Key Points for Successful Work Style Innovation in the Era When Everyone Lives to Age 100

Considering the Next Step in Work Style Innovation

In the second half of the conference, moderator Shunsuke Takahashi, Professor at the Keio University Graduate School, introduced three different perspectives as it is necessary to go back to the beginning to review, from various perspectives, the "next step" of the work style innovation, which started from efforts to alleviate long working hours.

Shunsuke Takahashi
Project Professor
Graduate School of Media and
Governance, Keio University

First is the "perspective of the business model itself." The traditional business model, which depends on spurring-and-encouraging-type leadership and young employees' physical strength and motivation, has been widely used despite its low productivity and disadvantages, such as allowing customers to be overly demanding. Against this backdrop lies the idea of "focusing more on the top line (sales) than the bottom line (profits)" because the bottom line is invisible compared to the top line.

What is important here is the second "perspective of visualization and structuring." To prevent too much focus on the top line, it is important to be aware of intermediate indicators in the complex value chain leading to the bottom line by visualizing various KPIs. Over-dependence on transfer-type (top-down) OJT hinders operation standardization and efficient IT investment. By standardizing operations, each employee's tasks can be visualized and structured, making it easier for them to improve their self-management abilities.

What next becomes important is the third "perspective of manager education." Managers of supermarkets in Japan cannot easily take days off because they also perform lower-level duties since their tasks are not clearly defined. If their tasks are visualized, training support for managers becomes easier and managers themselves can effectively use their time for self-investment.

Lack of Digital Skills Hampers ICT Investment

Mr. Takahashi, who served as moderator, asked METI's Mr. Ito what the government expects from the private sector in terms of promoting work style innovation. Mr. Ito described his expectations: "At Fujitsu, personnel responsible for human resources and ICT maintain close communication with each other; however, in small- and medium-sized enterprises in particular, the relationship between the HR/labor department and the ICT department is usually weak, and personnel tend to lack digital skills, which hampers ICT investment. The government is strengthening support for basic training to improve digital skills, so we hope for closer communication between clients and vendors to make ICT and AI more familiar to the HR department."

Mr. Ito said, "For companies that are already adopting personalized work styles, such as telework, the next phase will be 'personnel evaluation reform.' Although the government does not directly involve itself in this matter because it is related to the core of management, we want companies to fully consider how to evaluate employee achievements and how to maintain employee motivation and compensation when expanding work-style options according to each individual's needs."

Mr. Takahashi next asked Fujitsu's Matsumoto about what hinders medium-sized enterprises from investing in ICT to improve productivity. In response, Matsumoto pointed out a problem: "It is difficult to accurately define KPIs that show how much IT investment makes what level of contribution to the client company's profits. If we can present KPIs in an easier-to-understand way, customers can draw a realistic picture of investment returns at their companies; however, thus far we have not been able to present KPIs to customers in a persuasive way."

Mr. Ito remarked that he understood Matsumoto's point, noting that, "The major pitfall of work style innovation is the difficulty of balancing the interests achieved by the innovation between the company and the employees so that no trade-off occurs. In the relationship between the ICT vendor and client, "visualization of KPIs" is the key factor, which also applies to the relationship between the company's HR department and general employees in other departments. Therefore, ICT investment will not be efficient unless employees evaluate the ICT as beneficial to themselves in some way."

Personnel Evaluation Reform Urgently Needed

Next, Mr. Takahashi asked Fujitsu's Hayashi about the kind of personnel evaluation that will be required for the companies of the future. Hayashi explained: "Previously, personnel management meant to 'manage' employees by developing a framework based on the premise that 'employees cannot be trusted too much,' but work style innovation assumes that employees can be trusted and expected to work autonomously. Meanwhile, employees must recognize that self-responsibility accompanies autonomous work. To that end, we must review the personnel system."

Mr. Takahashi continued, "Even if telework is implemented, it is meaningless if employees think that it merely reduces overtime pay. Since productivity and profits increase by reducing overtime pay, it is necessary to build a win-win relationship between the company and employees by distributing the increased profits as bonuses or by other means." Mr. Takahashi also spoke about the "KPI visualization" mentioned by Matsumoto, giving an example related to the shared economy, such as Airbnb that releases the accumulated peer reviews (mutual evaluations) between renters and those renting to the public: "It is important to visualize work by accumulating evaluations of minor daily tasks, not just an annual evaluation."

