Hitachi: Communication Conquers Rumor Mill


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Communicating openly and honestly is the best tactic for dealing with potentially damaging rumors.
Positive employee engagement in the company’s mission, values and goals can support business success and growth. Measuring organizational culture and employee engagement is a vital, first step in making improvements in these areas.

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Hitachi: Communication Conquers Rumor Mill

  1. 1. Volume 1, Issue 3, 2006 casestudy Hitachi: Communication Conquers Rumor Mill In 2001, Hitachi Computer Products’ production facility in Norman, Oklahoma was performing reasonably well, but an employee rumor mill prevailed, conveying unreliable information through the facility. This rumor mill was negatively affecting productivity, quality, customer satisfaction and was undermining employee morale. That’s the situation George Wilson faced when he took over the helm of Hitachi Computer Products (North America), Inc., as the organization’s first non-Japanese president. The production facility in Norman, Oklahoma is a major, manufacturer of custom electronic products for the computer, networking, communications, medical and security industries. the organization’s culture and if left alone, it would create long-term problems for the organization “It was amazing how fast false rumors buzzed in terms of bottom-line performance and overall around the facility, and how information became organizational effectiveness. Hitachi knew that they skewed and misused,” said Wilson. “The most needed to address these problems, and address troubling belief held by many employees was them quickly. that we were planning to shut down, because we weren’t succeeding competitively but weren’t Seeking Help disclosing it.” Wilson and Gary Riggs, vice president of Human Resources and Information Technology for the Wilson believes that employees were producing facility, sought organizational-development and relaying their own misinformation about the help from the local vocational training center. workplace and its business environment because Officials at the Moore Norman Technology Center the company had historically “under-communicated” encouraged Wilson and Riggs to conduct a cultural to its employees. Also, other firms in Hitachi’s assessment by surveying employees. The tool they industry were facing severe business and recommended was the Denison Organizational competitive challenges. Culture Survey (DOCS). In reality, however, the plant was winning new As Wilson and Riggs could have predicted, customers and was poised for sustained growth. their organization’s scores in virtually every area Nonetheless, Wilson, along with other leaders at measured were significantly lower than other Hitachi, were concerned about the plant’s rumor organizations in the Denison Organizational Culture mill and its effects on morale. They were convinced Survey normative database. [Figure 1] that it reflected some fundamental problems in All content © copyright 2005-2006 Denison Consulting, LLC. All rights reserved. l l Page 1
  2. 2. The culture results resonated with the things they were seeing day-to-day in the organization. Armed with data validating their beliefs that the plant’s culture was in need of significant change, the Hitachi leaders developed and implemented a culture improvement plan. Baseline Data Spurs Improvement Plan “The survey gave us real-world information that showed us where we were--a baseline--and provided us with useful insights about what we needed to do,” said Riggs. “In addition, we were able to track the effects of our cultural-improvement strategy with a follow-up survey.” The first order of business was to replace the rumor mill with an effective communications program. Plant leaders mobilized a communications initiative designed to help employees understand and support the facility’s mission, values and goals. Another objective of the effort was to share information on a regular basis about how the plant was performing on key metrics, such as quality, efficiency, waste-reduction, customer satisfaction and profitability. Wilson acknowledges that the communications link with employees was weak prior to this initiative. This was one major reason the rumor mill developed in the first place. “With enhanced communication, we sought to create a unified work team, and a shared understanding that the responsibility for our success is borne by everyone,” said Wilson. Figure 1: DOCS Results 2001-2003 Between 2001 and 2003, Hitachi Computer Products improved an average of 42 percentile points in all twelve indicies. At the same time, they improved their performance in key business areas such as quality, productivity, profitability, customer satisfaction and inventory management according to George Wilson, President of Hitachi Computer Products (North America) Inc. All content © copyright 2005-2006 Denison Consulting, LLC. All rights reserved. l l Page 2
