Tag: nidec

The latest in Nidec President Nagamori’s string of acquisitions – a university

Shigenobu Nagamori, the founder of Nidec is interviewed in the Nikkei Business series on how to “wake up Japan” about his latest acquisition – not a company this time, but a university – Kyoto Gakuen. He feels that Japan has become too brand name obsessed about higher education and that 18 year olds should not have their future decided simply on the basis of their standardised score for the university entry exams.

“You get into university in Japan on rote memorization and exam technique, so when you graduate, you have a rather fake identity, with no real strength, so don’t know how to survive in society.” Nagamori is aiming for a university where “you graduate with fluent English [science graduates do not have to study English at university in Japan] and specialist skills that you can put to immediate use”.  He has changed Kyoto Gakuen’s name to the Kyoto University of Advanced Science.

“Japanese university students aren’t fully formed human beings. They don’t know how to speak for themselves.  They fall asleep in lectures or mess about on their smartphones. This has to change, starting with the teachers.  That’s why I became the chairman of the university. Lectures will be in English.  1/3 of the teachers will be foreign. There will be some students who cannot cope with this, so we will have the same lectures in the evening in Japanese.  We had 600 lecturers apply for 30 positions. The evening supplementary lectures wll be given by post doc students or research students. The lectures will not be 90 minutes of sitting down.  There will be a 45 minute lecture and the rest will be doing experiments. ”

“The administrators become the elite in Japanese companies – hardly any technical specialists become CEO. This is completely different to the USA. We also need to encourage overseas study – and encourage overseas students to come to us – maybe half our students should be from overseas. If they achieve good results, we will fund their fees and living costs. If results fall off, they pay half, if they hit the bottom, they have to pay all of it. That’s what we’re thinking. This might seem extreme, but it’s normal in the USA.”

Most of the rest of the interview is about facing the threat from China.  Nagamori finishes by comparing himself to Konosuke Matsushita, the founder of Panasonic. Matsushita developed his management philosophy, and set up the Matsushita Institute of Government and Management , “but I don’t have any interest in politics, so I want to develop people who can set up businesses in advanced science – kids from poor Asian families who can come here to study, and then go out into the world and start something new.”

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Top 30 Japanese employers in Germany – Japan’s appreciation of German ‘monozukuri’ continues.

Although Japanese business people tend to think of Germany as being a fellow “monozukuri” (manufacturing/craftsmanship) country, there are actually proportionally fewer (28%) Japanese companies which are manufacturing in Germany than there are in the UK (36%).*

Of course this has a lot to do with the fact that Nissan, Honda and Toyota have factories in the UK and do not have any plants in Germany – as well as the supply chain of manufacturers that they have attracted, many of whom set up production to be as close as possible to their customers.

The biggest sector for Japanese companies in Germany is wholesale. Automotive wholesale is playing a role here, as Japanese suppliers try to diversify away from supplying Japanese car makers and target European car brands as well. It has been noticeable that one reaction to Brexit by UK based Japanese automotive suppliers is to open a branch or subsidiary in Germany and/or transfer customer accounts and sales functions to those branches.

Like the Top 30 in the UK, the biggest Japanese companies in Germany have grown through acquisition. IT services dominate the top spots with NTT at number 1 thanks to its acquisition of Itelligence, Cirquent and Net mobile, as well as Dimension Data.

Fujitsu – the biggest Japanese company in the UK – is the second biggest in Germany. Fujitsu bought out Siemen’s share of their joint venture in 2008. Fujitsu is about to shut down the last remaining computer factory in Europe – which was in Augsburg, and around 1800 jobs will be lost across Europe.

Duncan Tait, SVP and head of EMEIA (Fujitsu’s own regional acronym – Europe, Middle East, India and Africa) somewhat disingenuously claimed on the BBC news recently that Fujitsu’s regional headquarters had been in the UK for 20 years and that “there was zero intention of moving out of London” like Sony just announced. Actually it is Fujitsu Services that has been headquartered in London, with some offices in Europe, whereas Fujitsu Technology Solutions, the hardware side, was headquartered in Munich, with a rather more extensive network of operations across Europe.

But as Fujitsu shifts, like many other Japanese electronics companies, to IT services and B2B, so the locus of power has to shift to where the customers are. Over 80% of Sony Europe’s turnover was to non-UK EU countries, but this is not the case for Fujitsu Services. Because of Fujitsu Services’ legacy of acquiring ICL in 1990, the UK public sector is still a key customer. So it’s no wonder Tait does not intend to shift out of London any time soon.

