t change everything at once” – Fujitsu’s President Tokita

President Tokita of Fujitsu was interviewed by Saeki Shinya of the Nikkei Business magazine in August 2020. The beginning of the interview focused on the impact of the pandemic and China on Fujitsu’s business but the bulk of the interview was regarding Fujitsu’s recent announcement of various workstyle reforms (the English translation of hatarakikata kaikaku, a government led initiative to change Japanese workplaces).

Tokita felt Japan was unlikely to recover economically from COVID-19 until the end of FY 2021. As for China, clearly this was a delicate subject and Nikkei Business had to issue a correction to how they described what Tokita said. He said the progression of nationalism should not be welcomed. It would be disrespectful to say it’s a great chance for Fujitsu if the USA or Europe move away from Huawei, however the need for a secure communication infrastructure is important, regardless, for a more resilient society, and this is helping Fujitsu employees to “reset their mindset”.

The Q&A regarding workstyle reforms I have translated as below:

Q: Why did Fujitsu announce work style reforms such as a 50 percent reduction in office space, the abolition of commuting passes, the introduction of telework allowances and job-type employment (to assign and evaluate human resources after clarifying duties such as roles and skills to be fulfilled) all at once?

Mr. Tokita: It just happened that way – actually I narrowed down the scope somewhat.

In the first place, we didn’t announce it in July just because of coronavirus. We have been introducing telework since 2017, and we had already introduced a job type system overseas – only Japan was different. Since I became president last year, I realised Fujitsu’s biggest value is that its 130,000 employees can move in the same vector. Therefore, I wanted to unify the way we work, and we thought that we should utilise good governance as a global company.

Q: You had experience of being assigned to Europe – you had doubts yourself about the difference in personnel systems in Japan and overseas?

Mr. Tokita: My desire for globalization was strong. In fact, I hated the phrase “one Fujitsu” when I first became president. It was used because we were not “1” but there was no point in using it like a slogan if behaviours don’t change. I used it officially for the first time in June when we celebrated our 85^th birthday, because our internal systems and communication have now improved, and we are convinced that it can happen.

Work style reforms have been carried out in many different ways. There are also criticisms that the results based system failed and there were people saying “how much longer are we going to use man-months as a basis for calculation?” I understood all of this. That’s why this time it happened all at once.

So far, we have been reforming little by little. Because it is a large company, it is scary if the change is too big. However, the reason why it did not work was that the personnel system itself had not changed in nature. Changing if you only change the structure and operations superficially will not work. I decided to go with the idea to change everything at once.

Q: Isn’t there an overlap between the new “job type” system and the failed results based system [known as seikashugi in Japanese – introduced in many companies in the 1990s]?

Tokita: There are many viewpoints – some say the results based system failed, and I haven’t heard many stories of it succeeding.

However, a job type system will be different from company to company and for Fujitsu. Evaluations are no longer top down. We have no choice but try to make sure it will lead to Fujitsu’s growth and sustainable business. Of course there are some lessons to be learnt from what happened in the past but I try not to worry too much about that.

Q: What does Fujitsu want employees to do with the introduction of a job-type personnel system?

Mr. Tokita: It’s about each and every employee being autonomous. If the general employees, the managers, the executive, and I are all autonomous individuals, the collective body becomes stronger. Ideally, a strong individual can both work collaboratively and create a healthy conflict. We stopped uniform education by hierarchy and year of entry to the company. Instead, we encourage people to advance their careers through free educational programs online.

Q: How do you get your employees to collaborate once they haves become autonomous?

Tokita: We are currently working with in-house culture change teams. In order to work collaboratively, physical contact is necessary, so it is important to create space in various offices where people can discuss each other’s opinions.

Q: It is said that young people are disadvantaged because they do not have enough experience of the job-type personnel system, what are your thoughts on this?

Tokita: Is that so? I didn’t think it was an advantage or a disadvantage. I know OJT (on-the-job training) was inadequate. Rather, I hope that young people will be able to take on challenges without any restraints.

