How Nidec reduced overtime by improving communication

Manufacturer of electric motors Nidec was famous for having hard working employees who didn’t care how many hours they put in.  The founder, Shigenobu Nagamori, himself said “I only take a holiday on New Year’s Day”.  Now, according to the Nikkei Business magazine, Nidec is undergoing a revolution where going home on time is the norm.

Nidec started a project last year to promote the better utilization of female employees.  Overtime working at Nidec’s headquarters had been on average 30 hours a month.  The first step was to get senior level managers to go home on time.  This immediately decreased overtime by 30%.

Then Nidec made it necessary to ask managers for permission to do overtime at the morning meeting.  The employee had to give reason, which the manager then verifies.  It turned out many of the reasons given were for doing unnecessary work.

Then from April 2016, Nidec looked at cutting the amount of time meetings were consuming.  Up until then, people seemed to be better evaluated the more documentation they provided for meetings.    So Nagamori asked people to reduce the amount of documentation.  Then he asked that meeting times were reduced from 60 minutes to 45 minutes or from 30 minutes to 25 minutes. As a consequence overtime was reduced by 50%.

The main reason for the reduction in overtime was due to the improvement in frequency of communication between managers and their team, says Ishii Takeaki, Senior Vice President.  If a manager is out of the office or in meetings a lot, then there is an accumulation of things for which their approval is needed.  “Because shorter meetings means we have created some gaps where the manager can return to their desk, the whole team can do their work more smoothly.”

It also leads to lower labour costs.  But Nagamori has other objectives.  If work methods are at a global standard and productivity improves as a result, then people who can compete on a global level will be developed.

According to Nagamori “the most complaints we get concern the fact that our engineers cannot communicate in English.  So we want them to finish work on time and then go and study English or Chinese.” Nidec is building a global management university for its staff all around the world to help with this.

They intend to put the money saved from overtime reduction into giving bonuses and pay rises to staff whose productivity has improved.

I have to admit to scepticism about whether this is really working the way Nidec claims it is (there may be a lot of covering up overtime in order to comply with Nagamori’s diktat) – and a group of Japanese at a car manufacturer also raised their eyebrows in incredulity when I mentioned it to them.  However I like the point that improving communication opportunities with managers during working hours does help reduce overtime.  I certainly noticed when I worked in Tokyo that many people did stay after 5pm because that was the only time you could get to talk with the boss.

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