More recent acquisitions in Germany by Japanese companies do include a fair number of manufacturers – Mori Seiki has finally consummated its marriage with Gildemeister, Lixil acquired Grohe, Musashi Seimitsu acquired Johann Hay and Nidec continues on its overseas M&A rampage. As you can see from the ranking below, Japan’s appreciation of German monozukuri continues.

Rudlin Consulting can develop a more detailed, customised list of Japanese companies in Europe (for a fee). Please contact pernilledotrudlinatrudlinconsultingdotcom with an outline of your requirements.

*2018 Japanese Ministry of Foreign Affairs – who identify 1814 Japanese companies (this is very loose, they include branches, joint ventures and companies established by Japanese entrepreneurs in Germany) . There are 21 categories including “other”. For Germany the top 4 are wholesale/retail 31% (of 1814), manufacturing 28%, hospitality 7%, IT 6%. UK is 36% manufacturing, 13% wholesale/retail, 8% financial, 8% “other”.

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Nidec – work style reforms are “a bigger revolution than when in the Meiji era everyone changed from wearing kimonos to western clothes”

Shigenobu Nagamori founded electric motor company Nippon Densan in 1973 but it wasn’t until the late 2000s that he started on his overseas M&A buying spree, acquiring the automotive actuators and motors division of French company Valeo.

He began to realise that he would have to change the way Nidec worked in order to succeed overseas.  According to a special feature in the Nikkei Business magazine, he was puzzled as to why Western employees worked shorter hours than in Japan and took more holidays, yet their companies’ performance was better than Japanese companies.

Many Japanese companies are looking to change their working patterns, under pressure from the Japanese government for ‘work style reform’ but “merely reducing hours worked will end in failure”.  Nagamori was looking for a change of mindset.

Unnecessary meetings

One area Nidec tackled was unnecessary meetings. In just 4 months at one of their subsidiaries, Tosok, the number of types of meetings was reduced from 156 to 89, and their total occurrence was reduced from 716 to 440 a year.  The number of hours spent on meetings fell from 533 hours to 240 hours a year.

Meetings that did not have a result were particularly targeted, such as the “related divisions information exchange meetings”.  New rules were introduced such as:

  1. Meetings should only take 45 minutes, or 25 minutes for short meetings
  2. Participants should all be told the purpose of the meeting, the schedule and the expected results beforehand
  3. Only the absolutely necessary people should attend
  4. #2 should be reviewed at the beginning of the meeting
  5. 1 page per topic, distributed before the meeting
  6. At the end of the meeting, conclusions and homework should be agreed, and who is in charge of each action point
  7. The minutes of the meeting should be written during the meeting and circulated within 24 hours after the meeting

Missed deadlines

Another issue that was raised in the search for changing mindsets and work patterns was the continual missed deadlines for prototypes.  Because the automotive industry has become so competitive, car manufacturers were shortening their development cycles. Trying to meet their short deadlines for prototypes was causing much of the overtime at Nidec. There was too much of a gap between the time when Nidec’s engineers discussed with the car manufacturers’ engineers and the order was officially made through the sales people.

So it was decided to make the order official once emails between then engineers reached a point of certainty.  This shortened the gap to starting new development work by 3-9 weeks, with a significant reduction in missed deadlines.

The basis for these changes in Nidec’s way of working came from Nagamori’s appointed successor, Yoshimoto, who had become a Master Six Sigma Black Belt when he worked at GE.

Ensuring women are promoted

Initially Nidec hoped to set a target of women comprising 15-20% of managers by 2020, up from the current 2.8% but this has been revised down to 8%. “There is no point in forcing women to be managers if they don’t want to do it” Nagamori states.  Reforms have been introduced such as being able to work from home, being able to shift working hours 1 hour either side of the set start and finish times and also being able to take holiday in 1 hour units.  These apply to male or female workers, but are intended to make caring for a family easier.

Nidec has also invested in changing work patterns on the factory floor, with robotization and Internet of Things, as well as investing in management development, to empower managers to take decisions and also improve their English ability.

English language and management capability

The feature finishes with an interview with Nagamori, where he asserts that to reduce working hours, you have to improve productivity first.  For example, in Japan it is common to make courtesy calls on customers without any real reason. “It’s not a total waste of time, but it is not directly productive.”

