Cover_final.pdf   8/31/2010   10:37:37 AM                        Paper size: 210mm x 270mm                                ...
Talent Strategies for Innovation: JapanContentsPreface	                                                                   ...
Talent Strategies for Innovation: Japan              © 2010 The Economist Intelligence Unit. All rights reserved. All info...
Talent Strategies for Innovation: JapanPrefaceTalent strategies for innovation: Japan is an Economist Intelligence Unit re...
Talent Strategies for Innovation: Japan              Executive summary              Talent strategies for innovation: Japa...
Talent Strategies for Innovation: JapanIntroduction“T          alent management is the single most important factor for Ja...
Talent Strategies for Innovation: Japan                About the survey                                          (see Char...
Talent Strategies for Innovation: JapanC-Level responsibilityT   he value of talent management is being increasingly recog...
Talent Strategies for Innovation: Japan                                “Because of the nature of our business, making game...
Talent Strategies for Innovation: JapanThe Japanese wayJ   apanese corporate culture is often characterized as being diffe...
Talent Strategies for Innovation: Japan               Chart 4               Which methods are most effective for your orga...
Talent Strategies for Innovation: Japan   The least traditionally Japanese of the three case study companies in this repor...
Talent Strategies for Innovation: Japan               Characteristics of innovative talent               A   t Japanese co...
Talent Strategies for Innovation: Japanin the survey, ”ability to collaborate” was rated highly by exactly the same percen...
Talent Strategies for Innovation: Japan               An evolving concept               T   he awareness of, and focus on,...
Talent Strategies for Innovation: Japanwas the top answer in both surveys (Chart 8).           Chart 8                    ...
Talent Strategies for Innovation: Japan               Conclusion               W       hile parts of the Japanese corporat...
Talent Strategies for Innovation: Japan                             Appendix                                              ...
Appendix                  Talent Strategies for Innovation: JapanSurvey results                          5. What do you re...
Talent Strategies for Innovation: Japan                 Appendix                                                          ...
Appendix                  Talent Strategies for Innovation: JapanSurvey results                          10. What strategi...
Talent Strategies for Innovation: Japan              Appendix                                                             ...
Whilst every effort has been taken to verify the accuracyof this information, neither The Economist IntelligenceUnit Ltd. ...
Cover_final.pdf   8/4/2010   3:10:42 PM                        Paper size: 210mm x 270mm                                  ...
Upcoming SlideShare
Loading in...5
×

Talent strategies for innovation: Japan

931

Published on

Talent strategies for innovation: Japan is an Economist Intelligence Unit research paper, supported by the Government of Ontario, Canada. The Economist Intelligence Unit’s editorial team conducted the interviews, executed the survey and wrote the report. The views and opinions expressed in the report are those of the Economist Intelligence Unit alone.
Gavin Blair was the author of the report and David Line was the editor. Gaddi Tam was responsible for
layout and design.

Published in: Business, News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
931
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
33
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Talent strategies for innovation: Japan"

  1. 1. Cover_final.pdf 8/31/2010 10:37:37 AM Paper size: 210mm x 270mm Talent strategies for innovation: Japan A report from the Economist Intelligence Unit Supported by the Government of Ontario, Canada LONDON 26 Red Lion Square London WC1R 4HQ United Kingdom C Tel: (44.20) 7576 8000 M Fax: (44.20) 7576 8500 Y E-mail: london@eiu.comCMMY NEW YORKCY 750 Third AvenueCMY 5th Floor K New York, NY 10017, US Tel: (1.212) 554 06000 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com
  2. 2. Talent Strategies for Innovation: JapanContentsPreface 3Executive summary 4Introduction 5C-Level responsibility 7 Case study 1: Canon 8The Japanese way 9 Case study 2: Dentsu 11Characteristics of innovative talent 12 Case study 3: Namco Bandai 13An evolving concept 14Conclusion 16Appendix: survey results 17 © Economist Intelligence Unit 2010 1
  3. 3. Talent Strategies for Innovation: Japan © 2010 The Economist Intelligence Unit. All rights reserved. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Economist Intelligence Unit.2 © Economist Intelligence Unit 2010
  4. 4. Talent Strategies for Innovation: JapanPrefaceTalent strategies for innovation: Japan is an Economist Intelligence Unit research paper, supported bythe Government of Ontario, Canada. The Economist Intelligence Unit’s editorial team conducted theinterviews, executed the survey and wrote the report. The views and opinions expressed in the report arethose of the Economist Intelligence Unit alone. Gavin Blair was the author of the report and David Line was the editor. Gaddi Tam was responsible forlayout and design. Our thanks go to all survey respondents and interviewees for their time and insights.September 2010 © Economist Intelligence Unit 2010 3
