Revolutionizing Corporate Culture (1):
Human Capital Management Taps Individual Capability

The concept of human capital management redefines human resources as capital, and increasing its value is directly linked to corporate growth. In Japan, this global standard has produced a growing recognition that human capital management is essential in elevating corporate value.

In 2021, Yokogawa established the Future Co-creation Initiative to help develop next-generation leaders. What unique value does this project generate from the viewpoint of Yokogawa's long-term commitment to human capital management?

In this interview, Nobuyuki Tamaki, Project Leader of the Future Co-creation Initiative, invites Mikio Matsui, Vice President of Human Resources and General Affairs Headquarters, to share his opinion on corporate culture.

 

Purpose-driven human resources: enhancing the “power of connectivity” to generate new value

First, what sort of human resources does Yokogawa seek? We can find a clue in “Yokogawa's Purpose,” formalized in May 2021 along with the revised New Medium-term Business Plan and Long-term Business Framework.

“Utilizing our ability to measure and connect, we fulfill our responsibilities for the future of our planet.” This, Yokogawa's Purpose, remains the company's guidepost in the fulfillment of our social mission.

Matsui offers his interpretation of the corporate Purpose. “Yokogawa's corporate philosophy states that 'As a company, our goal is to contribute to the realization of a sustainable society through broad-ranging activities in the areas of measurement, control, and information. 'However, our new Purpose adds the word 'connect,' and I perceive that the 'power of connectivity' redefines our ideal business model. And as someone in the HR field, I think the Purpose serves as a blueprint for the kind of human resource a Yokogawa employee can strive to become.”

Matsui offers his own opinion as rationale: “With an uncertain and rapidly changing future, the nature of client needs and challenges is also fluctuating. I interpret the new Purpose as a resolution for a major shift away from a 'self-reliance approach' focused on offering solutions—goods and services—at the client's workplace to a 'value co-creation promoter approach' based on social issues and running in parallel with diverse clients. This shift allows us to contribute to the creation of new industrial ecosystems and engage in identifying problems and seeking corresponding solutions from a management perspective with digital transformation in mind.”

Tamaki agrees and adds his own insights: “Take climate change, for example. It occurs on a global scale and is having a negative impact on human society. We need industry on board in order to tackle this sort of social problem. And it is corporations that oversee each industry.

“Companies must focus not only on immediate profits, but also on the distant future and on entities with whom they may have no direct contact. However, Yokogawa cannot act alone. That is why the company, which has worked behind the scenes to support the base of diverse industries, must now face the challenges of leading customer management reforms and intercorporate dialogue and collaboration while building new industrial ecosystems and creating value.”

 

The Yokogawa leadership style

So what kind of leader does Yokogawa value? Matsui offers his thoughts: “Yokogawa's Purpose definitively requires that 'we fulfill our responsibilities for the future of our planet.' I relish this phrase, which suggests: 'We will not leave important matters for others to handle, but will create the future through our own resolve and determination.' I hope to transform Yokogawa into a group of employees committed to that vision.

“Moreover, I also believe in empathy and the ability to connect—sharing a vision and connecting people with people, companies with companies, systems with systems, and the planet with our human society. I would like to see that become the goal for Yokogawa's human resources.”

Meanwhile, “the power of connectivity” is also the critical phrase embodying Yokogawa's vision for leadership. “What we're looking for is the antithesis of the charismatic leader of yesterday. We seek missionaries who can convey new value to our clients and members, leading the way and boosting the number of individuals who believe in that value. That's the characteristic we will see in future Yokogawa leaders.”

While leaders must have the ability to connect and co-exist, developing human resources toward that end is not as straightforward as one might think. Companies striving to produce such leaders should do their utmost to provide a variety of training programs.

Matsui spent almost 20 years working overseas, beginning with his previous affiliation with Panasonic Corporation, and has a wealth of experience with all kinds of talented individuals worldwide. Through that experience, he has learned that “even though one can reap certain rewards, there is a limit to the human resource development an HR department can accomplish.”

“When establishing educational goals, you somehow follow a set pattern, a cookie-cutter process. In Japan, we would liken it to energetically pushing rice into a mold to make pressed sushi,” continues Matsui. “When Yokogawa declared that it sought a certain type of human resources, that called for a breakthrough in HR training. That led to the idea of using scenario planning to achieve that level of development.”

 

Discovering the ideal breakthrough in HR development

Project Lotus, launched in December 2019, was the precursor to the Future Co-creation Initiative. Tamaki, with a wealth of experience in management reform projects, led this training project based on scenario planning in a cross-organizational effort, engaging business divisions, corporate planning, and global departments.

Matsui recalls the project's early days: “Tamaki had started out in the business division and had achieved considerable success as a leader for change management. He approached the HR department with a proposal for using scenario planning as a tool in next-generation leadership training. He is a visionary whose head is full of ideas, and he shared the merits of this one—scenario planning—with us.

“When it comes to personnel, I had assumed that HR training has its limitations, but Tamaki's proposal gave me the hope that it might be possible to overcome them. I also felt that if we could depend on someone to propose something interesting, it would be Tamaki.”

Tamaki reflects on his own career. “I've enjoyed a broad range of experiences, from designing production management systems and planning and promoting new businesses to, more recently, management planning, marketing, and planning and promoting global, cross-organizational projects. In Yokogawa, which has a solid vertical organization, I have mainly focused on cross-functional teams engaged in management reform.

“Since that beginning, I've become a believer in the universal global approach of clarifying 'value proposition' (offering our unique corporate value to clients), which allows us to work together and transcend race and nationality to start dialogues with clients. To achieve that, I implemented scenario planning as a tool of engagement, which requires the ability to discuss major issues and view situations from a higher perspective while placing the starting point in the future.”

Scenario planning is a technique that envisions multiple hypothetical future events and determines a strategy to cope with each. Tamaki has more to say on that topic.

“Scenario planning is a way of thinking which sets aside past and current constraints to focus on future social needs, business opportunities, and risks from a global and social perspective. The resulting scenarios become a common language, enabling a constructive discussion on a level playing field that transcends organizations, industries, and job classifications.

“Those who experience the scenario planning process gain foresight, adaptability, and a panoramic perspective. Contemplating uncertainty and complexity with a positive outlook allows one to understand the world as a structured system and dramatically elevates one's ability to engage in diverse environments.

“I've proactively employed this technique for the past dozen or so years, both within and outside the company, in business strategy planning and the HR development of next-generation leaders. When I see young people independently learning and growing, I feel that I would have had more choices in life had I known about this technique when I was young.

“So I suggested a plan I would have favored when I first started out. I wanted to offer young people a secret weapon to help them transcend barriers in work and organizations in an age without clear answers.”

 

(Continued in Part Two)