TDK is in our top 30 largest Japanese companies in Europe, with over 7,000 employees – mainly working their factories in the Czech Republic and Hungary. But we’ve never blogged about them before as their senior executives tend to stay rather quiet. In fact I wonder if that many Europeans are even aware of them as a company, or that they are Japanese.
People of my age will remember TDK cassette tapes. The company’s origins date back to 1935, when TDK was founded as Tokyo Denki Kagaku Kogyo (Tokyo Electrical Chemical Industries) and they began manufacturing magnetic tapes in the 1950s. TDK has pretty much phased out its magnetic tapes now and instead is focused on sensors, actuators and power electronic components. It has acquired various companies in these sectors, including EPCOS in Germany, the Lambda Power Division of Invensys in the UK, and Micronas in Switzerland. As a result, more than 90% of its sales and its employees are outside Japan.
Global governance means empowering
The Nikkei recently interviewed TDK’s President since 2016 – Nasunari Ishiguro. Ishiguro is confident that TDK’s approach to global management by having a structure that encourages self-directed action is working well. “We had to think about how to have effective global governance. How to be disciplined as a group but at the same time not impact society in a negative way.”
“It’s not something that a president can do on their own. We have a phrase “functional equality” at TDK, meaning every department should be functionally equivalent. We thought the word “governance” didn’t really suit our culture. It’s not about delegating authority – so we use the word “empower” instead.”
“Instead of just providing money, people and technology to group companies and leaving it up to them to get on with it, we encourage stakeholders to become more transparent with each other, in a spirit of give and take, so it is not a centralized organization, but autonomously distributed”
“For example, a subsidiary in China that makes batteries, then makes use of the structure to propose other things that they want to do, rather than being commanded to do things by the President.”
“So we have regional headquarters in China, the USA, Europe and Asia so that group companies can cooperate with each other. So for example, if a lawyer is needed, they can be sent from a regional headquarters, or they can share a finance function.”
TDK garitto philosophy
“We are currently developing a “Day 1″ book that summarizes our philosophy and the values to be shared, such as contribute to society/the industry, ensure trust, keep quality standards etc. It should be no more than 3-5cm thick. Each group company can freely exercise their discretion in how they adhere to it.”
“All management meetings are in English, and because of “functional equality” each person is equal in the debate. So meetings can take more than 2 hours. Overseas group officers are to point out problems without hesitation and feel free to give their opinions and voice doubts”
Ishiguro is worried that manufacturing has moved outside of Japan and wants to ensure that TDK’s monozukuri (craftsmanship) is systematized. He has started a “Garitto monozukuri” initiative with the aim of systematizing and conveying manufacturing know-how to future generations. “Garitto” is Akita dialect (one of TDK’s original factories was in Akita) meaning “with all your might” and “sturdily.”
Equal global people
“We need to have global employee mobility too. The head of global HR is the Germany HR Director. We have established a cross border HR team as an organization that is not bounded by location. For example the leader of one project is Chinese, and there are Japanese and German people in the team.”
As for a successor, Ishiguro says he doesn’t care what background or nationality someone has, it just needs to be “someone with a spirit of adventure, and a light in their eyes, who is not afraid of change. We have to change in order to be of use to society. They need to put out their antenna, even when the way forward is not clear.”
Although Ishiguro has been at TDK all his career, he actually dropped out of university and also spent some time working in Luxembourg, setting up a magnetic tape factory. Perhaps this is where he got his un-Japanese tolerance of being equals in argument and thrashing out problems. “I’m not a flashy person” he says, “I believe I was asked to be president because I will consolidate our foundations. I think I have revived the company through open debate and steady reforms.”
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