  5. 5. Talent Strategies for Innovation: Japan Executive summary Talent strategies for innovation: Japan examines how Japanese companies face the challenge of recruiting, nurturing and retaining talented people to ensure their organisations remain innovative. Following on from a global survey of 179 senior executives on the same topic conducted in mid-2009, this paper analyses the results of a new survey of 50 senior executives from Japanese companies, comparing and contrasting them with the results of the earlier research. In doing so it reveals several aspects of talent- management strategy that are unique to Japanese companies—and suggests ways in which the pressures of competition and globalisation are forcing them to evolve these strategies. Its key findings include: • Japanese companies place less emphasis on the importance of talent management in their organisation’s ability to innovate, and consequently delegate responsibility for it lower down the chain of seniority. In the survey 56% of Japanese respondents rate talent management for innovation as “very important”, compared to 75% globally. Consequently just 38% of Japanese companies report that C-level executives have responsibility for the formulation of talent-management strategy, compared to 65% in the global results. But they think this is changing: 51% of respondents in the Japanese survey expect C-suite executives will be more involved in defining strategy in five years’ time, compared to 38% of global companies. • Japanese companies are more likely to employ structured, long-term talent-management strategies, and rely on internal development. Employee loyalty and a lack of labour mobility mean many Japanese companies place a greater emphasis on graduate schemes to attract talent, and internal training schemes to develop it. But these characteristics are changing with the demands of global competition: although 78% of respondents in Japan say training internal staff to fill key positions is a major part of their talent-management strategy now, only 24% expect this to be the case in five years’ time. • Japanese companies tend to value technical knowledge and learning ability over creativity and entrepreneurship. The surveys uphold the common perception that Japanese companies value different attributes in their search for talent than those elsewhere in the world: the most highly-valued attributes are the ability to learn quickly (picked by 78% of respondents) and a high degree of technical knowledge (60%), while the global results placed a higher value on creativity and collaboration. However, many Japanese firms, although emphasising the importance of a unified corporate culture, recognise the need to broaden their search for talented staff to remain innovative. • The pressures of globalisation and competition mean Japanese companies will have to look farther afield for talent. Japanese companies are certainly aware of the need to attract employees from a broader pool of talent: 82% of Japanese companies think the availability of talent is a vital external factor for innovation strategy, far higher than the 55% of global companies that think so. Increasingly this means they will have to go where the talent is: 48% think their companies will “locate innovation centres where there is an abundance of talent” in five years’ time, versus 39% of firms in the global survey.4 © Economist Intelligence Unit 2010
  6. 6. Talent Strategies for Innovation: JapanIntroduction“T alent management is the single most important factor for Japanese companies to continue to operate successfully on the global stage.” So says Michihiro Homma, senior general manager ofthe Human Resources Development Centre at Canon, a camera and office equipment manufacturer andone of Japan’s most successful international brands. That Canon thinks this way is testimony to the evolution of the Japanese corporation. Many of theJapanese companies that were at the forefront of the post-war “economic miracle” have seen their onceseemingly unassailable competitive edges eroded by both lower-cost manufacturing rivals from Asia,and innovative competitors in technology and software from the West. However, even as internationalcompetition has become tougher, faced with a shrinking domestic marketplace, many Japanesecompanies beyond the established electronics and automobiles exporters are seeking to expand theiroperations overseas. With the global marketplace evolving at an ever faster pace, the need to innovate more quickly hasnever been greater. Companies that don’t acquire and nurture the best talent available simply won’tbe able to innovate effectively enough to compete. Research conducted globally by the EconomistIntelligence Unit in 2009 showed that 98% of companies regard talent management as either “important”or “very important” to their ability to innovate. That research, entitled Talent Strategies forChart 1 Innovation (also produced with support fromRespondents by job title the government of Ontario, Canada) took an(% respondents)Other C-level executive in-depth look at the relationship between 54Manager talent management and innovation. This paper, 20 Talent Strategies for Innovation: Japan, based onCEO/President/Managing director 12 interviews and a survey of 50 Japanese companies,CFO/Treasurer/Comptroller looks at the particular challenges facing Japanese 4SVP/VP/Director corporations in nurturing innovative workforces. 4 It also examines the differences in attitudesHead of department 2 and approaches to talent management betweenCIO/Technology director Japanese companies and those surveyed in the 2Board member previous global paper, and whether there are 2 differences between domestic-focused and export-Source: Economist Intelligence Unit oriented firms in Japan. © Economist Intelligence Unit 2010 5