Q: Some say that the reforms, which will reduce office space by 50 percent, are just about cutting costs.

Mr. Tokita: It’s not just about cutting the office space in half. It will also cost money for renewal.

The aim is not to cut costs, but to increase the choice of employees. The main objective is to help employees to feel engaged in their work. Whether there is a coronavirus pandemic or not, there are many employees who have problems with commuting time, childcare, and nursing care, and we have been building telework and satellite offices to solve this. It is true that Coronavirus became a driver to push this. But I’ve been thinking about it for a long time. Future behaviours and growth will show if this is correct or not

Q: Many people say that the corona shock will accelerate digital transformation (DX). Isn’t this is an opportunity for Fujitsu, which advocates DX for companies?

Mr. Tokita: I’ve been working longer hours at home so I saw a daytime show which said that digital transformation of medical institutions, public health centers and education is very behind in Japan.

However, DX does not take root just by promoting systemization and IT. The essence of DX is whether each and every one of us can be autonomous, acquire skills, collaborate, and create new value. This is also a challenge for Fujitsu. No matter how much IT as a tool is implemented, it will not be the whole solution.

Q: So DX hasn’t taken root in Fujitsu yet?

Mr. Tokita: I don’t think it has.

It doesn’t make sense for DX only to develop in certain industries. Fujitsu has been promoting IT by forming teams across industries. It will not function unless the whole aspect of an issue is grasped, rather than small points, and the issue is addressed as a society.

Coronavirus has increased the need to do this, but we need a system that allows us to collaborate properly. It’s easy to standardize in the IT industry, but without a deeper or higher level of common understanding of rules, no one will be able to make it work.

Q: Japan as a whole needs to deepen its understanding of DX. What should we do?

Mr. Tokita: It will be difficult to discuss on a national basis. We have no choice but to move forward with small communities and companies. In that sense, Fujitsu has a responsibility. We are a global large company and have a mission to solve Japan’s problems because we are based in Japan.

Inside the company, I often say, “Think about what it means to work for a large company.” Large companies have large company sized responsibilities. A large company can make big ripples in society – that’s a kind of responsibility.

Mr. Tokita: We will make use of our own knowledge and experience. This will make Fujitsu stronger. Companies that have accumulated their own experience and can turn it into a business are definitely stronger. If you don’t do it yourself, you’ll end up in running a race in borrowed shoes, and you can’t be a strong company.

If you want to hear more from Mr Tokita, he’s one of the keynote speakers at the Fujitsu ActivateNow digital event in October – more information here

If you want to understand further about the history and changes to Japanese corporate HR systems, I made a 5 minute video on this for my Japanese Business Mysteries Explained series – here.

Learning from lockdown: What entertainment at a distance taught me about teaching at a distance

I’ve often felt that what I do as a trainer was similar to a stand-up comedy routine. Not so much that I try to make people laugh (although I do) but that I use the same tricks of the trade as a stand-up comedian – a core idea running through, the seemingly irrelevant anecdote that ends up making a key point, the call back at the end that reassures me and the audience they’ve been paying attention. I know I’ve had a good session if I’ve hit my marks – not in the literal meaning of standing in the right spot, but getting the rhythm and timings right, covering all the material, sensing the key messages have chimed with participants.

Watching some of my favourite entertainers cope with social distancing has been illuminating. It has shed light on the dirty secrets of how far entertaining or teaching at a distance can replace getting together in germ filled rooms.

The five dirty secrets of education and entertainment

I knew, but had not articulated, these dirty secrets to myself. I have struggled for around 20 years to make online learning and knowledge sharing work, believing it to be the future, but at the same time I kept having misgivings.

One of my favourite stand-up comedians, Stewart Lee, toured a show a couple of years ago called Content Provider – the brutal digital term for entertainers and teachers. As Lee pointed out in that show, the main way entertainers make money these days is by going on tour delivering the content in person, not from digital or hard copy sales. TV can be a steady earner of course, but Lee was never mainstream enough to attract consistently big bucks. He even supplements the revenue from tickets by buying up second-hand copies of his CDs and DVDs from charity shops and eBay and selling them in person at a profit in the auditorium after the show.

