My Essay for The Japan Bearing Industry Association Journal, "Bearing" (March 2021)

5. 1
< English Translation >
What I have learned in the trend of Globalization
－Essay for The Japan Bearing Industry Association Journal, Bearing (March 2021)－
Tetsuya Sogo, CFO of NTN Corporation
When I was 29 years old, I participated in the start-up of a new plant to manufacture HUB
bearings for automobiles as a chief engineer in the suburbs of Chicago, USA. This was my first
overseas assignment for seven and a half years from 1989 to 1996. Although we introduced the
most advanced production equipment and technology of the time from Japan, we struggled in a
situation where productivity was much lower than that of the mother factory in Japan. In my
first overseas assignment, I faced problems such as low employee skills, high absenteeism and
turnover rates. I wondered what the essential management problem was and what needed to be
changed. I eventually learned how I could maximize the motivation of local human resources, as
well as how to evaluate and treat them fairly, in other words, I realized that people's behavior
varies greatly depending on the standards by which they are evaluated. The point of this is to
motivate employees with a new evaluation system that objectively and fairly evaluates skills
and performance in a way that everyone can understand, and clearly links this to salary,
although this may sound too obvious. The ambiguous seniority system had been said to be one of
the main characteristics of Japanese employment system, however this new clear system based
on skill points and contribution reviews revitalized the entire plant, and the company that had
been losing money suddenly became profitable a year later, a result that surprised even myself.
This experience was the starting point for my strong recognition of the importance of “Learning
Organization”, which was advocated by Professor Peter Senge of MIT at the time, meaning how
important it is to make employees eager to learn and bring out their motivation, and how people
who experience a sense of accomplishment together, not only as individuals but also as a team,
grow greatly.
In introducing this new employment system, I explained to all employees directly why we
were changing the evaluation system, what we were aiming for, and how it was consistent with
the company's philosophy and vision, as well as the strategies and policies of the company.
Under the 3 shifts working system for full production, I talked thoroughly with all employees in
groups in the morning (1st shift), afternoon (2nd shift), and even in the middle of the night (3rd
shift) to answer all their questions and doubts. I was able to do this because I was still young
and physically strong, but I think this thorough conversation was the key to the success that
followed. I learned that even if my English was not good, I was able to convey what I wanted to
say with passion from my whole body, that I needed English that would move people’s hearts
rather than simply fluent English, and that fluent English was meaningless without an open
mind and passion for change. The direct dialog often gave me eye-opening realizations. For
example, based on Japanese way of thinking, I set the minimum assignment period at the same
grade in the personnel evaluation at two years or three years because this was a natural
approach in Japan. However, one of the female operators at the assembly section criticized me
for killing the potential of geniuses and violating the corporate philosophy of “respect and full
consideration for each individual employee”. In reality, such a genius is unlikely to emerge, but I
was convinced that this kind of thinking was important, and on the spot, I removed the concept
of the minimum assignment period from the system as unnecessary. Also, every quarter, we
posted the names of employees who had been upgraded in the lunchroom to congratulate them,
but a group of employees from Vietnam asked us to stop. Some people felt embarrassed and
ashamed to be promoted to a lower grade behind everyone else, while in some cultures like

