JMA Management News

August, 2002

Counting on Japan's Traditional Power of Reconstruction


Yoshio Tomisaka Chairman Japan Management Association

The Japanese Government announced recently that the nation's economy has reached rock bottom. However, more than ten years of sluggish economy and fears of deflation have already left both society and industry with weakened confidence and vitality. In retrospect, it was at the apex of the bubble economy when Bill Emmott, head of the Tokyo Bureau of the British journal The Economist, wrote "The Sun Also Sets," back in 1989. He predicted that Japan's prosperity, once popular by the phrase "Japan as No. 1," would not hold up for long. He sounded a most perceptive alarm with his book, sensing the first signs of catastrophe in Japan's social fabric, as the country's unprecedented prosperity inspired rampant speculation, arrogance, and conceit. His prediction came true and never truer: Japan's economy slid into a massive decline which went beyond anyone's imagination.
　Readers might remember my comments in the last JMA Newsletter, peppered with statistics from the World Competitiveness Scoreboard, which is issued by International Institute for Management Development (IMD) in Switzerland. Japan led this global scoreboard until 1992, but has since been steadily falling in the rankings every year. In 2002 Japan had retreated all the way to 30th place.
　It is true that various problems face Japan: bad loans, enormous financial deficits, corporate bankruptcy, and soaring unemployment to name a few. No such news can help to see a brighter future. However, as the old saying goes, it is darkest just before dawn. The top priority of Japanese industry today is to let in the harsh light of reality, rebuild our global competitive strength, and spark vitality into the domestic economy.
　Japan has unquestionably bounced back before: rising from the ashes of World War II and surviving two oil crises. In all cases, it surged forward phoenix-like, as corporate management transformed crisis into opportunity. It cannot be far wrong to say there is a hardwired Japanese economic DNA that calls on the nation to unify at such times and this unity produces a remarkable restorative power.
　If we continue to challenge the future, keep our visions and morale high, the sun will likely rise again larger and even more radiant. I therefore maintain that a powerful revival in the Japanese economy is poised to occur in the near future.
　Efficiency and quality management systems that involved all members within a company to improve operational productivity and product quality were what supported Japan's postwar economic growth. Reviving Japan's elasticity, however, requires that the focus shift to "Management of Technology," which refers to the process of developing new technologies and products. One strength of this process is that it goes beyond simply strengthening development capacity of research institutes. Instead it seeks to harness and concentrate power and strength from throughout the company. For example, an R&D department might be integrated more closely with marketing, or cooperation between the R&D department and departments responsible for design, production technologies, and actual production could be enhanced. In short, it seeks to increase cross-functional team activities that link the organization both vertically and horizontally. Such corporate structure can only be possible with a strong encouragement from the board of directors.
　Another strong point of the Management of Technology philosophy is that it places emphasis on the study of human. Management in Japan traditionally focused on improving production processes. Management of Technology however, requires greater focus on the human element. It requires companies to fully utilize the extensive studies that have been conducted on various human characteristics, including psychology, behavioral patterns, personal values, and latent desires. The customer-satisfaction oriented approach is only a foundation of Management of Technology. It involves the study of both the living environment and psychology of the customer, seeks to identify unmet needs, and then looks to fully exploit new technologies in the development of new products. The result: the creation of new customer value.
　It will also be necessary to look at people within organizations from a behavioral science viewpoint and to promote a climate that permits failure and does not discriminate against individuals with different traits.
　It is my belief that the sun will rise again. Management of Technology and human resource development are what Japan needs to ignite a new chain reaction of innovation.

JMA Focus Activities for 2002

Every year, the Japan Management Association (JMA) defines its priority projects, aside from ordinary operations. The following are presented as the themes for 2002.