  7. 7. Talent Strategies for Innovation: Japan About the survey (see Chart 1). Some 40% of respondents are in the HR department. • Respondents represented a range of industries, A total of 50 executives from Japanese companies with with 32% coming from the manufacturing sector, annual sales of between US$250m and US$10bn took 22% from retailing and 16% from consumer goods. part in the online survey. Some 72% of respondents • Survey totals may not add to 100 either due to were C-level executives and the remainder were senior rounding or because respondents could pick multiple vice-presidents, vice-presidents, directors or managers answers.6 © Economist Intelligence Unit 2010
  8. 8. Talent Strategies for Innovation: JapanC-Level responsibilityT he value of talent management is being increasingly recognised in Japanese companies, with 100% of survey respondents regarding it as either “important” or “very important” to theirorganisation’s ability to innovate. However, companies worldwide place a slightly greater emphasison this, with 75% in the 2009 survey citing it as “very important”, whereas just 56% in Japan rate itthe same way (see Chart 2). Reflecting this, the responsibility for talent management is still being delegated lower down thecorporate ladder in Japan relative to global practice. At the very top, just 38% of Japanese companiesreport that C-level executives have responsibility for the formulation of talent-management strategy,compared to 65% in the global results. Slightly lower down the chain of command the story is the same: at only 20% of Japanese companiesare senior vice-president, vice-president and director level executives in charge of formulating talent-management strategy, whereas at firms globally the figure is 49%. For the execution of these strategies,only 18% of Japanese companies say senior vice-president, vice-president and director level execs areresponsible, compared to 46% globally. (Respondents in both surveys were able to choose more than onelevel of executive.) Although the surveys show that on average Chart 2Japanese companies are placing less emphasis How important is good talent management to youron talent management than their global organisation’s ability to innovate? (% respondents)counterparts, with fewer senior executives taking Very important Japan Global 56charge of it, many of the nation’s most forward- 75looking organisations are placing it at the heart of Somewhat important 44their business strategy. 23 Not at all important Canon, which has been an early adopter in 0the field, began implementing a formal talent 1 Don’t know/Not applicablemanagement strategy in 2000, and involvement 0 1goes all the way to the top. “Our CEO, [Fujio] Source: Economist Intelligence UnitMitarai, is fully committed to talent managementand puts a lot of effort into its development,” says Mr Homma. It is not only Japan’s technology powerhouses that have taken the importance of talent managementon board. “Our way of innovation is not the technology innovation that Japan is famous for, but creatinginnovation in terms of ideas and ways of working, and developing talent that can do that,” says YotaroOkuda, deputy director of the Corporate Strategy Division at Dentsu, which controls over 20% of theJapanese advertising market. At Namco Bandai, a maker of toys and electronic games with sales in the financial year 2009-10 of¥378.5bn (US$4.2bn), innovation is also essential to the success of the company. © Economist Intelligence Unit 2010 7
  9. 9. Talent Strategies for Innovation: Japan “Because of the nature of our business, making games and toys, if we don’t develop good talent and they don’t enjoy their working environment and create innovative products, we can’t survive as a company,” says Norifumi Hayashi, general manager of human resources. “So the organization is important, but individual development is the most important thing we have.” Case study 1: Canon Program which was created with the IMD business school in Lausanne, Switzerland. This course, for around 20 people per year, is designed for senior foreign managers and Japanese managers With less than half of its 194,000 worldwide workforce based in who work overseas, so is all conducted in English. For senior Japan, and just over a fifth of its US$37bn sales in calendar 2009 executives a Keiei Juku, or intensive management course, focuses on coming from the domestic market, Canon has for decades looked at management training and personal development. “At present [this business through a global perspective. The company has also seen course] is only designed for Japanese