“Japanese productivity is about half that of Germany.  So we need to double our productivity in order to get to zero overtime.  If you just cut overtime to zero, you have to either hire more people or cut salaries.  Both would be a mistake.”

If overtime disappears, then juniors will no longer get overtime pay.  Nagamori remembers a time when he too mainly used his overtime pay to live off, saving all his bonus and salary.  “30, 40 years on, Japanese society has not changed” he points out.  He says an employee wrote him a note to say that he had a loan on the basis of him doing 50 hours overtime a month.  So if he didn’t get overtime pay on that basis, he would not be able to repay the loan.

So he currently tries to give the overtime pay reduction back half as bonus, and the other half as training subsidy.  This is not the same for everyone – those with high productivity get higher bonuses.   “It’s a big problem that currently those with low productivity stay late and get overtime pay and those with high productivity leave and have lower pay.”

“About half of overtime is work that doesn’t really need to be done, so that’s easily got rid of, but the other half is necessary work, and reducing that is not so easy.”

“ The biggest revolution is to get people to recognize that overtime should be zero.  ‘Look at the West, nobody is doing it’ you have to tell everyone”

“It’s not easy for Japanese companies to switch to Western ways of doing things. It’s a bigger revolution than when in the Meiji era everyone changed from wearing kimonos to western clothes.”

Nagamori says the reason for the lack of productivity in Japan is firstly English language ability.  “Phone calls take twice as long and you need to pay for translators for negotiations.”

“Also, managers lack management capability.  They don’t question why their team are doing so much overtime.  They don’t understand what their team are doing.  If they said – ‘do this work and then go home’ then there wouldn’t be so much overtime.”

“In the West there are plenty of positions for specialists, but in Japan there are people who don’t have management ability in line positions.”

 

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Nidec’s Nagamori on the root causes of Japanese corporate scandals.

The founder and President of Nidec Corp, Shigenobu Nagamori has been high profile in the Japanese media (again).  As well as a long interview in Diamond magazine about why all 57 of his acquisitions (many in Europe) have been a success, he gives some punchy analysis in his final column for the Nikkei Business magazine on what the root causes of the succession of scandals coming out of corporate Japan.

“It is the top management’s fault if bad news does not reach them.  If there is something wrong with the production process or sloppiness in quality control, this is a matter of life or death for a manufacturer.  That such important information is not being communicated is because the management is not going to the genba (where the action is) and seeing what is going on for themselves.

4 root causes of scandals at the genba

  1. Nare (becoming used to something) Thinking that a certain level of irregularity won’t be a problem, getting accustomed to it.
  2. Amae (being indulged) – believing that you won’t get found out anyway
  3. Tiredness – when the cost price seems to have reached rock bottom or kaizen has been continuing for a while
  4. Takotsubo (octopus pot – for more uses of this analogy, see our post on octopus appointments) – silos where a problem in one unit is hidden and not communicated to other units

This happens because managers are not ensuring a sense of urgency in the genba.  This doesn’t mean they have to keep pressurising employees.  They should be making frequent efforts to strengthen and pull up the genba.  That’s why they should enter the genba themselves and see for themselves what is going on in R&D and manufacturing, sales.  This will naturally lead to a sense of urgency.

Of course managers set targets, but if they don’t know the genba, then these are just words, and feel very distant to the genba.

The need for “hands on”, “micromanagement” and “making responsible without giving away responsibility”

Hands on means the genba solves problems with the management alongside.  Not just throwing problems at them.

Micromanagement is that managers make decisions about all the issues in the genba.  When I acquire a company that is in trouble, in order to reconstruct it, I check purchasing for even 1 yen. Some people say this will undermine the ability to think for themselves but it’s quite the opposite.  It is to make the employees think, come up with suggestions and work alongside managers to review it.  Not just get told, in a one way fashion.

“Making responsible without giving away responsibility” means that I delegate authority, but I don’t just leave people up to it.  Otherwise the genba logic just becomes stronger and they fail to see what is appropriate overall.  So delegate, but regularly check, very thoroughly.

The importance of developing generalists

It’s also important to develop executives.  Although there is a tendency in Japan at the moment to reject generalists, it’s no good if someone only knows one business area and has no idea about other parts of the business.  While people are young, they should experience management in different divisions in order to become proper executives.

That’s why I am always visiting our subsidiaries around the world.  We have 300 companies and over 100,000 employees so I can’t do this by myself.  So I get other people like our CSO (Chief Sales Officer) to travel around too.  I am visiting somewhere pretty much every week.  If managers had this attitude, the morale of the genba will also improve.  You cannot take it easy.