But, as he acknowledged in his most recent show, touring is exhausting, particularly as you get older. My fellow trainer in Germany in a recent Zoom call said she felt more relaxed than she had in some time, despite the lockdown, because she no longer had to travel so much for work. It’s not just the physical but also the mental exhaustion – you wonder if the same old shtick is going to cut it anymore.

So our training team is now discussing what the best way is to deliver our content, without so much travel, resilient to any social distancing, but still make money and stay fresh. Which is why we need to confront the dirty secrets head on.

My recent career has been in providing training to adult learners, but I come from a globally extensive, long line of teachers of all age groups. From talking with them about their experiences, I’m pretty sure that most of these dirty secrets apply to children’s education too.

The good news is that there are plenty of technologies when teaching or entertaining online that we are being forced to adopt which are worth continuing with even after we can all be in the same room again. The future is going to be a blend of online and offline presence.

The biggest dirty secret is that it actually costs quite a lot in terms of effort, time and therefore money to create good learning and entertainment that works at a distance. And yet the expectation is that it should be cheaper.

Why distance costs so much is due to the other dirty secrets:

1. We feed off an audience

This is why teachers are struggling to respond to the current crisis. They know that just slapping up slides online with your notes, or teaching a normal lesson via a webcam and providing a recording of it will not create effective learning experiences. But they don’t have the time to do much else.

The issue is not just participant engagement, but that bouncing off an audience is where teachers and entertainers get their energy from. You can spot when an audience is not engaged when you are in a room with them, and adjust accordingly.

When TV entertainers like John Oliver or Stephen Colbert initially tried to do their shows without live audiences, the result was very flat. You could see the desperation in their eyes. It was easier for team chat shows that transmitted live like Channel 4’s The Last Leg. They had already made use of Twitter in real time pre-COVID-19 to get audience suggestions and jokes from beyond the studio, so they made even more use of this to spark off their own interactions in the studio.

Even non-live shows are finding ways to use online tools to engage with their audiences – Graham Norton’s Red Chair stories are now delivered by audience members from their own homes, via their webcams. Many comedy chat shows have found that doing short interviews via webconferencing with celebrities, in their pyjamas, with pets, kids and other props, showing human frailties, can recreate at least some of the warmth and humour they crave.

For teachers and trainers the most obvious online tool to create engagement is polling. Polls can make sure people are paying attention, but also create a connection between participants and give the host a flavour of the needs and views of the audience. Webcams, Q&A and chat functions all help put the life back in to webinars – and yes, why not bring in props and pets too.

If you are creating learning that people consume in their own time, it still needs to be interactive – I’ve incorporated polls, quizzes and self-assessments into our online learning modules.

2. But they’re not that into you

If you haven’t got a live audience you can interact with, you need to keep it short, and break it up. Graham Norton’s TV chat show used to be 45 minutes long pre-Covid, but is now a tightly edited 30 minutes of a monologue, a brief interview, some music, funny clips and the Red Chair.

I view the online equivalent of our 3-hour classroom-based training course as being a 1.5 hour webinar – and I put a break in half way just as I would for a classroom based session. Similarly, our 6 hour, one day course can be delivered as two 1.5 hour webinars on separate occasions. The online modules can be taken in the meantime, allowing the second webinar to be more of a review and discussion.

It’s generally considered that 45 minutes is the maximum you can expect an adult to pay attention. I’d assume it’s even less for children and for those of us who are used to consuming social media in short videos and 280 character chunks.