executives, but in the future is the core activity of its operations, optical imaging, become almost likely to be taken by foreign executives too,” Mr Homma says. entirely digitised in a relatively short space of time. “In recent Canon was one of the few major manufacturers not to post losses years technological advancement is so fast that the challenge is to during the global slowdown, though Mr Homma is reluctant to credit do business at that speed,” says Michihiro Homma, senior general the company’s talent strategies. “It’s true we didn’t go into the red, manager of the Human Resources Development Centre at Canon. and the managers responsible were brought through by Canon,” The company’s comprehensive talent management system he says, “but we couldn’t say it’s due to our talent management covers employees from new recruits through to senior executives, policies. The program started formally from 2000 so the results and includes three levels of Canon Innovative Leader courses should be visible from here on in.” for managers, which are held at different locations worldwide. In addition, there is a Canon Corporate Executive Development8 © Economist Intelligence Unit 2010
  10. 10. Talent Strategies for Innovation: JapanThe Japanese wayJ apanese corporate culture is often characterized as being different to that in the rest of the business world, and although its uniqueness may sometimes be overstated, there are factors thatdistinguish it from elsewhere. One of these differences is employee loyalty to the company, and acentral tenet of that is not moving from one organisation to another every few years—something thatis “still regarded as kind of immoral in the Japanese business world”, says Izumi Miyajima, deputydirector at the HR Development Department of Dentsu. Although there is more mobility than there once was in the Japanese labour market, at bigcorporations in particular, joining the company on April 1st straight after graduation and remainingthere for decades is still far from unusual. In line with this, a “fast-track scheme for able graduates” iscited as the most highly-rated strategy for recruiting talented staff by 58% of Japanese companies,versus 34% globally. Similarly, the survey results found that a far smaller proportion of Japanesecompanies than global companies regard the “desire of employees to switch jobs frequently” as a majorchallenge to keeping talented staff (20% compared to 43%; Chart 3). “We don’t have a lot of staff wholeave the company,” says Mr Miyajima. Although the lack of mobility between companies undoubtedly makes it more difficult to procuretalent from outside, it does allow organisations to create long-term talent management programmesthat span employees’ working lifetimes. According to the survey, more companies in Japan (66%) regardinternal development as the most effective method for talent management than do global companies(46%; Chart 4). According to Ichiro Hara, general manager of Chart 3Canon’s HR Management Division, the company Which of the following challenges does your organisation currently face in recruiting and retaining talented staff?does have staff join mid-career, “but their numbers Please select all that apply.are pretty low”. With this in mind, Canon has (% respondents) Japan Global Increasing labour costscreated a comprehensive, company-wide “HR 44 42Development System” that implements talent Older employees retiring 36management for its workforce—from new recruits 27 Lack of skilled graduates for entry-level jobsright through to senior management. 34 36 Dentsu too has a very structured career and Desire of employees to switch jobs frequently 20training path for employees to follow through 43 Greater comptition from global marketplacetheir working lives at the company. “Our basic HR 20 45system is different to Western companies because Restrictive labour regulations 16employees don’t change careers often, and usually 16 Restrictive immigration lawsstay with us for 20 or 30 years,” says Mr Miyajima. 4 11“So our development and career plans are based Source: Economist Intelligence Unitaround that fact.” © Economist Intelligence Unit 2010 9
  11. 11. Talent Strategies for Innovation: Japan Chart 4 Which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of 1 to 3 where 1=Very effective and 3=Not at all effective. (% respondents) Japan: Very effective 1 2 Not at all effective 3 Don’t know/Not applicable Global: Very effective 1 2 Not at all effective 3 Don’t know/Not applicable Internal development 66 28 4 2 46 49 3 2 Open competition 44 42 12 2 22 54 18 7 Referrals through formal networks (eg, associations) 37 53 10 19 56 21 3 Referrals through informal networks 20 52 26 2 36 43 18 5 Recruiting from competitors 18 58 22 2 20 52 20 7 Source: Economist Intelligence Unit Chart 5 Which of the following statements are true about your organisation’s talent-management strategy now, and which will be true in the next five years? Please select those with which you agree. My organisation: (% respondents, select answers) Today In five years Looks outside country borders for talent 42 40 Trains and develops staff internally to fill key positions 78 24 Moves staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Does not consider availability of talent in defining overall strategy 48 36 Source: Economist Intelligence Unit10 © Economist Intelligence Unit 2010