  3. 3. Communication is Key simple: ‘If Hitachi does well, you will do well.’” The communications program included quarterly all-staff meetings and bi-monthly group meetings Culture Improves, Performance Improves with the president. Daily updates via the company’s In 2003, Hitachi Computer Products conducted Intranet and regular postings in the employee caf- a follow-up survey. Scores in virtually every area eteria were also used to improve the link with em- showed dramatic improvements. On average, all ployees. Wilson says workers quickly embraced 12 indices improved by 42 percentile points. [Figure the value of improved communication, and a higher 2] In the Mission trait, where Hitachi placed a large level of trust and understanding between the plant’s part of their emphasis, they averaged a 65 percen- leadership and its employees began to emerge. tile point improvement. The results of their work in quelling the rumor mill can be seen in three key Wilson, Riggs and other members of the leader- indicators on the survey. These survey items rose by ship team at Hitachi made additional organizational as much as 65 percentile points: changes as well. “We completely revamped our bonus, compensation and performance-manage- There is a clear strategy for the future. (Strate- ment systems,” said Wilson. He says the goal was gic Direction & Intent) to more closely link pay with performance in order There is widespread agreement about goals. to reinforce the message that individual results and (Goals & Objectives) company results are interdependent. We have a shared vision of what the organiza- tion will be like in the future. (Vision) “The leaders here have made the expectations for performance very clear, and have created a system Wilson notes that his company’s organizational that rewards people for their contributions to our improvement experience supports the notion that success,” said Riggs. “The message to people is organizational culture has a direct influence on Figure 2: Gap Chart The Gap chart graphically shows differences between two sets of data. Color on the left side of the chart shows where an organization’s scores have gone down. Color on the right shows where an organization’s scores have improved. This Gap chart shows the improvement experienced at Hitachi between 2001 and 2003. All of the 12 Indexes show dramatic improvement. The most marked improvement is shown in the Mission trait. All content © copyright 2005-2006 Denison Consulting, LLC. All rights reserved. l l Page 3
  4. 4. bottom-line performance and overall organizational Lessons Learned: Culture Change at Hitachi effectiveness. “We dramatically improved our Computer Products culture, as reflected in our DOCS results,” he said. “At the same time, our performance in all In the absence of timely, accurate information key business areas also jumped significantly - provided by the organization, employees create including quality, productivity, profitability, customer their own information. satisfaction, and inventory management.” Inaccurate, incomplete or wrong information can undermine employee morale and performance. This observation is common with many organization’s that have implemented culture Using various modes of communication is most change strategies. Developing and communicating helpful in changing employee perspectives and a vision and strategic direction while executing on beliefs. People rely on different media to gather goals and objectives allow employees to see how information, including printed material, electronic messages, billboard postings and employee their efforts impact the organization in the short meetings. term as well as in the long run. Communicating openly and honestly is the best Through their hard work, Hitachi was able to create tactic for dealing with potentially damaging rumors. a shared vision for their organization. The survey tool is not an intervention by itself as we all know. Positive employee engagement in the company’s mission, values and goals can support business To move the needle and improve organizational success and growth. Measuring organizational effectiveness, organizations need to understand culture and employee engagement is a vital, first the results, create an action plan and then monitor step in making improvements in these areas. that plan over time. By doing this successfully, Hitachi was able to close the communication gap between leadership and the staff, thus creating an environment where everyone is working toward a common goal. The results were better performance all around. Related Resources Denison Consulting. (2006). Research Notes: Moore-Norman Technology Center Overview of the Denison Model. Ann Arbor, MI: 4701 12th Avenue NW Author. Norman, Oklahoma 73069 Denison Consulting. (2000). Denison Organizational Culture Survey (DOCS). Ann Arbor, MI: Author. Contact Information Copyright Information Denison Consulting, LLC Copyright 2005-2006 Denison Consulting, LLC 121 West Washington, Suite 201 All Rights Reserved. Ann Arbor, Michigan 48104 Unauthorized reproduction, in any manner, is prohibited. Phone: (734) 302-4002 The Denison model, circumplex and survey are trade- Fax: (734) 302-4023 marks of Denison Consulting, LLC. Email: Version 1.0, October 2006 All content © copyright 2005-2006 Denison Consulting, LLC All rights reserved. l l Page 4