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Japanese companies divest as well as invest in Europe

The eagle eyed will have spotted that our revised ranking below for the top 30 largest Japanese employers in Europe for the year ending 2016 is not quite in rank order.  Only a third of the reports covering the financial year ending 2017 are available but based on what we can dig out, we can say that acquisition hungry Nidec have topped 10,000 employees in Europe so will be higher than their 2016 ranking.  Dentsu Aegis have also been gobbling up agencies and Bridgestone has acquired a couple of tyre companies in France.

Some of the more established technology brands have been acquiring around Europe too such as Panasonic (Ficosa in Spain, Zetes in Belgium), Konica Minolta (Mobotix in Germany, Dactyl & OMR in France) and Sony (eSaturnus in Belgium, Plumbee and Ministry of Sound and TruTV in the UK).

At the same time, Japanese companies are beginning to consider exiting investments, which is a relatively new development.  Some have had this forced on them of course, like Toshiba selling Landis & Gyr and Westinghouse. Lixil was a new entrant into the top 30, having acquired Grohe, the German bathroom company and Permasteelisa, the Italian construction company but is now in the process of selling the latter to a Chinese company. “It may have been forced to sell assets it had trouble integrating” according to a source quoted in the Financial Times.

Hitachi, having acquired German company Metabo in 2015/6 is now selling it off with the sale of its power tools division to KKR.

Toshiba may well fall out of the rankings as a consequence of selling off its businesses and Takata may no longer qualify as a Japanese company, as it is about to be acquired by Chinese company Key Safety Systems.

For the full report of the M&A activities of the biggest Japanese companies in Europe, please contact Pernille Rudlin (pernilledotrudlinatrudlinconsultingdotcom) for details of corporate subscriptions and customised reports.

 

Rank Company Total EMEA employees y/e 2015 Total EMEA employees y/e 2016 % change
1 Sumitomo Electric Industries 56477 56273 -0.36%
2 Yazaki 45200 47600 5.31%
3 Fujitsu 29467 28707 -2.58%
4 Canon 22356 24826 11.05%
5 Hitachi 11759 19984 69.95%
6 Ricoh 18525 18643 0.64%
7 NTT Data 15000 18000 20.00%
8 Toyota 19118 17445 -8.75%
9 Asahi Glass 14563 16153 10.92%
10 Nissan 16535 16149 -2.33%
11 Toyota Tsusho* 15500 15750 1.61%
12 Denso 14489 15646 7.99%
13 JT Group 12150 15516 27.70%
14 Dentsu* 11000 15000 36.36%
15 Bridgestone (only for Europe) 12255 12932 5.52%
16 Takata 12518 13400 7.05%
17 Sony 13170 12530 -4.86%
18 NSG 12043 12358 2.62%
19 Nidec 3994 4545 13.80%
20 Konica Minolta 9048 9824 8.58%
21 Panasonic 10163 9981 -1.79%
22 Toshiba 11060 9923 -10.28%
23 Lixil 2298 8743 280.46%
24 Honda 8597 8111 -5.65%
25 JTEKT 7262 7292 0.41%
26 Itochu* 7200 7200 0.00%
27 Daikin 6774 7175 5.92%
28 Kyocera Group 7159 7338 2.50%
29 Fast Retailing 5240 6450 23.09%
30 Olympus* 6400 6400 0.00%
TOTAL 437,320 469,894 7.45%

 

*Best estimate as figures not disclosed in annual report

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Why work for a Japanese company? (#1) Corporate Social Responsibility

For most Japanese companies, despite recent changes to corporate governance and the occasional scandal, the main motivation is the long term survival of the firm, not shareholder value maximisation.

Obviously you have to make some money to invest back into the company to survive, but above all longevity means being a good citizen in the environment and communities you operate in. There are some exceptions to this of course, but by and large, Japanese companies are pretty sincere about corporate social responsibility, to the point where I used to joke when I worked in corporate communications in a Japanese IT company, that if we didn’t watch out, our mission statement would be identical to every other Japanese technology company’s mission statement as it could be summarised as “contributing to society through innovation”.

So if you are looking to work for a company that will be supportive of your wish to make a positive contribution to society, then you may find Japanese companies congenial places to work.