  12. 12. Talent Strategies for Innovation: Japan The least traditionally Japanese of the three case study companies in this report, Namco Bandai,takes a more flexible approach to career planning. “We have no age-based promotions at all; people whoproduce results get rewarded,” says Mr Hayashi. Most staff training programmes are negotiated betweenthe company and individual employees, who are “rarely forced to go on courses”, Mr Hayashi says.Employees joining mid-career is also fairly common at Namco Bandai, reports Mr Hayashi, who himselfhad stints in human resources at a number of other companies before his present position. Despite Japan’s relatively strict immigration laws, only 4% of Japanese companies surveyed regardthem as a major challenge in recruiting and retaining talented staff, below the 11% that hold thatopinion globally. Dentsu’s Mr Miyajima concedes that while Japanese companies are “behind in terms ofdiversity, particularly with regard to gender equality and foreign employees”, he believes the situation isimproving. The current norm of training internal staff to fill key positions looks set to change dramatically,according to the survey results. Although 78% of respondents say this is true of their talent-managementstrategy now, only 24% expect this to be the case in five years’ time (Chart 5). However, only 40% ofrespondents believe Japanese companies will look outside the country’s borders for talent in five years’time, compared to 42% today, suggesting slow progress on the lack of diversity Mr Miyajima highlights. Case study 2: Dentsu 2006. These off-site courses were initially run by lecturers from the US advertising world, but they have been gradually replaced with Dentsu employees who have taken the courses themselves. Dominating its domestic advertising market to the extent that it is the In April this year, Dentsu launched two new talent initiatives: the envy of agencies worldwide, Dentsu has a history that goes back over Dentsu Management Institute—a one year course with Hitotsubashi a century. Even in the perfect storm that devastated the media and University Graduate School of International Corporate Strategy advertising industries through 2009, the group managed to pull in in Tokyo—and Dentsu Management Juku (cram school), a three- sales of ¥1.678trn (US$19.3bn) and return to the black. month course. There are two main reasons for implementing these Although in many ways Dentsu is a traditional Japanese company now, according to Yotaro Okuda, deputy director of the Corporate with many employees who stay with the organisation for their Strategy Division: “Firstly, the digital media environment that whole working lives, its need for creative innovation and overseas Dentsu and our clients are operating in has become extremely expansion have meant it places a great deal of emphasis on talent- complex. [Secondly,] we also need to understand the way our management strategy. Dentsu created a training course jointly with clients’ businesses work and their management strategies in order Virginia Commonwealth University’s Brandcenter that started in to respond to their needs.” © Economist Intelligence Unit 2010 11
  13. 13. Talent Strategies for Innovation: Japan Characteristics of innovative talent A t Japanese companies, the most highly-valued attributes for innovation in employees are the ability to learn quickly (picked by 78% of respondents) and a high degree of technical knowledge (60%)—both selected by more than twice the percentage of Japanese firms than their global counterparts. Creativity, however, is less highly prized by Japanese firms (34%, compared to 51% globally). Entrepreneurial skills too are lower down the list of attributes necessary for successful innovation, picked by only 4% of Japanese companies, compared to 22% in the global survey (Chart 6). While these findings may be in line with the general perception of a Japanese corporate world that regards technical knowledge and corporate conformity as more important than creative thinking, this does not necessarily reflect the approaches of Japan’s more forward-looking companies. And while this traditional characterisation emphasises group responsibility and collaboration over individual enterprise, Chart 6 What do you regard as the most important skills required for successful innovation in your organisation? (% respondents) Japan Global Ability to learn quickly 78 36 High degree of technical knowledge 60 23 Ability to collaborate 40 40 Creativity 34 51 Ability to solve problems 34 30 Self-motivation 6 25 RD management skills 4 7 Entrepreneurial skills 4 22 Knowledge transfer skills 2 17 Networking skills 2 11 Ability to work across functions 2 23 Source: Economist Intelligence Unit12 © Economist Intelligence Unit 2010
