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How do we approach the promotion of diversity and inclusion?

Maximizing the utilization of talent is the best management strategy

It has been around five years since we, CELM Asia, established our Asia Office in Singapore. Through various projects, we have helped Japanese-owned companies in many countries and regions in Asia and beyond solve their various HR and organizational issues. Japanese-owned companies are often said to respond slowly to change, but management at local subsidiaries are undergoing rapid changes themselves in terms of their approach to organizational and HR-related issues.

For example, in recent years, we have been providing an increasing amount of support to our clients in Asia in the following areas:

1. Talent management topics such as the visualization of talent across Asia and other regions  and
the identification of candidates for management positions
2. Innovative projects focused on local national staff (hereinafter referred to as “NS”)
3. Initiatives aimed at sharing the history, strengths, and fundamental principles of HQ’s in Japan
with NS, and creating a culture in which those principles can be incorporated and ingrained.

These topics themselves have existed for some time, but they did not have as much priority five years ago. Although revisions to processes such as evaluation and remunerationwere underway, there was almost no work done on creating opportunities for HR cultivation.

However, business inevitably slowed down and remained so as talented personnel quit or were poached by competitors. The acquisition and retention of talent took on a sense of impending crisis as one of the most important management issues companies have to face. Thus, these organizational and HR-related initiatives were implemented with a focus on talent acquisition and retention.

These initiatives began to produce results that led directly to positive outcomes for business:

the turnover rate dropped, it became easier to utilize and acquire talent, new businesses could be established, and local sales channels saw a spurt of growth. Moreover, there is a steadily growing recognition that the efficient utilization of talent is itself a strategy for success in business.

 

Asia as the best testing ground

Asia is a melting pot of many different ethnic groups, countries, and cultures. In this part of the world, diversity in people’s abilities and values is said to be one of the most important factors to ensuring that new initiatives succeed. It is also a region of rapid change, with a culture in which overthinking is deemphasized in favor of “just trying it out first.” Moreover, because these Asian regions are located outside of Japan, there are no obstacles such as a large number of stakeholders and imposing organizational barriers that tend to plague the Japan head offices. In other words, Asia can definitely be called one of the best testing grounds for new initiatives.

For example, at a Japanese-owned industrial materials manufacturer, multiple business divisions traditionally had their own respective clients with whom they conducted business, but upon the request of their clients, they began to consolidate their business divisions at their local subsidiaries. Moreover, although they had always conducted product development at the R&D department in Japan, a talented Indian engineer suggested that they could do such work “locally and quickly,” prompting the establishment of an independent local R&D center. After authority over R&D was transferred to this Indian engineer as the head of development, not only did the development process become faster but joint development with local clients became easier to achieve as well, and even sales grew at a higher pace.

In another case, a Japanese-owned precision machinery manufacturer assigned business development staff to individual Asian countries, and furthermore created opportunities to review and evaluate new business ideas with the head of R&D at the head office. Projects that pass such reviews are given funding, creating a path to joint development with external partners and cooperation with similar projects at the head office. This has led to an increase in volunteers for participation in various projects from a variety of countries, served as an opportunity for young people to be selected for participation, and e prompted a variety of proposals for new businesses.

In this way, successively trying out new initiatives in Asia and then adopting them in Japan and other regions is one method by which Japanese companies succeed in business on the global stage, and it is perhaps the fastest way of incorporating diversity and inclusion in a company as well.

 

Three key strategies that Japanese companies should adopt

However, there are certain managerial behaviors and stances that must be adopted by Japanese companies, local Japanese-owned subsidiaries, and management personnel to achieve those ends.

  ■ Build competitive HR frameworks suited to each local region rather than one that’s based on existing frameworks in Japan

Local NS in Asia believe that results and remuneration are directly correlated. Pay is not based on age but is rather bundled together with their position and responsibilities. Moreover, the results of their work are often more harshly evaluated. Thus, a typical Japanese system which tends to have vague job expectations and

a pay/promotion structure based on age leads to dissatisfaction and discomfort for employees in Asia as a whole. This is one of the major reasons why Japanese companies have become less popular in Asia. If we do not consider creating HR strategies and rules that are attractive in the local market and region and continue to base frameworks on those of the head office, talented local personnel will simply leave. Please take this opportunity to take a look at your company’s policies and rules from the perspective of talented local personnel.

■ Listen, while others tell and do

In Asia, it is a commonly accepted fact that all individuals are different from one another, and as a result, people “ask” and “confirm” with one another on a regular basis when working together. Without doing this, there is no way to know whether you have really understood something, or whether the other party has really understood you. Japanese managers at local subsidiaries often lack this level of consideration.
When managers’ basic approach is not to “direct” but rather to “listen” while having others tell and do, a new and different reality becomes apparent. By repeating the cycle of asking and listening while others tell, it should become possible to discover talent who can help improve the business. The duty of Japanese managers is to work closely together with the talent they have discovered, and cultivate their full potential in order to prepare them for succession in the future.

■ Seek questions, not answers

Sometimes Japanese management would tell us: “I asked the NS for opinions and ideas, but they didn’t offer anything useful.” Although there are certainly language barriers, it is possible that the NS were also upset that they could not make any contributions, and in turn they might even have thought that they no longer want to give any opinions or ideas nor be asked for any.
Instead of suddenly asking the NS for answers, it is much easier to start a productive conversation by inviting the staff to ask questions about the topic you wish to discuss instead. In such cases, make sure the staff ask many questions from perspectives that are different from before. For example, if you wish to discuss whether to promote the expansion of a product from urban or local areas, make sure to have your staff consider the matter from a new perspective and they will hopefully come up with questions or concerns regarding an existing strategy such as: “Is an area-based strategy really the best way to promote the expansion of a product?”“How did you come up with such a strategy in the first place?” Seeking questions from staff like this will expand the scope of the topic. When questions do emerge, resist the urge to persuade them to believe your ideas even when you have already formed your own opinions, and try to draw questions from them instead. This way, it will become possible to incorporate others’ ideas and perspectives, and you may discover unexpected solutions to many problems.

In order to succeed in the global market, the aim should not be restricted to the appointment of NS. The goal should be to put the right personnel in the right positions. Whether an employee is NS, Japanese, or from any other country, the priority should be for the most suitable personnel to be placed in the most appropriate position. A company that has the depth and flexibility to manage their talent efficiently will surely succeed in the global market.
We at CELM Asia wish to start this wave of change in Asia, and further change the world from Asia.

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