１.JMA's 60th anniversary as a turning point

Since its founding in 1942, JMA has been engaging in various activities aiming to bolster industry. Starting with plant efficiency improvement, JMA expanded its sphere to improving manufacturing productivity and quality, white collar productivity and administrative efficiency. At the same time, JMA has been focusing its effort on promoting advanced management techniques and upgrading human resources through training and education, including that of top executives. Finally, stimulating industry through technological and industrial promotions is our other domain. JMA has been thus striving to keep abreast with the changing times and to meet the demands of industry.
　This year, as we celebrate the 60th anniversary, JMA will explore the possibility of enhancing its activities to further contribute to industry. Several projects are being designed, including the themes of "global competitiveness," and "top management innovation."

２.Promoting research on competitive HR strategies and developing programs to support HR system development

"Human Resource Strategies to gain Competitive Edge" is the theme of the JMA research project for 2002. Continuing on this line, JMA will undertake a study toward "the true-utilization of intellectual and human capital," which will go beyond the restructuring-based HR strategy that focuses on cost. Strategies that will transform a company into a high value-adding company is another topic we will pursue. We are to define such strategies, present an ideal image for HR administration and organization, and suggest systems that will enable them. Reform of the seniority system is another of our targets, and we aim to present concrete measures and tactics to foster a new corporate climate.

３.Research on management systems programs that emphasize highly original, value-added product development

In simple words, global competitiveness solely depends on how quickly Japanese companies can develop highly original, value-added products (hardware, software, and services) and deliver those products to the market. In the quest for an answer, JMA will promote research on corporate structures and management systems that can truly integrate marketing and development. Other research will focus on the HR development and HR systems, mainly targeting project-leaders. These efforts are expected to lead to the development and introduction of all-new programs.

４.Supporting global project leaders

Leadership is key when it comes to molding together a project team tasked to reform management style with speed. The leader must possess good management sense, a broad perspective, the ability to conceptualize and plan, communication skills, area expertise, evaluation skills, and the ability to deal with global diversity. However, there are as yet few such professional leaders in Japan. JMA will help correct this shortfall with research on the best methodologies and programs for developing a cadre of globally oriented project leaders.

５.Promoting total risk management and its solution system

Though most Japanese companies are aware of the importance of risk management, many lack the ability to deal with it effectively and lag far behind companies of other advanced nations. As businesses become ever more global and information-oriented, corporate management-related risks are growing increasingly complicated and critical. Risk management is an urgent and important matter that impacts corporate governance, ethics, and compliance issues. JMA will research, introduce, and help companies to adopt viable risk management systems. These efforts will target the industrial community as a whole and aid enterprises looking to get a better handle on corporate risk management.

JMA 2002 Research Project
Human Resource Strategies for Competitive Edge

Every year since 1987, Japan Management Association has reviewed an important topical management issue and released a proposal discussing the issue's background, possible avenues of advance, and specific recommended courses of action.
　This year, JMA undertook a practical review of how management can make better use of their human resources. The study followed the theory that Japanese companies must view the use of employees and human resource reform through a new prism if they are to recapture their overwhelming competitive strength. The study's conclusions were published in a 2002 proposal entitled "Human Resource Strategies for Competitive Predominance." A summary of that proposal follows.

JMA 2002 Research
Project Tokyo Assembly

●Key Aspect 1

Top management should take the lead in creating Human Resource Strategies
for Competitive Predominance.

Japanese enterprises have come out of an era in which they boasted overwhelming advantages in quality and productivity. Now they must step back and look at the traditional concepts and practices of personnel management with fresh eyes. Human resource utilization is a topic that urgently requires new thinking in tune with the 21st century.
　The managerial environment of the future must include substantially strengthened links between corporate strategy and human resource strategy. The first steps in building these links fall to management, which must hammer out a creative vision for competitive predominance. Next, they must clearly identify the character traits needed to execute the vision. Finally, management must honestly accept responsibility for reshaping both the company's management and human resource profile to fit that vision.
　Simply writing the words is not enough. Management must take more hands-on initiative when it comes to the training and deployment of human resources strategic to the corporate vision. Making this commitment will require a considerable investment on the part of management, both in time and energy, towards personnel issues.
　A company's commitment to drastic reform must be impressed upon every element, and this is only possible if management demonstrates strong leadership and participates directly in the process. Management will have to get down into the trenches frequently and communicate directly with the workers. By clarifying the concepts underlying the reform effort, management should be able to not only curb the natural unrest felt by the workforce, but also maintain a high level of vitality within the organization. Hand in glove with this is the need to persistently and patiently inspire morale throughout the organization even while a new course for the future is being mapped out.

