There are many ways to approach work style innovation, the subject of much discussion in recent years. How are the national government, local governments, large corporations, and small- and medium-sized enterprises engaging in efforts to move work style innovation forward? What common ground do they share? Three consultants from the Fujitsu Research Institute (FRI)―a group that supports work style innovation in the national government, local governments, and the private sector―explain strategies for succeeding in work style innovation. (Interview date: October 20, 2017)
* This article is a partial rewrite of an article published in FRI's information magazine, Chisounomori (2018 Vol. 1, pp. 11-16).
How to Integrate "Work" and "Life"
Kikumoto: As exemplified by the government's establishment of the Council for the Realization of Work Style Reform in 2016, the challenges presented by work style innovation have become an issue not only for the private sector but for the entire nation.
Sugiura: I'm often involved in national projects in which HR personnel of large companies gather to discuss work style innovation. Since these topics are discussed from a corporate management standpoint, talk generally centers on improving productivity. The key point here is to achieve work styles that are not predicated on overtime work. Thus, when approaching this, the challenge is to improve labor productivity on a per-hour basis.
Yukawa: Large companies usually have their own consultants and access to advisory services, but small- and medium-sized enterprises seldom have the time or money, or even the necessary basic information, so there are cases in which the government lends a hand. I often raise the topics of telecommuting and remote work as part of local government labor policies, but the degree of understanding regarding these issues varies.
Kikumoto: For the past five years, I have engaged in supporting mainly large companies in their work style innovation. Often, the main objective of these efforts is to strengthen business. However, when we ask about realities on the ground, company workers mention being constantly pressed for time. Such cases often require both reductions in the amount of wasted time and productivity improvements. In a survey we conducted with a particular client, we found that employees spent three hours a day in meetings, and managers were even more pressed for time. Some spent two hours a day exchanging emails, and two to three hours a week organizing their inboxes.
Yukawa: When small- and medium-sized enterprises relocate to new offices, one strategy is to adopt a paperless environment to reduce moving costs while simultaneously adopting a non-territorial office style to reduce office expenses. Moreover, local governments' telecommuting models often include electronic approval systems. In any case, a major shift in mentality for management is crucial; without a system for electronic approval, remote work and telecommuting do not function well.
Kikumoto: Achieving work style innovation requires various efforts and approaches, but I believe that maintaining a perspective that takes into consideration the decreasing working-age population is necessary. Because of this, I believe that a debate focused on how to efficiently integrate work and life is important, and I do not think these two factors are conceptually antithetical.
Reducing Overtime Versus Abolishing a Work Style Predicated on Overtime Work
Kikumoto: Sugiura, you are conducting research on the work style innovation the national government is promoting. Could you tell us a little about that?
Sugiura: As I mentioned earlier, these reforms have two major objectives, namely reducing the number of working hours and improving labor productivity on a per-hour basis. If we examine international labor standards, Japan only meets the requirements for about 50 of the 200 standards. Examples include a 40-hour work week, at least two weeks of consecutive holidays, and childcare leave. These labor standards are a sort of international consensus on how to judge whether a company is sustainable from the perspective of labor practices. Each country has full sovereignty in whether or not to ratify these standards, but when considering the impact ratification has on bank loans, stock prices, and consumer behavior, it is becoming increasingly crucial to reform labor practices from the point of view of sustainability.
Yukawa: In terms of working hours, the average in Japan and the US is about the same, so is productivity worse in Japan?
Sugiura: It depends on the industry, but some data shows that Japan ranks the worst among OECD member countries. One particular challenge is how to raise labor productivity on a per-hour basis.
Kikumoto: When examining the issue of reducing the number of overtime work hours, we find that workplaces face many challenges. Workloads remain the same, but the number of working hours is limited, and the lights go off at 6 p.m. One client told us that they have to go to nearby cafes to work and have meetings, which is risky from a security standpoint.