Some are more active in CSR than others, so when Toyo Keizai has published its latest rankings by industry, we matched these to our Top 30 Europe, UK and Germany largest Japanese employers rankings and put them in rank order as below.

As Toyo Keizai points out, it is easier for manufacturers to score highly in their CSR rankings, which is why they dominate the top 50 overall, and also why Toyo Keizai publishes rankings by industry, to ensure like for like comparisons are made.  Banking and financial services are not included in their analysis. Toyo Keizai explains its scoring system (in Japanese) here.  It has around 150 criteria, across the categories of diversity (gender, age, disability), environment, corporate governance and social contribution.

  • Fujifilm – #1 overall and #1 in pulp/paper/chemicals
  • Canon #4 overall and #1 in electronics and fine engineering
  • Denso #8 overall and #1 in automotive
  • Ricoh #9 overall and #3 in electronics and fine engineering
  • Konica Minolta #12 overall and #4 in electronics and fine engineering
  • Honda #14 overall and #2 in automotive
  • Nissan #17 overall and #3 in automotive
  • Daiichi Sankyo #25 overall and #1 in pharmaceuticals
  • Toyota #28 overall and #4 in automotive
  • Fujitsu #30 overall and #9 in electronics and fine engineering
  • Astellas #34 overall and #2 in pharmaceuticals
  • Sumitomo Rubber 36th overall and #2 in oil/rubber/glass/ceramics
  • Mitsubishi Corporation #42 overall and #1 among trading companies
  • Lixil 44th overall and #1 in metal products
  • Sony #45 overall and #12 in electronics and fine engineering
  • Nidec #49 overall and #13 in electronics and fine engineering
  • Takeda #50 overall and #4 in pharmaceuticals
  • Sumitomo Electric Industries #52 overall and #2 in metal products
  • Itochu #55 overall and #2 among trading companies
  • Panasonic #57 overall and #15 in electronics and fine engineering
  • NYK #58 overall and #1 in logistics
  • Japan Tobacco 60th overall, 3rd amongst food companies
  • Brother Industries #71 overall and #16 in electronics and fine engineering
  • Sumitomo Corporation – #73 overall and #3 amongst trading companies
  • NTT Data #75 overall and #4 in telecommunications
  • Olympus #84 overall and #17 in electronics and fine engineering
  • Dentsu #95 overall and #2 out of service sector companies
  • Sumitomo Heavy Industries #138 overall and #11 amongst machinery companies
  • Calsonic Kansei #138 overall and #18 in automotive
  • Fast Retailing (Uniqlo) #531 overall and #19 out of 20 amongst retailers

 

 

 

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Nidec – post-Nagamori structure and people

A few Japanese companies have started shifting the global headquarters of certain business units outside of Japan.  For example, Hitachi set up its global rail headquarters in London in 2014 and Terumo, in 2011 moved its blood management and artificial heart businesses to the USA.  As the Nikkei Business magazine points out, this was mainly a case of moving certain functions over to acquired companies and did not result in overseas operations embarking on a wholesale restructuring of the business.

In the case of Nidec, however, the acquisition of KB Electronics, based in Florida USA in 2015 was instigated by Nidec Motors Corporation, Nidec’s subsidiary in Missouri USA.  NMC was part of Emerson Motors in a previous incarnation.  Then Nidec acquired EMG Elettromeccanica in Italy in September 2015 and then acquired a further division of Emerson in August.  Again this was instigated by NMC.  NMC is now functioning as the core of Nidec’s Appliance, Commercial, Industrial (ACIM) divisional company, headed uip by Kei Pang, the CEO of NMC (who was educated at The King’s School in Ely, UK and has a BA from the University of London, I note).

Nidec rarely despatches more than 2 or 3 people from Japan headquarters as expatriates to overseas operations.  Nidec globally is run on a matrix basis, with four Japanese executives in charge of global post merger integration, global business synergy & sales, global purchasing and global technology, running across the five regions of Japan, the USA, EMEA, China and Asia.  As the Nikkei says, the matrix is there to intervene as needed with overseas operations.  However it can easily lead to conflict.  That is where Nagamori-ism – to take up the challenge of high growth and high profitability – should help to reconcile disagreement.  It is meant to provide a structure where people can act independently and the organisation and business change accordingly.  It’s progressing towards a structure which can survive even if Nagamori has gone.