But schools do seem very wedded to the idea that a lesson should take 35 to 45 minutes and that it’s an important life skill that children stay still and quiet for this time. I really resented being called into school to be told off for the fact that my son refused to sit nicely on the story mat for half an hour aged 5 or that he’d yell out the answer to a question without waiting until the teacher called on him. My suggestions that it was unreasonable to expect children of that age to stay still without some kind of interactivity, and that they would be better off asking open ended rather than factual questions did not go down well. But then I regularly got thrown out of my Japanese school aged 7 for talking in class. Japanese schools are even more one-way information teaching machines than British schools. Ironically, my son’s school reports now complain that he’s too quiet.

So 10-20 minutes for an online “class” is surely more realistic than expecting children to sit through a teacher talking on a webcam on Microsoft Teams for 40 minutes. This seems to be what my husband and his fellow teachers are now doing – everyone logs in, the teacher asks how they are and has a chat, explains the assignment and then lets everyone log out again and do the assignment in their own time. Getting them to hand the assignment in seems to be a whole other problem, however.

Realising that my audience is not that into me either, I recently re-edited all our online e-learning content so no video/screencast that I have narrated is more than 10 minutes where possible. The most popular YouTube video I have narrated is “Japanese Business Mysteries explained in 5 minutes”, so I will be doing more of those in the future.

3. They are paying for the certificate, not for the love of knowledge

But that brings me to the third dirty secret. Not only are they not that into you, they’re not that into your content either. They’re either learning because it’s compulsory or to impress their employers. If they’re school children or students, the main motivator is passing the exam.

This is where the analogy with entertainment ends, I suppose – we consume entertainment for insights, emotions and to know we are not alone. There is no certificate for this but therefore there is a limit to how much a person will pay to be entertained, and they are always looking for ways to get their kicks for free. Which is why I sympathised when Stewart Lee confiscated a mobile phone from an audience member trying to film his routine at the last gig of his I went to.

Teachers at my son’s school have been dutifully setting further reading, challenging maths problems and suggesting resources to prepare for university for the year group affected by the cancellation of the UK national A level exams. Only work before March 18^th will count towards the final grade, to ensure that children who are not able to access online learning are not penalised.

Despite the teachers’ efforts, I believe most engagement from that year group is through an app that one of them developed which automates logging in to Microsoft Teams – and occasionally they edit the message so it looks personal.

The only pure online training courses that sell are the ones that relate to compliance and are compulsory, or certify that you have acquired IT skills. This is the kind of knowledge acquisition that can be proved through online multiple-choice tests or online exercises. These courses generate a certificate for the learner and lots of lovely data on the company’s Learning Management System, to show what percentage of staff have taken the courses, passed the tests or said their work efficiency has improved, and then they can generate some kind of Return on Investment on training budgets to keep the CFO happy.

Individual learners are willing to pay for a certificate they can add to their CVs but otherwise expect content to be free. Massively Open Online Courses, or MOOCs, have a very high dropout rate. Coursera, an online learning platform mainly for university courses, has a business model based on exactly this understanding of the learner mentality. The University of Tokyo course on Japanese art and literature I took was free but they send you guilt provoking emails if you don’t complete each module within a certain time. If you want a certificate of passing and completion which you can load onto your LinkedIn profile, you have to pay. And so, although I took the course for the love of acquiring knowledge – reader, I paid.

4. It’s the stupid technology, stupid

Coursera have done a great job of making the user interface as easy as possible. This is where some of the benefits of being online come in. So long as firewalls and bandwidth do not intervene, it should mean greater accessibility to knowledge for people all around the world. Coursera videos are no more than 10 minutes long, each with a short quiz at the end to make sure you were paying attention. As well as the slides and a video of the professor giving the lecture, there is a transcript with a cursor indicating where the professor has got to in the lecture underneath the video. So if you haven’t quite understood, or your attention wandered, you can check back, rewind and pass the test.

Non-native speakers of English have been far more enthusiastic about e-learning and webinars than native speakers, in my experience. They like the multiple ways to absorb the information – slides, transcripts, aurally and offline. Native English speakers can help during live webinars by summarising key points in the chat function. The host also has far more control over shutting up domineering fluent speakers and making sure the shyer people are brought into the conversation – including through private chat if they’d rather not speak out publicly.