Yukawa: There are even karaoke boxes that offer space for satellite offices. To solve this problem in which the number of working hours is limited while workloads remain constant, there is a need to improve productivity by combining various measures.
Sugiura: As I mentioned at the start, when HR personnel of large companies have discussions from a corporate management standpoint, focus is placed on how to improve productivity. The key point here is to achieve work styles that are not predicated on overtime work. The focus must be on abolishing work styles predicated on overtime work rather than merely trying to reduce the number of overtime hours. Doing so will lead to improving individuals' skills, motivation, and creativity. This may be closer to reforming how meetings are held and task processes, but it is important to fundamentally change how we view overtime work.
Kikumoto: What are some of the efforts the government is undertaking in terms of reforming work styles to ensure overtime work is not considered a given?
Sugiura: One example is enabling the time saved to be used in self-investment, thereby increasing the number of personnel capable of adapting to new technologies and taking on new business initiatives. As part of the "human resource development revolution," the government has proposed subsidizing recurrent education (*) for corporations, and the Prime Minister's Official Residence has established the "Council for Designing 100-Year Life Society" (**). Companies have a 30-year lifecycle, and the lifecycles of business enterprises are even shorter; meanwhile, AI and technological innovation are changing the skills that people need, forcing individuals to change careers and skill sets. This has led to a situation in which corporations and individuals cannot survive unless they diversify through reeducation, career independence, and development of the ability to shape their own futures.
Yukawa: We are living in an age in which you might have two or three careers in your lifetime. You can retire at 60 or 65, and then start again fresh and find a company where you can continue to work. People will live to be a hundred, so our life styles will change, too. Fifty years is only half your life. So, our work styles will also change. One challenge facing companies is how to employ older personnel.
Sugiura: It is also difficult for companies to invest in training; the fact remains that it is wasteful to invest money to train someone who will quit after a short time. As everyone is expected to pursue self-development, the ways in which we learn and teach will change with the times. We briefly mentioned AI earlier, but in this era in which employment must go hand-in-hand with AI, it is important to review how we think about personal careers and skill sets.
Why Local Governments Support Telecommuting for Small- and Medium-sized Enterprises
Kikumoto: What are local governments and small- and medium-sized enterprises focusing on in terms of work style innovation?
Yukawa: When considering local government policies, it is important for tax-operated administrations to extend a helping hand to small- and medium-sized enterprises, which comprise the overwhelming share of workers and companies. The current trend is to encourage telecommuting and remote work as well as to create opportunities to experience the same, all the while showing what steps to take to implement such reforms.
Kikumoto: Why are local governments promoting telecommuting for small- and medium-sized enterprises?
Yukawa: One issue is commuting time in the Tokyo metropolitan area. For example, Kanagawa Prefecture has some of the longest commute times in the entire country. From a labor policy perspective, one solution to mitigate the problem of commuting times is to adopt telecommuting. Another reason is to facilitate employment of the elderly. Most large companies pay traveling expenses to cover fixed-term commuter passes, but many small- and medium-sized enterprises pay actual expenses, which makes it cheaper if employees work two days per week from home. The time spent commuting can be converted into working hours, employees have an easier time, and companies can reduce the amount of travel expenses paid while maintaining better working hours.
Kikumoto: This alleviates burdens on both companies and workers, and it even mitigates congestion, which helps local governments. Such a perspective and approach is unique to local governments.
Yukawa: Large companies consider telecommuting from a mid-to-long term perspective, but small- and medium-sized enterprises view it as an immediate business strategy. Also, regarding non-territorial offices, the cost to rent an office for 20 employees is vastly higher than securing desk space for 10 people. Telecommuting and non-territorial offices are measures we consider after taking into account the locations of employees' residences and the company itself.
Kikumoto: Do you ever have doubts about whether these approaches will truly improve productivity or encourage collaboration?