Second-career Framework Needed for Seniors

Then, Mr. Takahashi asked Hayashi about what he expects from the government with regard to human resources. Hayashi replied, "Many developers and researchers say that they want to work as much as possible when they want to and to be evaluated by their outputs. On the other hand, companies are obliged to take safety measures and must monitor employee work volume for health management purposes. I want the government to quickly create a discretionary labor system and a white-collar exemption system to prevent erosion of international competitiveness. In the era of 100-year lives, a single company cannot look after its employees over their entire working lifetimes. When looking at individuals' careers from a long-term perspective, it is more necessary than ever to enhance human resource liquidity beyond companies and groups and to create a system where the government and private sector jointly promote a framework for a second-career system for seniors."

Mr. Takahashi introduced examples in which many workers in their 50s changed their jobs from manufacturers or trading companies to local small- and medium-sized companies with highly motivated executives using a program promoted by the Cabinet Office that encourages high-level professional human resources to return to local areas. Mr. Ito mentioned, "There will be many people who work until around age 80 in the era of 100-year lives. Looking towards the era when individuals' occupational lives exceed the 30-year average lifespan of Japanese companies, METI thinks that workers should acquire various skills to make it easier to change jobs and find side work. As a social responsibility of large companies, I want them to provide employees with growth opportunities while working, and the government wants to support such activities."

Next, Takahashi asked Matsumoto, "What do you expect the government to do about policies?" Referring to the fact that an increasing number of universities have begun teaching career planning recently, Matsumoto replied, "I agree that it is important to make students think about their futures 10 to 20 years from now, but I wonder if they really understand the essential points. Students who got through their university years with passive attitudes tend to think that it is the company's fault if they cannot realize their career plans as designed after starting to work in society. I always say to young people that it is important to incorporate what they have learned and transform their sense of values. I want universities to devise ways to communicate with students to aid in real understanding."

Providing More Learning Opportunities for the Era of 100-Year Lives

Finally, Mr. Takahashi asked everyone, "In the era when everyone lives to age 100, it will become commonplace for people who are age 70 to 80 to work in companies. When such a time comes, what should we pay attention to and what should we change?"

Matsumoto remarked, "Most experiences and knowledge that have been accumulated over the years can now be easily retrieved by an online search. What matters is not how to gather information, but how much added value can be given to the information gathered by search engines," emphasizing the importance of developing and maintaining such skills on a daily basis. Mr. Hayashi continued, "People who have improved their expertise over many years tend to be reluctant to learn things outside their domain of expertise to improve themselves, but in such a case, they will no longer be useful once they leave the company. It is necessary to provide them with opportunities to brush up their skills and to make their expertise more valuable."

Mr. Ito stated that the Japanese government considers learning reform to be a high priority issue towards the realization of the 100-year life society and there is an urgent need to plan a total package that includes social security, education, labor, and industrial policies to complement this reform. He also noted, "2018 will be 'the year of reform of the HR department' in which the focus of work style innovation will shift from 'individuals' to 'enterprises' once again and full-scale discussions will be promoted on how personnel and HR policies should be as the basis of corporate management in the environment where work style is diversifying. Unless companies disseminate information on their HR policies, they may eventually become unable to secure human resources and their management will not be sustainable."

Summarizing these opinions, Mr. Takahashi concluded the conference with these words: "Work style innovation came to the fore not because of the advent of the 100-year-life era but because the Japanese-style business model, which works only under certain circumstances, was facing its limits. As business models diversify, organization models and career formation models are required to change as well. Corporate executives should be aware that business model transformation lies at the basis of work style innovation."

Presenters
  • Sadanori Ito Director of Human Resources Policy
    METI
  • Shunsuke Takahashi Project Professor
    Graduate School of Media and
    Governance, Keio University
  • Hiroshi Hayashi Corporate Executive Officer, EVP, CHRO/CHO,
    Head of the Global Human Resources Unit
    Fujitsu Limited
  • Masayoshi Matsumoto EVP, CIO
    Fujitsu Limited