●Key Aspect 2

Unify the reform of corporate structure and personnel systems
with human resources development.

Companies should always stay focused on establishing competitive predominance. Accordingly, they should look for strategic advantages within their own ranks. That is, they must always be aware of how the skills of their own people can contribute to the company's competitive strength. Even more importantly, unique personnel strengths that a company can tally as proprietary assets must be strategically harnessed. Towards this end, a two-pronged approach that combines education with strategic human resource deployment should be adopted to build a workforce in tune with global realities.
　This does not mean companies should focus solely on developing the skills of upper management. Equally important is the development of character and discernment within the next generation of leaders. It is critically important that companies produce truly competent leaders from within that possess a global perspective and are capable of leading their organizations to competitive predominance.
　An increasingly fluid workforce challenges management to attract and retain employees with technical skills. Likewise, personnel hired midway through the year must be blended into the existing organization as quickly as possible. However, where a company truly places emphasis on originality, differentiating its management, and producing creative products and services, the in-house development of technically skilled employees should become the norm. A company should not rely excessively upon outside recruitment.
　Today, the trend is towards using performance-based measures for all employee advancement and compensation decisions. However, before leaping aboard this bandwagon, companies must thoroughly review their reasons for making a change. This review should include top management and seek to identify how the change will lead to competitive predominance. Such a review will not only clarify the preferred wage and personnel system, but will also identify the principles and philosophy that should guide the company's personnel management efforts. In the end, a skillful implementation should be regarded as more important to increasing competitiveness than the relative merits of the system itself.
　From now on, "pigeonholing" particularly effective personnel cannot be allowed. Training programs must arm personnel with the talent and ability to deal with all situations, even those that occur in a rapidly changing environment. This means companies must look beyond the value of improving individual intellects. Instead, they must consciously create structures and environments that raise the intellectual strength of the organization as a whole.
　The effective management of personnel means placing strategic human resources where they can have the greatest impact on the overall corporate strategy. The mere creation of a system has no meaning. The personnel strategy should be steadfastly implemented with the full understanding that there will be some discord.

●Key Aspect 3

Executives and middle managers need to quickly upgrade
their human resource development, utilization, and evaluation abilities.

Executives and middle managers clearly play an extremely large role in pushing forward Human Resource Strategies for Competitive Predominance, for it is their task to permeate a new set of values throughout every nook and cranny of the organization. This is not just a job for the personnel department. Ranking executives, line supervisors, and floor managers - that is, those highly capable individuals charged with actually using and directing the workforce - should stand at the core of the effort. This is only possible, of course, if the personnel management ability of the entire executive and middle management cadre is up to the challenge of training, effectively using, and evaluating the workforce.
　In fact, if the merit system and specialization become the norm, a traditional strong point of Japanese enterprise, namely the climate of mutual collaboration, will likely degrade. To prevent this, company executives and middle management must work to maintain smooth intra-departmental lines of communication and raise the overall vitality of the organization.
　When it comes to personnel evaluations, supervisors must not blindly look at short-term objectives, be prejudiced by personal considerations, or overstress performance to the exclusion of all else. Rather, these evaluations should be a tool to maintain and enhance the overall vitality of the organization.

●Key Aspect 4

Reform the organizational climate and eliminate the herd instinct.

