Japan's HRM & IR Information — HRM & IR News [FY2018]

December 26, 2018 [No.60-2018]
Dr. Toshiyuki Yamanaka Ph.D.
CEO, Global Dynamics Co., Ltd.
Professor, Graduate School, Kobe Institute of Computing

Part 2: Executives in a rapidly changing world (2)

 On November 19th, Carlos Ghosn, the CEO of Nissan and Renault, was arrested over allegations of making false disclosures in Nissan's annual securities reports. The news came as a big surprise not only in Japan and France, but also across the globe.
 In Japan, people have begun to discuss whether Japanese companies should recruit high-profile overseas executives. Because of Ghosn's arrest, nurturing executives has become a central issue in Japan's corporate world. I believe, however, that these discussions betray the participants' narrow-mindedness.
 In an era characterized by volatility, uncertainty, complexity, and ambiguity (VUCA), globally minded executives play a crucial role, irrespective of their nationality. What is more important is to recruit and develop executives from various backgrounds.
 In this article, I would like to discuss the training, retention, and recruitment & selection of executives with the aim of nurturing them.
1. Training
 According to Japan's SANRO Research Institute, Japanese companies' expenditure on employee training has increased over the past two years.
 Globally, global companies' expenditure on training seems to be increasing owing to the demand for training executives to function in a rapidly changing world.
 Based on my experience as a trainer and the discussions that I have had with various executives and human resources development experts, I would like to make the following three points.
 First, the necessity of training current executives is becoming more acute. The VUCA era requires decision-making capacity backed by diversity of knowledge. Discussions on global business issues with a talented facilitator play a crucial role in decision making. An executive of an esteemed global company once said, “When I attended a training session at a resort, the facilitator was Peter Drucker. I learned a lot from the discussions we had.”
 Second, trainings which other companies' leaders also attend should be considered. The range of discussions possible in an in-house training is limited. There is a possibility that participants of such in-house training would raise similar questions and consider almost identical strategies. At the Association for Overseas Technical Cooperation and Sustainable Partnerships (AOTS) and other organizations, I was involved in an innovation training course for employees with diverse backgrounds and belonging to different countries. For achieving innovation or creating new businesses, this type of training is important.
 Third, large-scale adoption of e-learning should be encouraged. As many experts have stressed, a monologue is not an efficient way to create something new. In addition, face-to-face training is expensive owing to the transportation and accommodation costs involved. I have been engaged for e-learning training many times. In e-learning, trainees can check whether they have understood the topics by using frequent tests. In addition, trainees can continuously update themselves on new technologies and their implementation cases during their e-learning courses. Frequently updated e-learning content plays a significant role in responding appropriately in a rapidly changing world.
2. Retention
 When I hold training sessions for non-Japanese leaders, many of them mention that retaining talent is one of their biggest management challenges.
 I have been a member of SEIWAJUKU, a training hall for business managers all over the world. SEIWAJUKU is chaired by Dr. Kazuo Inamori, the founder of Kyocera Corporation, a ceramics and electronic device company. Dr. Inamori is regarded as one of the most successful business leaders in Japans' corporate history. Based on the discussions at SEIWAJUKU, I would like to make three points.
 First, the profit sharing between executives, owners (shareholders), and employees should be carefully designed. According to a survey, the company that puts in more thought about the division of profits tends to retain its employees. Dr. Inamori often mentions that his employees should get the same treatment as family members get. I understand that this concept sounds somewhat Japanese, but I believe that employees might leave a company unless its executives and owners treat them as equals and practice profit sharing.
 In Japan, companies hold various events, such as outings or sports-based meetings, to enhance the corporate bonding among the executives and employees.
 Second, a succession plan at both the corporate and department level should be carefully designed by using human resources data. Experts point out that an employee who is aware that he or she would be succeeding a superior is unlikely to quit.
 Third, a career plan that includes training and coaching is highly recommended. My experience suggests that a company spending more time and money on training its employees is likely to face lower levels of attrition.
3. Recruitment & selection
 In the VUCA era, companies pay more attention to hiring people from various backgrounds.
 The executives of the several IT companies that I visited in Silicon Valley were introduced by referring to the iconic companies they had worked for in the past. This means that IT companies would like to demonstrate that they have talented executives with diverse backgrounds. I am sure that experiences in several companies have become necessary in many cases.
 In my view, it would be ideal for executives of the future to have experiences in more than three countries and the ability to speak at least one foreign language. Nestle's executives, for example, are expected to speak several languages. Executives need to understand peoples' ways of thinking in different countries to create new businesses.