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What Hitachi can teach us about managing people?

Iain Henderson

Faculty Blog

Hitachi

Hitachi (Photo credit: Andyroo1964)

The UK’s CIPD published an interesting article recently on the people-management culture within the Japanese multinational engineering company Hitachi (People Management, 25 May 2014) .

Hitachi’s £1.2 billion contract to supply the East Coast main line, and its forthcoming deal for the Great Western line, mean that its trains will soon be as well known in the UK as they are in Japan, where it designed and constructed the famous ‘bullet train’. “Most people think we only make TVs,” says Stephen Pierce, HR director of Hitachi Europe. “Or they had one of our cassette players or CD players as a kid.” But Hitachi also provides power systems, construction, and consultancy and IT services. And nuclear power – the company is seeking planning permission to build new reactors in Anglesey and Gloucestershire which could provide employment for thousands.

What is the secret of it’s success? One factor must be how it harnesses the talents of its people.

Stephen Pierce says that Hitachi’s consensual culture means you have to persuade rather than prescribe. Hitachi, like Toyota operates, on the concept of nemawashi (roughly, consensus-building). “It means we don’t mandate change,” says Pierce. “We have to work with companies, persuade and influence them in order to create change. It gives businesses the freedom to run themselves in a way that is appropriate for their own markets and customers. “It’s a bottom-up and top-down model, whereas other companies are focused on the top-down. It doesn’t shirk decisions – the top people still make a call when they need to, but it ensures a greater degree of engagement before you get to that point.” Hitachi’s traditional values (“harmony, sincerity and pioneering spirit”) emphasise collaboration.

Pierce says life at Hitachi has taught him four important lessons:

‘Networking is king’

“There’s not many meetings where you sit round in a room, debate what you’re going to do, make a decision, then go out and do it.” Instead, building an internal network and gaining trust and influence over time is the way to get things done.

‘Ambiguity is OK’

If you’re not flexible and need to be told exactly what to do, you may not prosper at Hitachi. “Japanese culture is comfortable with ambiguity,” says Pierce. “It gives you a gap and tells you to go and fill it with the expertise you were hired for.” That’s empowering for most, he adds, but it requires a certain type of mindset. “You need some skills in Hitachi that are perhaps less important in other companies. You need consensus-building and you also need patience, as well as a level of emotional intelligence to get people on board with where you need to go. But once you have trust, you get a lot of freedom.”

‘Don’t outsource talent’

The new rail contract will also mean an £82 million factory in County Durham, employing more than 700 people. Two thousand have already expressed an interest in working there, but Pierce will handle recruitment the way he always has – resisting the temptation to outsource or use a bulk handler and instead constructing an internal team of specialists who understand the business and will deliver the right sort of candidates.

“We’re not like Tesco, where you have one brand everyone knows and a small number of similar jobs,” he says. “We have so many companies and customers, and so much complexity, that understanding the complexity makes recruitment work better for us. Where you have a clear economy of scale, you might look to do it differently – we’re not wedded to the model forever, but it works for us.”

‘Offer a sympathetic ear’

The single best way to advance both your own career and the HR cause is to be a good listener, he believes. “When an HR director is appointed, it’s typically by the CEO or MD so they’ve got an open door. That person wants them to be there.  But being the MD is a very lonely business. Who can they talk to? Typically nobody, because they’re the boss and they can’t have the conversations with a member of staff that they’d like to have. Very often they use the HR director as a sounding board.”

 

‘Networking is king’; ‘Ambiguity is OK’; ‘ Don’t outsource talent’; ‘ Offer a sympathetic ear’? Of course in Organisational Behaviour we have been saying that for years ……