1. Create a challenging climate and a fighting team spirit.

Corporate management is the art of intellectual, weapon-free combat. Even as a company is proactively positioning its strategic personnel for competitive predominance, it must also keep vitality high if it hopes to stand its ground on the global battlefield. Now is the time to create a challenging climate that brings out a strong, fighting team spirit.
　A company's management structure and the climate it produces should be consciously tailored to stimulate the fighting instinct latent in its employees' subconscious. A part of that structure should be personnel evaluations that include criteria reflecting employee attitudes towards competition. A company that embarks on such a change must do so absolutely determined to see the effort through to the finish.
　Corporate vitality requires more than financial rationality. Trust, employee enthusiasm, and a sense of oneness with the organization are also key. For this reason, management dedication to maintaining both logical and emotional facets at a high level throughout the organization cannot be allowed to flag.

2. Create a progressive climate for product development
　 that willingly embraces ingenuity and originality.

For Japanese companies to survive, they must offer unique merchandise, technologies, and services. Today they are being called upon to pursue continuous development of original products and services and to capture overwhelming momentum within the marketplace. To answer this call, they must systematically develop a corporate structure that promotes development capabilities and roots respect for originality deep within the organization.
　Companies should also be looking to mine promising ideas and knowledge from such non-traditional groups as foreigners, women, the elderly, contract workers, and non-mainstream and minority groups. It is a critical time for developing management expertise within Japanese enterprises. We must ask, "How well will Japanese corporate and project leaders respond to pressures borne of investment risks and fast-moving competition?" "Will they successfully produce original results as they concentrate and winnow development efforts?"

3. Create a vital climate that strategically incorporates diversity.

When the fundamental value of the people who make up human resources takes center stage, organizations tend to become diversified naturally. Consequently, companies must be well prepared to positively welcome an era of diversified human resources.
Where diversity is intentionally incorporated, a company must work positively and deliberately to include the best elements of a heterogeneous workforce. By making the most of these advantages it can reinforce its competitive strength and ensure competitive predominance.
　The final touch of all management reform is the reform of the workplace climate. If this takes place, it will drive change in the people, modify behavior, and lead to competitive predominance. This happy situation will indicate that reform, at last, has been a success.

JMA Group Management Seminar in Paris

Japan Management Association (JMA) played host to the latest JMA Group Management Seminar in Paris, France on April 5. The seminar was part of a series that centers on JMA and Japan Management Association Consultants, Inc. (JMAC) but is being promoted by all the JMA Group. Its goals are twofold: to encourage the exchange of management technique-related information between Japan and the European community and to promote industry in the two regions. This was the third seminar in the series and followed similar events in London in 2000 and Milan last year. It was supported by the Japan External Trade Organization (JETRO), Japan Airlines (JAL), and Club des Investisseurs Japonais.

　JMA Chairman Yoshio Tomisaka kicked off the seminar with some organizer remarks and then turned the floor over to JMA President Nobuo Ogawa who reviewed the business activities that JMA and its affiliated corporations engage in. He was followed by Secretary General Jacques Le Gall of the Canon France Group who gave a presentation entitled "Canon: successful examples of France contributing to global projects", and by Air France Industry's Quality and Management Director Daniel Phippaz. Director Hirofumi Haguihira of the JETRO office in Paris then talked about "The current state of industrial exchange between France and Japan." Other lecturers included RECIF President Bernard Poli and JMAC President Moriyoshi Akiyama, who spoke on "How have Japanese companies overcome crises through their traditional management of quality?" The seminar concluded with a panel discussion involving all the speakers. Seminar attendees ensured a lively exchange of viewpoints.
　About 60 people attended the seminar, including executives from French corporations and other organizations interested in either economic and industrial exchange between Japan and France or Japanese management techniques. Representatives from Japanese companies operating in France also dotted the audience. The sessions were all successful in capturing the audiences' enthusiastic attention. The next JMA Group Management Seminar is scheduled to be held in Asia in April 2003.