Nagamori has surrounded himself with talent, and presumably potential successors, from many other Japanese companies, such as Mitsubishi Electric, Nissan, Hitachi, SMBC, Honda and Sharp.  In an interview with Nikkei Business he says what’s important is to have a person who can change the company and who has a strong will to grow the business further.  He would be willing to pay more than the usual salary Japanese CEOs receive, to compensate for the responsibility for result.

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Nidec’s Nagamori-ism brings profits and productivity to German acquisitions

Nidec acquired Geraete und Pumpenbau, a German pump manufacturer based in Thuringia in 2014.  The 1000 or so employees were worried about their job security as a result, according to Nikkei Business magazine.  Nagamori visited shortly after the acquisition and said “you are making a superb product.  We can sell this not just in Europe, but US and Asia,” he declared in Japanese, without an interpreter: “Let’s make GPM even bigger.”

Michael Grellmann COO of GPM, says that since joining Nidec Group, they have been able to reduce costs and double profitability thanks to thorough “progress management”.

Nidec started acquiring companies in 2010. mainly in North America and Europe.  They have now made 49 acquisitions, of which 24 are overseas.

Nagamori-ism (which we blogged about here before) has helped the acquisitions thrive – passion, enthusiasm and tenacity as well as high growth, high profit and speed. “This was the biggest project in 150 years of our history.  Before, we would never have thought to go after such a thing” says Giovanni Barra, CEO of Nidec ASI (formerly Ansaldo Sistemi Industriali)

The project was the contract to provide a 90 MW energy storage system to the German utility STEAG.  Nagamori told Barra that he was just making excuses when he said his traditional market of supplying energy systems to oil & gas and iron and steel manufacturers was shrinking.  Nagamori told him to set targets and decide what was needed to achieve those targets and what was lacking and what needed to be improved.

Nagamori management style includes “well digging management”, “1000 cuts management” and “household accounts management”.

Well digging management means that in order to improve or decide on management issues, there should be a thorough pursuit until the idea appears.  1000 cuts management means that however complex the topic, if it is cut into smaller pieces, it can be solved.  Household accounts management means if sales and purchasing is thoroughly managed, there will be a profit.

Barra started up cross functional teams to get costs down and think up new business ventures and also a War Room for those teams to meet in.

NASI has doubled its order book in 4 years.

Another German acquisition NMA (Nidec Motors and Actuators) doubled its productivity.  Nagamori told them to increase their operating profit which was at the usual 5-6% for the industry to 15%.  Olav Schulte, the CEO, initially thought this was too much of a stretch.  He had joined from a major German car manufacturer in 2013 and decided to take up the challenge. He renewed most of the machinery on the line and cut the number of employees by half.  He also took Nagamori-ism’s “3 News” to heart – new markets, new customers, new products.  He looked across the group to gain synergies – combining with NGPM and Nidec Elesys to find new markets and customers.

Nidec now stretches across 33 countries.  Nagamori predicts by 2030 Nidec will be in all the 75 countries where the population is bigger than 10 million.  As the group diversifies in business and countries, the key will be how far he can promote Nagamori-ism and accelerate synergies.  This will require Nidec to start on the road to a new global management structure.

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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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Over half of Top 30 Japanese companies have their European HQ in the UK

A regularly cited statistic in the current EU referendum is that 60% of non-European companies have their European HQ in the UK.  I have just revised our Top 30 Japanese companies in Europe and found that 16 out of the 30 biggest Japanese employers in the region (some companies cover Africa, Turkey, Middle East, Russia from their European HQ) have their regional headquarters in the UK – which is 53%, so slightly under the overall average.  Together they directly employ nearly 420,000 people in the region.

I added Yazaki (a privately held, relatively unknown but huge automotive components supplier) – straight in at number 2.  Their European HQ is in Germany, covering Europe and factories in Africa.  The factories do of course bulk out the total of 45,200 employees in the Europe and Africa region.

If Brexit does happen, the UK could still cite historical and Commonwealth ties as a case for locating a Europe & Africa or EMEA (Europe, Middle East and Africa) HQ in London, but clearly for the automotive industry this is not a significant factor.  Only Honda has their European headquarters in the UK, and automotive parts suppliers tend to follow their customers.

Most of the brand name electronics companies have based their European headquarters in the UK.  The financial companies do not have such large numbers of employees, so whilst nearly all of them have their headquarters in London, they are not in the Top 30.

Adding Yazaki has pushed out electric motor manufacturer Nidec – but I suspect Nidec will soon be back in, given how acquisition hungry it seems to be.

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