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Japanese culture, people want to be the same as everyone else. What is needed in the global
stage is the equality of opportunity, not equality of outcome, and we should celebrate those who
work hard, even if they are behind others; this is the idea of people who are educated in the
United States. However, since there was no need to impose such a majority idea and dare to
make some employees feel uncomfortable to celebrate, we stopped this celebration system.
People's feelings are difficult to deal with. Factory workers are especially diverse. Even though
they are Americans, not all of them are born and educated in the United States. People from all
over the world—Mexico, China, India, Russia, Ethiopia, Vietnam, and so forth—were working
together. Therefore, basically, a-un no kokyu (communicating and agreeing with each other
without exchanging words) does not work as it does in Japan. In Japan, from the time children
are in elementary school, their teachers keep telling them to “think from the other person's
point of view, and imagine how you would feel if you were in the other person's position”, but
this method would not be effective if we were born and raised in a different environment or with
a different way of thinking. It is rather dangerous to think that because you feel this way, the
other person will feel the same way. The issue of age discrimination was something that we
needed to be aware of, especially as Japanese managers.
At that time, I wanted to learn the American way of management while going through a
lot of trials and errors at the manufacturing site in the U.S. I therefore studied for Executive
MBA at Northwestern University (Kellogg) on the weekends while working for two years from
1994 to 1996. As an engineer, it was a refreshing and eye-opening experience for me, especially
in the areas of strategy, finance, and marketing. The admission interview was held in the
building specifically designated for Executive MBA, which was like a first-class hotel. I took the
elevator and was ushered into an office labeled Assistant Dean, where I was greeted by a
woman named Erica. At first, I thought she was a secretary, but she was the assistant dean. I
imagined that there would be several interviewers and I would be seated in front of them and
asked difficult questions. Yet, in the luxurious reception room, I was told, "Would you like coffee
or tea?” and "I'll be listening to you for the next hour." Then the one-on-one interview began on
the spot. The interview was completely different from what I had expected, and I had never sat
in an interview like this before. Yet, I think you can see many different sides of a person by
suddenly giving them a certain amount of time and letting them talk completely freely,
whatever and however they talk. Erica didn't ask any questions, just took notes on what I was
saying, except for the occasional confirmation of what I meant. I think it is extremely important,
especially when working on the global stage, to make sure that what you want to say, your
thoughts, and enthusiasm are conveyed to the right person in an hour if you are given an hour,
or 90 seconds if you are given 90 seconds. It is also very difficult to talk about one's work
without using any jargon and in a way that everyone can understand. Yet, a professional must
be able to explain complicated things in a way that is easy to understand, and if you can't do
that, it means you don't know your job. At the end, Erica said, “Officially, the faculty committee
will go through document reviews and decide whether you will be admitted or not, but you will
probably be admitted.” Erica was a dashing, tall woman, a little older than me. I named my first
daughter, who was born just before I entered the Executive MBA program, Erica after her. My
first daughter is now a working adult, so my interview with Erica was a long time ago, but it
still left a strong impression on me.
After graduating from Northwestern and returning to Japan in 1996, I worked for 15 years
until my second assignment in the U.S. in 2011 in the Corporate Planning Department at the
head office, where I formulated medium-term management plans and worked intensively on
global alliances and cross-border M&A. I have experienced many negotiations by comparing
wits with the other side, bargaining, probing each other's true intentions, and looking at things

7. 3
from all angles. However, in the end, I keenly realized that no alliance would be successful
unless you can build a relationship of trust with your negotiating partner. In the midterm
management plan, I learned that what is important is not only the competitive strategy and
theoretical framework but also how to convince each department, business unit and region to
move forward and that so-called facilitation is important in order to achieve results. Although
the times will continue to change and progress, I feel that direct face-to-face communication
between people is extremely important, both within and outside the company.
In my second assignment to the U.S. for seven years from 2011 to 2018 as CEO of NTN
Americas Region, I had to make decisions on a daily basis in a cross-cultural environment,
especially in the entire Americas region that included South America, where no one knew the
correct answer to management questions. I felt that it was very important to have the ability to
sense the situation and atmosphere of an organization, which was difficult to express in words,
through various interactions. All of the issues that I faced on a daily basis in the field were not
something that could be analyzed logically like a computer that finds the correct answer. Rather,
I needed to quickly make a better overall decision on the spot, and to do so, I had to polish my
ability and sense to accurately perceive fundamental issues, and face-to-face communication
was essential in doing so. In the MBA program, subjects such as strategy, marketing, and
finance, were very popular, and there were many famous professors, so I put a lot of energy into
studying them. On the other hand, subjects such as organizational theory and HR, were not so
popular at that time. However, I feel that organizational theory and HR are becoming more and
more important as I get older. During my assignment to the U.S. back when I was young, I
challenged myself to make various changes to motivate the employees at a manufacturing
company. In my second assignment to the U.S., on the other hand, localization of upper
management was a major issue to strengthen the organization in the Americas, including South
America. So I had to entrust business expansion to the people who knew the markets of each
country the best. For the Japanese people on overseas assignment, it is necessary to clarify why
things cannot be conducted locally. It is easy and comfortable for Japanese people to
communicate with each other, while localization is very tiring due to the language problem
among other difficulties, but I believed that there would be no future if we shied away from it.
My belief that globalization is based on “motivating local talented people to fully
demonstrate their abilities” has not changed at all since my first assignment to the United
States. I want to realize a global learning organization that can operate effectively
cross-functionally based on the close exchange of information between people across
departments, a close-knit organization that does not generate blind spots, by focusing on a
middle-up-down management style that is indispensable to resolve the contradictions between
ideal and reality in each working area. With this ambition, as CFO, I am still continuing to
make changes and go through trials and errors in order to maximize the corporate value of the
entire group.