Yukawa: In small- and medium-sized enterprises, company presidents make the decisions, so once we demonstrate the effectiveness, they are quick to act. If they think it will be effective, a decision will be made promptly, and if they think it is a mistake, they will reject it right away. If we can make the right approach and get our message across, moving immediately to implementation is possible.
Top-down Decision Making: The Key to Work Style Innovation
Kikumoto: For large companies, the objective of work style innovation is to strengthen their businesses as well as to enhance their global competitiveness and capabilities for sustainable growth. However, small- and medium-sized enterprises are looking for more immediate results.
Sugiura: Even for large companies, if they aim to strengthen their businesses on a global scale, they must make efforts to speed up their decision-making processes as part of work style innovation. Earlier in our conversation, we talked about the need to change our perspectives to adopt work styles not predicated on overtime work. What are the challenges that companies must tackle to do so?
Kikumoto: Besides ICT, companies must change their rules, procedures, and ways of thinking, but often the message from the top does not spread throughout the company. In such an environment, it is not easy for all employees to get on board and aim for a common objective. To change this, companies must have a sense of impending crisis.
Yukawa: To change companies' cultures, create rules, or maintain ICT, top-down decisiveness is necessary. Without direction from the top with regard to the aims of the company as a whole, no progress can be made.
Kikumoto: In our group, we often hear from IT departments, but IT departments alone cannot implement reforms. The various affected departments need to be involved, driving the reform forward as a company-wide effort.
How Large Companies and Small- and Medium-sized Enterprises Should Proceed with Work Style Innovation
Kikumoto: To be successful, tools must be prepared. For small- and medium-sized enterprises, even if they do not employ the latest technology, they receive support from local governments to leverage ICT, and the company president can instantly initiate change. It is difficult for large companies to act so quickly because they must perform legal reviews and consider security, including at overseas offices, which takes time.
Sugiura: The first potential snag is when setting objectives for work style innovation. From a corporate perspective, there are many factors to consider, such as indirect time conservation, improved labor productivity, and improved creativity, which makes it easy to confuse the different objectives. Discussions can drag on and inhibit efforts from moving forward smoothly.
Yukawa: Though large companies can have these discussions effectively, it is difficult for small- and medium-sized enterprises to know where to start. The trajectory of success can change depending on who is targeted.
Kikumoto: Even with something like telecommuting, how it is understood varies. Large companies have many employees across the globe. Japan's shrinking work force can be countered by adapting to diversity in human resources and cultures. Going forward, routine tasks will be able to be automated using AI.
Sugiura: This means that when we approach small- and medium-sized enterprises, it is important to emphasize the specific, immediate benefits to effectiveness.
Yukawa: The way we approach satellite offices differs as well. It is often said that for small- and medium-sized enterprises, using co-working spaces can be a way of achieving secondary benefits, such as opportunities to find new business partners and customers. Meanwhile, co-working space providers are looking to generate co-creation. The way satellite offices are used is changing, such as to create a business based on workshops.
Kikumoto: Fujitsu Research Institute supports not only large companies but also local governments, small- and medium-sized enterprises, and the national government. We want to continue to support work style innovation on a nation-wide scale.
- *: Recurrent education: A concept of lifelong learning advocated by the OECD (Organisation for Economic Co-operation and Development). In contrast to the traditional concept of education, in which people are educated in schools to prepare for a life of work, this concept aims to guarantee re-entry into schools for those who are already working in order to systemically perpetuate a cycle of academic and social education.
- **: Council for Designing 100-Year Life Society: The Prime Minister's Official Residence established this council to finance the deliberation of policies to carry out the "human resource development revolution."
- Speakers (from the left)
- Junnosuke Sugiura: Managing Consultant, Fujitsu Research Institute
- Toru Kikumoto: Managing Consultant, Fujitsu Research Institute
- Kyosuke Yukawa: Senior Managing Consultant, Fujitsu Research Institute
*Titles and companies are as of the date of the interview