The True Meaning of Work Style Innovation-Effective Use of Limited Human Resources and Revitalization of Innovation

Reducing the number of working hours and prohibiting overtime is not enough to achieve the goal

On November 28, 2018, "Fujitsu Insight 2018" was held under the theme of work style innovation. In the keynote speech entitled "The Reality and Prospects of 'Work Style Innovation' for the Survival and Growth of Enterprises -Key Points for Successful Organization Management and Innovation through Work Style Innovation-," the essence of work style innovation was discussed in three sessions that focused on improving job satisfaction and motivation, on relationships with AI, and on Fujitsu's in-house practices. This was followed by a panel discussion.

Promoting Work Style Innovation Based on Two Pillars: Work Environments and Job Satisfaction

To start, Fujitsu's Matsumoto introduced the current situation: "I talked with people from many companies, and I know that many companies are considering implementing work style innovation, but a large number appear to have difficulty advancing it effectively." Matsumoto then asked the audience, "Why do you think we need to implement work style innovation? What is its essence?" After that, Dr. Hiroshi Yamamoto of Aoyama Gakuin University was first to take the podium.

When we say "work style innovation," we almost always mean "improving labor productivity." So, is it sufficient merely to reduce the number of working hours in order to increase labor productivity? Actually, the answer is no. We must consider the content of work as well. So, I think we should think about work style innovation from two aspects: "work environments" and " worthwhileness of working."

What is worthwhileness of working ? It means to obtain positive effects for yourself by working. Because worthwhileness of working -in other words, a sense of fulfillment-cannot be measured numerically, there have not been many investigations by comparisons or other means. However, it is now becoming possible to make quantitative comparisons of worthwhileness of working levels based on factors such as motivation and engagement.

Motivation is voluntary willingness, while engagement is the voluntary commitment of each individual employee to demonstrate their abilities to achieve the company's strategies and goals by linking the company's growth to their individual growth-in other words, enthusiasm for work. Engagement differs from motivation because engagement means to strive to achieve the company's growth by combining it with employees' personal growth. In short, it refers to the strengths of individuals' ties and commitment to the company, which leads to high business performance. Work engagement is believed to directly increase sales and productivity.

Let's compare levels of engagement between Japan and the rest of the world. Globally, the percentage of people with high engagement began to gradually increase around 2011, and it has risen sharply since 2014.

On the other hand, an engagement survey of Japan shows a shocking result. Gallup's survey published in the Nikkei Shimbun in May 2017 revealed that only 6% of Japanese employees are highly engaged and motivated, ranking Japan as low as 132nd of all 139 countries surveyed. Meanwhile, Japan's percentage of disengaged employees exceeded 70%, more than 10 times the number of those engaged.

So, what are companies and organizations doing to enhance engagement? In this respect, too, there is a great gap between Japan and the rest of the world. According to Towers Watson's survey, the United States, Canada, and Europe have similar trends in which leadership, social recognition, and image are recognized as important.

Meanwhile, the most important factor in Japan is delegation of authority, which is to say the roles of superiors, and the second most important is work-life balance, which is exactly what we work on in work style innovation. I believe that improving work environments through work style innovation also leads to higher worthwhileness of working.

Another point to note is "pay," which ranked fifth. In Europe and the U.S., increasing pay is not recognized to be a measure to enhance motivation or worthwhileness of working, while in Japan, such increases are recognized to be effective for motivating employees. Meanwhile, leadership, social recognition, and image, which ranked highly in Europe and the U.S., did not make the rankings only in Japan.

It is also important to recognize employees' work accomplishments and achievements. Many companies have adopted in-house awards systems for employees; however, in some cases, there are no clear rules for giving out awards, or no employee has received an award in years. It is effective to make use of awards systems as well as to establish other bonus systems, such as job proposals or peer bonuses.

Another thing we should not forget is to visualize job skills. Visualization of operations has been discussed in various places, but what I want to talk about here is the skills accumulated by individuals. Evaluating skills together also enhances worthwhileness of working.