  14. 14. Talent Strategies for Innovation: Japanin the survey, ”ability to collaborate” was rated highly by exactly the same percentage of companies(40%) in both the Japanese and global surveys. Canon, Dentsu and Namco Bandai all report that on-the-job training and job rotation are crucialto nurturing an innovative workforce that understands the needs of the entire organisation. “Havingemployees experience various aspects of our business develops the best talent, but it’s difficult to dowell—it’s our biggest challenge regarding talent management,” says Canon’s Mr Hara. This view is echoedby Namco Bandai’s Mr Hayashi, who says that “managers not wanting to let their most capable staff moveto other divisions” is one of the biggest barriers to effective talent management in the organisation. Another problem encountered at Dentsu is that “sections are often so busy that there is not enoughtime to dedicate to on-the-job training, or send staff away on training courses,” reports Mr Miyajima.Dentsu’s solution is the implementation of short-term intensive training programmes. Both Canon and Dentsu have a clearly defined company ”way”, and educating employees in this isintegral to their talent-management strategies. Canon’s “San-ji”, or ”three selfs”, are pillars of itscorporate philosophy: self-motivation, self-management and self-awareness. Meanwhile, Yoji Ando,senior manager at Dentsu’s Recruiting Talent Development Department, describes the overarching goalof the company’s training programmes as: “to create value, increase the capabilities of employees andpass on the ‘Dentsu Way’ to the next generation”. Whereas Namco Bandai “doesn’t have a strict group‘way’ like some companies”, says Mr Hayashi. “We have policies but don’t dictate exactly how thingsshould be done at ground level.” Case study 3: Namco Bandai Restart Plan”, with one of the main pillars being to “transform into a speedy group”. According to Norifumi Hayashi, general manager of human resources, “This means we make decisions fast, develop While the number of C-suite executive titles seems to be perpetually fast and bring new products to market fast—the product cycle in our expanding, the Bandai division of Namco Bandai must certainly be business is very quick. Young people are more suited to this way of the only company with a CGO, a Chief Gundam Officer, who manages working so we give them a lot of responsibility early on. So before the brand of video games, toys and model figures based around the they make big mistakes, they are allowed to make small ones.” company’s iconic, and highly profitable, “robot-suit” franchise. Namco Bandai also brings in more staff mid-career than most As befits a creator of fantastical games and toys, the company Japanese companies because “any corporate mono-culture has its has an unorthodox approach to talent management. This doesn’t limits, so stimulation from outside is essential for innovation and mean it takes the issue lightly, just that it operates in a world of development,” according to Mr Hayashi. It is also less concerned unconventional creativity and adjusts its strategies accordingly. about staff leaving. “We don’t spend money on retention, on Nor has it been insulated from the global slowdown. Despite bonuses and the like. Even if an employee is exceptional, if their the oft-touted recession-proof nature of the entertainment heart is not in the job, we don’t need them,” he adds. “I think the industries, it did suffer a fall in sales last year that resulted in it best way is to try and create a company where employees want to posting a record loss. In response, this year it launched a “Group work.” © Economist Intelligence Unit 2010 13
  15. 15. Talent Strategies for Innovation: Japan An evolving concept T he awareness of, and focus on, talent-management strategy at Japanese companies looks set to increase. While 56% of Japanese companies currently think that a lack of involvement from C-suite executives in shaping talent strategy is a major internal barrier to innovation, compared to 31% of global firms, some 51% of respondents in the Japanese survey expect C-suite executives will be more involved in defining strategy in five years’ time, compared to 39% of global companies (see Chart 7). Dentsu’s Mr Miyajima believes that the top executives in his company “will be more involved in talent management for innovation in five years, and that will make it easier for our [HR] work too”. Chart 7a Are C-level executives in your organisation more or less involved in defining talent strategy now than they were five years ago? How involved will they be in five years? (% respondents) Japan: More involved The same Less involved Don’t know/Not applicable Global: More involved The same Less involved Don’t know/Not applicable Today 38 46 6 10 51 41 6 3 In five years 51 39 4 6 39 44 12 5 Source: Economist Intelligence Unit Like companies everywhere, the biggest Chart 7b challenges facing Japanese organisations are What are the main internal barriers to successful talent management for innovation in your organisation? related to globalisation. These range from the (% respondents) Japan Global fact that “business opportunities are appearing C-suite executives are not involved enough in shaping talent strategy 56 in places where they didn’t previously occur,” as 31 Dentsu’s Mr Miyajima puts it, through to “how to Source: Economist Intelligence Unit work effectively with foreign board members, or a future number one or number two at the company”, says Namco Bandai’s Mr Hayashi. The challenges of working with foreign staff and managing overseas subsidiaries are recurring themes for Japanese companies planning talent-management strategies to train their staff for business in an increasingly globalised future. “Taking over foreign companies and having employees that are able to run them is one of the biggest challenges facing Canon,” says Mr Hara. Even Dentsu, often seen as a traditional domestic Japanese firm, already has more staff overseas than the 6,500 who work at its huge Tokyo headquarters. This figure is set to grow, notes Mr Okuda, as Dentsu is “expanding as a group, often through MA—and if we are taking over companies, then of course we have to nurture talent that can manage them.” Already 82% of Japanese companies think the availability of talent is a vital external factor for innovation strategy, considerably higher than the 55% of global companies that think so—though it14 © Economist Intelligence Unit 2010