But – not everyone has the technology, bandwidth or budget to participate equally. Teachers at my husband’s well-funded private school have apparently broken down in tears from spending hours marking work online, only to see it disappear into the ether.

Maybe it’s their fault for not backing up, maybe the school has terrible connectivity, who knows. But it brings it home that things must be a hundred times worse for schools and homes where good technology and connectivity is just not affordable or people don’t have the technological knowhow to find solutions.

I realise this article may attract a lot of snark from specialists who have been studying interactive learning design for years, and know way more than I do about how to design learning paths and interfaces. In my defence, I did actually manage a team of people with that knowledge and AI programming skills, way back in the day. Our aim was to get away from directed learning and move towards self-directed learning. That is still my goal.

I attended various learning technology conferences too – where all too often a seminar entitled “making xml work in a corporate learning environment” or some such would end in a spectacular technology fail and blue screens all round. So yes, properly designed learning experiences are available online, but we are still a long way from the user or the technology being smart enough.

5. Fear of eating ourselves

This is the deepest darkest dirty secret. We worry that if we do too good a job with online content and the technology does improve enough, we will no longer be needed. Teachers and entertainers want to be needed, even loved – and this is what we get paid for. This is known in business as self-cannibalization – making a cheaper version of your product or service, which then kills your lifeline.

But we should not despair, there are reasons why eating yourself doesn’t work.

The social experience

If audiences can get the same experience from a CD, DVD or book, why do they continue to go to gigs, concerts, shows? Partly it’s the social experience – the thrill of being in a crowd of people who are going through the same emotions. The closest I have seen during lockdown to recreating the social experience of a concert is TimsTwitterListeningParty – where Tim Burgess of the 1990s group The Charlatans sets an album for everyone to listen to and tweet about in real time – but the real joy is that the original artist also tweets about the making of the record or photos of the band, in synchronicity to each track being listened to.

It’s also for the social experience that people still want to attend classes, despite moaning about being away from their real work. Even if children say they hate school, they want to be with their friends – and it’s usually because of a bad experience of being with others, such as bullying, that makes them hate school the most, rather than the teaching. And of course the teacher can do a lot to set the tone and clamp down on bullying.

Squirrel!

Preferring to be in a room with others in order to learn is also an acknowledgement that if you’re not trapped in a class, you are very likely going to get distracted.

Also, in the corporate world, I have found that even when I was on the receiving end of poor-quality training, just being away from the desk and having time to reflect had a value in its own right.

The best concerts, exhibitions or plays are where you feel fully immersed – “lost in another world.” It’s not so easy to do that at home where daily chores and worries intrude.

Applicability

A close second to being bullied as a reason for hating school is that it’s “boring and pointless”. In other words, children cannot see how what they are learning applies to their own life.

Many of the TV shows that have done well in the UK during lockdown are ones which allow us to live vicariously (and maybe thereby learn about) cultural experiences – Race around the World, The Repair Shop, or Grayson Perry’s Art Club

But not all teachers or subjects translate well to video, and learners still need to be able to interact with the teacher so that they can understand how to apply the knowledge to their individual situation. You can give individual attention and co-create online, but again numbers need to be limited to about the same as a classroom size, to allow proper 1:1 interaction.

Authenticity

The audience or learner wants authenticity – they can spot a mile off when a teacher or entertainer is phoning it in. This is why a lot of e-learning is so dry – actors voicing narratives about how to be a leader just do not resonate. The most popular YouTube videos are where the person is narrating in real time as they play a game. The first video that came up when I was searching for help on how to cut my son’s hair was a hairdresser in a barber shop cutting hair while explaining his technique.

We insist at Japan Intercultural Consulting that all our facilitators have authentic experience of working in Japanese organisations and also have lived in the counterpart culture. We also encourage our facilitators to tell stories from their own experiences during the training. Our participants need to feel that we have “been in your shoes”. But the only way we can be sure this happens is to interact with participants, to understand their experiences.