To reduce the number of working hours, it is effective to make it easier for employees to take paid leave. For example, if employees can easily take a long vacation or work flexibly in hourly increments, they come to feel their job is more meaningful. If they continue to work all the time, they have no time to feel fulfillment in their work. Resting gives us time to reflect on ourselves and feel a sense of worthwhileness of working, like "I've been doing well" or "I have progressed in my work since last year."

How Will AI Change Japanese Companies' Work Styles?

Next to the podium was Chiaki Ito from Hitachi Zosen Corporation, who spoke about AI and work style innovation.

Seven years ago, sometime before the Great East Japan Earthquake, the Wall Street Journal (February 17, 2011) posted an article entitled "Forget blue-collar and white-collar." This article argued that an era will come in which there will be no distinction between blue- and white-collar workers. Instead, it contended that, with the development of new technologies, workers will be divided into two types: creators who make new things, and servers who do work based on accumulated knowledge and rules.

In fact, the day before the article was posted, IBM's AI platform Watson completely defeated human quiz champions who represented the U.S. The technology referred to in the Wall Street Journal article can be said to be AI.

The U.S. is currently said to have three classes of workers: blue-, white- and pink-collar workers. With regard to blue-collar workers, if AI and robots advance in the future, even skilled workers may be at risk of losing their jobs. White-collar workers are not immune to such risk, either. If AI is deployed more widely in business operations, white-collar jobs that used to be the domain of highly educated workers may not be safe. The word "pink-collar" may not be familiar to you. Pink-collar jobs refer to human-related jobs, such as nursing care, long-term care, and childcare. Pink-collar jobs are thought to be difficult to easily replace with AI.

There are three types of jobs that will survive even when AI develops further in the future. First are jobs that create innovations. The key to develop a small business into a big one is to continuously accumulate new innovations, even small ones. Second are the pink-collar jobs introduced earlier. Since tens of thousands of years ago, humanity had engaged in work related to plants and animals--gathering and hunting. Over time, the life of hunter-gatherers changed to agriculture and farming, but this makes no difference in the sense that the work still related to plants and animals. It is said that in the future, human-related jobs will account for a significant portion of the work humans do. This may sound bad, but the jobs that no one wants to do will remain until the end. Perhaps these kinds of jobs will be exceptionally difficult for AI to perform.

So, how will AI change society? The digital revolution's power is frightening because it enables companies to be the best in the world without much capital investment. Under capitalism, in principle, companies receive money from shareholders, make capital investments, and distribute the dividends as profits. Such a principle could collapse due to the digital revolution.

The driving force of this collapse is software. Since the conventional law of diminishing returns applies to conventional manufacturing, it is unlikely for a single company to dominate the world market. However, since software incurs no implementation costs, it has the potential to monopolize the world market.

As a result of successive innovations occurring one after another, the lifespan of companies is decreasing. The average lifespan of S&P 500 companies dropped from 67 years in the 1920s to 15 years today. Even if young people enter good companies, they cannot always continue to work there until retirement age. The lifespan here pertains to U.S. companies, but Japan will surely follow the same trend as the U.S.

So, how can we create innovations? I think the key is the level of self-discretion given to individuals to. I visited Airbnb's office in Silicon Valley, which is called "a mecca for innovations." There were no partitions in the large office area.

Meeting spaces were available in an open area, where employees had discussions without using PCs or materials. Discussion themes appeared to have been already set before starting the meetings. Another thing that surprised me was that I could not identify the leaders in those discussions at all.

To create innovations, the organizational hierarchy must be flattened. In a multi-level hierarchical organization, it often happens that, while communicating a message from regular employees to the president, the message content changes completely. I think such organizations do not work to create innovations.

If we try to create new things through discussions, we must include diverse members. Our efforts to create innovations cannot be successful without involving a diverse group of people, including women and foreigners.

No innovations will occur in organizations that reject those who propose outrageous ideas with words like, "Do not say stupid things." Rather, organizations that ask questions earnestly, such as "Why did you come up with such an idea?" or "What is the background to that idea?" have grown into top companies, increasing both their sales and profits.

I believe that real work style innovation is not limited to the relationships between individuals and organizations; rather, it has major effects that can change a company's shape.