  16. 16. Talent Strategies for Innovation: Japanwas the top answer in both surveys (Chart 8). Chart 8 In developing a strategy for innovation, what external factorsSimilarly, 48% of Japanese respondents think their are most important for your organisation? (Top 3 only)companies will “locate innovation centres where (% respondents) Japanthere is an abundance of talent” in five years’ time, Availability of talentversus 39% of firms in the global survey (Chart 5). 82 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 38 Cluster of companies/institutions in the same industry 30 Global Availability of talent 55 Business environment (eg, tolerance of risk) 41 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 29 Source: Economist Intelligence Unit © Economist Intelligence Unit 2010 15
  17. 17. Talent Strategies for Innovation: Japan Conclusion W hile parts of the Japanese corporate world may have begun to adopt formal talent management programmes slower than their overseas counterparts, many of its leading and forward-looking companies have long been aiming for global best practices in the discipline. But even these acknowledge that there is still a way to go. Even Canon, which has operated successfully worldwide for decades, acknowledges that it can’t rest on its laurels. “The other big challenge for us is creating a fully global talent management system, which isn’t in place yet,” says the company’s Mr Homma. “We have to create one that can respond to the emerging markets of Asia and other developing countries, and it’s not easy to predict what will happen in those areas.” As the shrinking population in Japan continues to squeeze the domestic market, the numbers of Japanese companies seeking to expand operations overseas is set to grow. With that, as the survey and case studies illustrate, there will be a growing emphasis on the importance of talent management for innovation.16 © Economist Intelligence Unit 2010
  18. 18. Talent Strategies for Innovation: Japan Appendix Survey resultsAppendix: survey resultsIn which country are you personally located? In which country is your company headquartered?(% respondents) (% respondents)Japan Japan 100 1001. How important is good talent management to your 2. Who is (are) the most senior executive(s) with organisation’s ability to innovate? responsibility to formulate and execute your organisation’s (% respondents) talent strategy? Please select all that apply.Very important (% respondents) Formulate Execute 56 C-level executiveSomewhat important 38 44 28 SVP/VP/Director 20 24 18 Head of business unit 30 30 Head of department 22 10 Manager 16 123. Are C-level executives in your organisation more or less involved in defining talent strategy now than they were five years ago? How involved will they be in five years? (% respondents) More involved The same Less involved Don’t know/Not applicableToday 38 46 6 10In five years 51 39 4 64. In your opinion, how important are the following for innovation? Please rate where 1=Very important and 3=Not important. (% respondents) Very important 1 2 Not important 3 Don’t know/Not applicablePolicies to attract and retain qualified professionals 70 28 2Location within a cluster (geographic concentrations of companies and institutions operating in a particular field) 33 42 17 8Investment in research and development 53 33 14Strong channels of communication with customers 84 16Strong relationships with suppliers 74 24 2 © Economist Intelligence Unit 2010 17
  19. 19. Appendix Talent Strategies for Innovation: JapanSurvey results 5. What do you regard as the most important skills required for successful innovation in your organisation? Please select up to three. (% respondents) Ability to learn quickly 78 High degree of technical knowledge 60 Ability to collaborate 40 Creativity 34 Ability to solve problems 34 Self-motivation 6 RD management skills 4 Entrepreneurial skills 4 Knowledge transfer skills 2 Networking skills 2 Ability to work across functions 2 Other, please specify 2 6. In developing a strategy for innovation, what external factors are most important for your organisation? Please select up to three. (% respondents) Availability of talent 82 Access to people with flexibility with regard to work demands (eg, hours, mobility, relocation) 38 Cluster of companies/institutions in the same industry 30 Financial and/or fiscal incentives 26 Cost/availability of capital 26 Protection of intellectual property rights 14 Quality of education system 14 Proximity to universities and other sources of fundamental research 4 Business environment (eg, tolerance of risk) 4 Diversity of available talent 4 Liberal labour laws (eg, easy to hire and fire) 218 © Economist Intelligence Unit 2010
