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Meanwhile, Inside the Company..Changes
in the Way People Work
By Robert Tobin
Walk past any newsstand today and you're likely to find magazine
covers heralding changes in Japan with stories entitled "The
New Japan", "How Japan is Changing", or "The
Changing Face of Japan". Any day now, expect to see an article
entitled "Say Goodbye to Japan as We Knew It."
Although such articles in the popular press often focus on societal
and sweeping macro-economic changes, far less attention is paid
to the transformation taking place inside the companies where
we work. When bob Dylan sang "the times they are a changin",
in the 1960s, it's unlikely he could have imagined the social,
economic, political and technological metamorphoses that we are
Many of the modifications in our organizations appear to have
accelerated since the collapse of the economic bubble and the
stronger yen. But these events have merely served to hasten and
magnify the changes inside companies, many of which are a direct
response to technological advances worldwide, the globalization
of business and changing government regulations. The expansion
of markets beyond national borders, the high costs necessary for
research and development, and the intensification of worldwide
competition are among the factors currently altering the Japanese
workplace as well.
Five years ago, a personnel manager at a global financial services
company told me there would have to be a rest period after all
of the changes being initiated in her company. "When things
slow down and return to normal around here, we can talk about
other changes", she said. Five years later, no one is talking
about "things getting back to normal." In the words
of one human resources manager, "We are in a constant change
The American Chamber of Commerce in Japan regularly surveys its
members to identify the major human resources issues that American
companies face here. Recruitment was typically cited as the top
priority. But now, the number one concern is organizational effectiveness,
and attaining organizational effectiveness means one thing: change.
How are foreign capital companies in Japan altering the way they
organize, develop new programs and coordinate personnel? What
are the new approaches to leading and initiating change efforts?
For starters, companies are getting more people involved at earlier
stages of the process, are setting clear goals and objectives,
using teams to help manage reforms, and are working harder at
balancing global and local concerns.
Global policies, regional focus
Similar to what has happened at other global companies, there
have been moves at Proctor & Gamble Far East to extend the
reach of the R&D department beyond Japan to include the rest
When expanding work beyond Japan, companies typically focus on
helping their Japanese employees learn more about Asia, or they
may prefer to bring in senior people from across the region. But
P&G's strategy for creating a truly multinational regional
center has involve hiring people from around the world.
Another key project at P&G has been to integrate the staff
of an acquired company into its culture. Employees from both companies
were selected for a task force to identify and listen to the concerns
of their counterparts in the acquired company. Their mission was
to develop strategies for helping people become comfortable and
productive in the new working environment.
The merger process requires great cultural sensitivity and understanding.
Says one P&G human resources specialist, "...being there
from the beginning, is the start of the intervention. You need
to give people the chance to be heard."
P&G also underscored the challenge faced by many international
companies in designing a global system that can adapt to local
circumstances in Japan. A "gone policy fits all" approach
does not work. There's a need for local people to have input into
new procedures and policies," according to the P&G specialist.
When P&G's corporate headquarters initially developed a career
ladder system, it did not fully take into account some of the
unique differences in Japan. For example, doctorate degrees, which
are required for certain positions in the U.S., are less common
here. Another case in point is chemical engineers who enjoy a
higher status overseas than in Japan, where undergraduate education
is less specialized.
Embracing HQ's system in Japan without modification would have
created problems. To make sure its career ladder was effective,
a team from Japan worked alongside a group from headquarters to
help harmonize the system. In the corporate system there were
many entry points, P&G's specialist noted. But here in Japan,
"where the sense of equality is different, there is only
one entry point for the career development system.
Self-managed teams in Japan
A visit to Boston Technology, a telecommunications equipment
company in Tokyo, provides a prime illustration of the changes
taking place inside companies. Boston Technology's lobby is without
the traditional receptionist. The company has also done away with
the president's office, and its one meeting room also doubles
as a smoking lounge. The desks are arranged in three groups, or
"pods," in the center of an open area. Conferences are
held around small tables.
Work is also organized differently. Employees belong to self-managed
teams organized according to customer groups. A technical support
group helps each team. The teams make their own hiring decisions
and set their own targets. Their objectives and successes are
also prominently displayed on office walls. Boston Technology
credits self-managed teams as a factor behind its recent robust
To get things moving in the right direction, the firm sent its
vice president for human resources to Japan to work on "basic
teaming." But it did not stop there. After the human resources
executive returned to the United States, the company followed
up with frequent visits to the office by a consultant who provided
ongoing support and guidance.
Hank Cooper spent two years in Japan as manager of Boston Technology's
customer support services before returning recently to the company's
headquarters. Cooper said his primary mission in Japan was to
"make things happen, give people an opportunity to experiment
and help them succeed."