Apprenticeship

Parents are struggling trying to do home schooling and work at the same time. Schools were invented partly so people could go to work. Before universal education, only rich people could afford home tutoring, which then perpetuated the professional elite path of going to university to become a lawyer or clergyman.

The only way to work from home and teach your children at the same time if you are not rich enough to afford a home tutor is to teach them through the work you are doing. This was how craftsmen in the past educated their children – they were apprenticed to their parent or to another “master”. The modern-day equivalent would be getting your children to alphabetize your files, or helping you design a spreadsheet for your sales data – or in my case, getting them to edit and add subtitles to my videos.

Japanese companies are still resistant to classroom-based learning and even more so to working remotely, particularly for soft skills. The reason for this is that most Japanese companies are family style in mentality – learning is done through apprenticeship and on the job learning.

Extreme cleaning

I admit I already loved Tidying up with Marie Kondo on Netflix, but it wasn’t just because it added to my Japanese cultural expertise – my obsession with TV decluttering shows stretches back to House Doctor in the 1990s and lockdown has impelled me to binge watch Call the Cleaners. There is something very cathartic and inspiring about watching other people confront their fears and phobias, purge and then move on with their lives, and this is what I needed to do with online learning.

Although we may have a sick feeling in our stomachs about the threat of technology, teachers and trainers will never have to eat themselves. So long as we are authentic and know what we are talking about, then we can help the learner apply the knowledge for themselves, and recreate experiences. We can set scientific experiments, maths problems and history essays to be done away from the classroom, in the knowledge that they need a teacher to guide them and check the result.

If, like now, we can only teach online, then rather than trying to dump a mass of information online or learn how to build an interactive module, we should focus on creating good offline assignments that guide the learner as they explore, apply their new knowledge and recreate experiences for themselves. But learner numbers will be limited if this is to be supervised and checked properly. Ultimately, the cost per learner in terms of time and salaries is not going to be much cheaper than a classroom-based experience if the assignment is well framed and resources are properly curated.

A teacher or entertainer in a germ-infested room full of people is still the most cost effective and emotionally impactful way of transmitting knowledge, insight and experience. Our enforced isolation as teachers and entertainers should be a time to declutter, focus on what sparks joy and maybe add one or two new gadgets into the freed-up space.

Farewell egalitarianism – Sony introduces salary gaps for graduate hires

A 25 year old Sony employee, with a postgraduate degree in mechanical engineering and skilled in multiple programming languages was promoted to job grade I3 within three months of starting at the company. This meant his salary was increased by Y50,000 (US$460) a month and he can also qualify for higher bonuses. This would not have been possible until at least two years had been completed at the company previously.

This new system was introduced by Sony this year, whereby ability and work effectiveness are assessed and a grade from I1 to I9 is assigned. Sony had already restructured its management level from 2015. 40% of all employees were in management grades, due to the egalitarian, seniority based promotion system, but many were “name only” managers. The “name only” managers were all demoted to non-management grades.

The mura mentality

Sony has to compete with GAFA (Google, Apple, Facebook and Amazon) for top talent, so the old Japanese mura (village) mentality where everyone is a member of the village, and treated equally regardless of their work content and where they work, with lifetime employment and seniority based promotion was not sufficiently attractive.

Now those who wish to join Sony can choose from 70 possible entry routes – those joining from university can choose 3 from the 70. It is not all controlled by HR as in the past – individual business executives are also involved in the recruitment process. They proceed straight to the job they have applied for, rather than go through a general training period.

But not firing

The Nikkei wonders how this will impact firing, not just hiring. With the Japanese mura system, the ability to dismiss employees is severely restricted. Sony has said it can demote or refuse to promote people, but it will not fire them. Keidanren, the Japanese employers’ association, says that while it is generally in favour of HR systems becoming more focused on role content and performance, it thinks the Japanese approach of reassigning people to other jobs if they are not performing in their current role is still preferable.

Category: Human resources