  20. 20. Talent Strategies for Innovation: Japan Appendix Survey results7. In your opinion, which methods are most effective for your organisation in recruiting talent for innovation? Please rate on a scale of 1 to 3 where 1=Very effective and 3=Not at all effective. (% respondents) Very effective 1 2 Not at all effective 3 Don’t know/Not applicableInternal development 66 28 4 2Open competition 44 42 12 2Referrals through formal networks (eg, associations) 37 53 10Referrals through informal networks 20 52 26 2Recruiting from competitors 18 58 22 28. What are the main internal barriers to successful talent management for innovation in your organisation? Please select all that apply. (% respondents)C-suite executives are not involved enough in shaping talent strategy 56Talent strategy not effectively aligned with business strategy 56Not enough collaboration and resource-sharing among different parts of the organisation 48Reluctance to look outside the organisation for talent 28Lack of relevant training opportunities for people within the organisation 26Lack of resources in our community for developing workforce skills 24Lack of labour pool with appropriate skills 22Other, please specify 29. Which of the following challenges does your organisation currently face in recruiting and retaining talented staff? Please select all that apply. (% respondents)Increasing labour costs 44Older employees retiring 36Lack of skilled graduates for entry-level jobs 34Desire of employees to switch jobs frequently 20Greater competition from global marketplace 20Restrictive labour regulations 16Restrictive immigration laws 4Other, please specify 2 © Economist Intelligence Unit 2010 19
  21. 21. Appendix Talent Strategies for Innovation: JapanSurvey results 10. What strategies does your organisation use for attracting and retaining the most talented staff? Please select all that apply. (% respondents) Fast-track scheme for able graduates 58 Individual coaching and mentoring 52 Opportunity to train for industry qualifications 44 Flexible working opportunities 24 Rewards and incentive schemes for achievements 24 Employee perquisites such as health club membership 22 Bonus offered when new hire joins from a rival firm (eg, golden hellos) 20 Opportunity to move between countries 18 On-site child care 10 Rewards for loyalty 10 Other, please specify 2 11. Which of the following statements are true about your organisation’s talent-management strategy now, and which will be true in the next five years? Please select those with which you agree. My organisation: (% respondents) Today In five years Looks outside country borders for talent 42 40 Trains and develops staff internally to fill key positions 78 24 Gives the C-suite main responsibility for talent management 74 26 Moves staff between countries to address talent gaps 40 38 Locates innovation centres where there is an abundance of talent 38 48 Seeks to create an environment that is conducive to innovation 54 46 Does not consider availability of talent in defining overall strategy 48 3620 © Economist Intelligence Unit 2010
  22. 22. Talent Strategies for Innovation: Japan Appendix Survey results12. What is your primary industry? 14. Which of the following best describes your title? (% respondents) (% respondents)Manufacturing Board member 32 2Retailing CEO/President/Managing director 22 12Consumer goods CFO/Treasurer/Comptroller 16 4Construction and real estate CIO/Technology director 4 2Entertainment, media and publishing Other C-level executive 4 54IT and technology SVP/VP/Director 4 4Logistics and distribution Head of department 4 2Telecommunications Manager 4 20Chemicals 2Energy and natural resources 2Financial services 15. What are your organisations global annual revenues in 2 US dollars? (% respondents)Professional services 2 $250m to $500m 54Transportation, travel and tourism 2 $500m to $1bn 28 $1bn to $5bn 14 $5bn to $10bn13. What are your main functional roles? Please choose no 4 more than three functions. (% respondents)Human resources 40General management 32Customer service 16Finance 10Information and research 8Legal 8Marketing and sales 8Risk 8Strategy and business development 4IT 2Other 2 © Economist Intelligence Unit 2010 21
  23. 23. Whilst every effort has been taken to verify the accuracyof this information, neither The Economist IntelligenceUnit Ltd. nor the Government of Ontario, Canada canaccept any responsibility or liability for reliance by anyperson on this report or any of the information, opinionsor conclusions set out herein.Cover image - Asia Images/Getty Images
  24. 24. Cover_final.pdf 8/4/2010 3:10:42 PM Paper size: 210mm x 270mm Talent strategies for innovation: Japan LONDON 26 Red Lion Square An Economist Intelligence Unit research paper London WC1R 4HQ Sponsored by the Government of Ontario United Kingdom C Tel: (44.20) 7576 8000 M Fax: (44.20) 7576 8500 Y E-mail: london@eiu.comCMMY NEW YORKCY 750 Third AvenueCMY 5th Floor K New York, NY 10017, US Tel: (1.212) 554 06000 Fax: (1.212) 586 0248 E-mail: newyork@eiu.com HONG KONG 6001, Central Plaza 18 Harbour Road Wanchai Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: hongkong@eiu.com GENEVA Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: geneva@eiu.com

×