Food-Related Exhibitions
FOODEX and HOTERES Convene

Two major food-related exhibitions were hosted by JMA during the four days from March 12-15, 2002.
　The first of these, FOODEX JAPAN 2002, convened for the 27th time at Chiba's Makuhari Messe. Designed to serve all types of food professionals, the show drew 2,300 exhibiting companies from Japan, 72 other countries, and three regions. Comprising 3,333 booths and attracting approximately 90,000 visitors, FOODEX JAPAN's standing as one of the world's premier trade shows was once again reaffirmed.
　FOODEX JAPAN 2002 enjoyed increased participation from within Asia, and Korea, Taiwan, Thailand, China, Singapore, and Sri Lanka were particularly well represented. As a result, the 2002 show boasted the largest Asian presence in FOODEX JAPAN's history. Another prominent characteristic was the large number of food products and ingredients designed to meet consumers' growing demand for health and safety. For more detailed information on FOODEX JAPAN, visit online at http://www.jma.or.jp/FOODEX/.
　HOTERES JAPAN 2002, the largest hospitality industry exhibition in Asia, was the second of the two exhibitions. Held at Tokyo Big Sight, the show convened for the 30th time, and 596 companies from Japan and around the world exhibited from a total of 1,611 booths. Some 80,000 visitors from the leisure, tourism, accommodation, retail, event facility, and construction industries passed through the doors, and displays offering new products and services designed to promote customer satisfaction (CS) were especially popular.

　A significant feature of HOTERES JAPAN 2002 was the World Business Leaders Conference, which commemorated the show's 30th convening. Serving double duty, the conference also commemorated the 60th anniversary of JMA's founding. It was held concurrently with HOTERES JAPAN at Tokyo Big Sight and drew an audience of nearly 900. The conference included lectures by top executives from the service, retail, and manufacturing industries, and a question-and-answer session with the audience. The conference's overriding theme was "Examples of Customer-Satisfaction-Driven Corporate Success."
　The next FOODEX JAPAN and HOTERES JAPAN exhibitions will be held at the same venues, from March 11 to 14, 2003.

FOODEX JAPAN once again attracts an international mix of exhibitors from over 70 countries

JMA GROUP

Japan Management Association（JMA）
Activities:
Survey, research and advisory services／Management education／ Technical conferences and conventions／Management system audit／Others
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Tel．+81-3-3434-1601 Fax．81-3-3434-1087
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Japan Institute of Plant Maintenance （JIPM）
Activities:
Surveys, researches, consulting, training and publishing relating to TPM（Total Productive Maintenance）and plant maintenance
3-1-38 Shibakoen, Minato-ku, Tokyo 1050011
Tel．+81-3-3433-0351 Fax．+81-3-3433-8665
URL．http://www.jipm.or.jp/

Japan Institute of Office Automation（JIOA）
Activities:
OA information exchanges／Surveys, researches and consulting／Others
3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011
Tel．+81-3-3434-6677 Fax．+81-3-3459-1704
URL．http://www.jioa.or.jp/

Japan Society for Technical Communication（JSTC）
Activities:
Undertaking technical document preparations／ English Technical Writing Test／Others
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Tel．+81-3-3434-2350 Fax．+81-3-3434-2486
URL．http://www.jstc.or.jp/

JMA Consultants Inc.（JMAC）
Activities:
Management Consulting／Education and Seminars／Others
3-1-38 Shibakoen, Minato-ku, Tokyo 1058534
Tel．+81-3-3434-7331 Fax．+81-3-3434-6430
URL．http://www.jmac.co.jp/

JMA Systems Corporation（JMAS）
Activities:
Specializing in computer software
3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011
Tel．+81-3-3431-7401 Fax．+81-3-3431-7063
URL．http://www.jmas.co.jp/

JMA Research Institute Inc.（JMAR）
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Surveys and researches／Information services／Others
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Tel．+81-3-3434-6282 Fax．+81-3-3578-7547
URL．http://www.jmar.co.jp/

JMA Management Center Inc.（JMAM）
Activities:
Human Resources and Manpower Development
3-1-38 Shibakoen, Minato-ku, Tokyo 1058520
Tel．+81-3-3434-2777 Fax．+81-3-3434-6204
URL．http://www.jmam.co.jp/

Japan Management Association
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URL : http://www.jma.or.jp/indexeng.htm
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