But the switch to self-managed teams does not always work out.
At one large maker of medical equipment I visited, a staff member
voiced frustration over the inability or reluctance of workers
to take the initiative.
It's important to note, however, that this company failed to
provide the necessary training or follow-up. The staff member
compared being in a self-managed team to "harvesting rice
with new automatic machines that nobody can operate"
Growing a business
When John Plum came to Japan in 1994 as president of Cititrust
and Banking Corp., his prime challenges were to capitalize on
new business opportunities being created by deregulation while
fending off stiff competition from new market entrants. Plum realized
that those working under him would need a fresh set of skills
to succeed in the rapidly changing environment. Initiating change
meant nothing less than getting people to rethink how they do
their jobs. When meeting with staff, Plum explained that when
a business grows in an increasingly competitive market, costs
and revenue can get distorted. Pressure to increase revenue may
be accompanied by increasing costs, which will require new ways
to do old jobs, usually through the use of technology. A substantial
investment was made in new systems, and not just for the traditional
gback officeh part of the business. According to Plum,
gWe simply changed the paradigm, and people had to think
how they did their jobs.h
Listening was the place to begin, and everybody needed to be
involved in the process. Plum started by canvassing the 15-20
people in his department. Everybody recognized that things needed
to be revamped, although they differed over how to get the job
done. In the end, Plum said he just "worked off people's
Minimum skill levels were necessary across areas, and training
was made available to get people "up to speed." For
those employees who were not willing or able to make the adjustment,
other opportunities were found elsewhere in the organization.
During the transition process, a manager's verbal responses to
questions and concerns can make a big difference in encouraging
initiative. As was seen in other companies, initiating change
requires follow-up and attention. In order to have a flatter organization,
Plum chose to not hire a deputy, thus limiting the number of workplace
issues and decisions that could be "kicked upstairs."
Plum met questions from employees about what he was going to
do with, "What are you going to do?" Workers were also
told that it was in their "best interest" to help out
struggling colleagues. Plum admits that the initial shift to a
more focused, competitive working environment put an expected
damper on morale. But those who underwent the process gained a
new sense of accomplishment, commitment and direction.
Peter Cohen, a former chairman of the ACCJ's Human Resources
Management Committee, has been involved in several major change
initiatives as an HR professional here.
Cohen was working at an American Pharmaceutical firm when it
acquired a Japanese company that was much larger in terms of employee
numbers. "The takeover really provided an opportunity to
re-examine the way we did business," Cohen recalls.
A steering committee made up of representatives from both companies
guided the transition effort, collected information from a variety
of sources and addressed the big issues in deciding what the company
should look like in the future. Among the questions asked were:
How do we position ourselves in Japan vis a vis corporate human
resources philosophy and culture?
What are the major trends affecting our industry and company?
What are the common threads in both organizations?
What kind of organization do we want to become?
What position do we want in this market?
How should we work with our union?
Cohen said that setting clear goals and involving many people,
including the union, were the keys to success. "We kept our
promises. We said we would be a top-20 company even though we
started from a position way below that. We did become a top-20
company and a top-20 provider in terms of salary and benefits.
People saw that we did what we said and that gave us credibility."
Cohen offers this oft heard advice: "Be prepared to stay
longer than you thought." He also stressed the importance
of the human resources department in helping with change and the
need for it to work closely with the CEO.
As president of Nippon Organon K.K., the Tokyo unit of the Dutch
pharmaceutical company Akzo Nobel, Horst Bender said his biggest
challenge since coming to Japan five years ago has been to get
people "thinking outside of the box."
The starting point for developing a new company-wide vision was
a series of three-day training programs. The emphasis in implementing
changes was on creating more meaningful jobs---jobs which would
add value to the organization. Change has meant examining and
encouraging people to shift their thinking about how business
is conducted in Japan and also how people can learn from their
work. Bender made it clear to his employees that lifelong learning
is the key to progress and that it should not be seen as a burden.
In his dealings with employees, Bender has always focused on
results, not activities---not on being so busy, but on accomplishments.
But Bender is also quick to agree that patience is the order of
the day. "Change took longer than we thought---it takes several
years. No one can expect to be here for two years and implement
In the past, Bender said, many expatriates did not see themselves
as agents of change in Japan. These days, however, his advice
to companies is, "Don't bring in an administrator. What is
needed is someone who understands and can lead change. Global
companies today need a "change master", someone creative
who believes in people's abilities and is able to provide leadership."
Dr. Robert I. Tobin is Professor, Faculty
of Business and Commerce at Keio University, where he heads the
program on Change and Creativity. He is also an executive coach,
speaker and consultant on organizational change and creativity
in leading global organizations in the automotive, computer, semi-conductor,
chemical, and financial services industries.