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Many people work for a company as members of an organization, and earn a salary to live. Until now, Japanese companies have competed on the world stage by transforming the power of their employees into organizational power. However, many of the Japanese companies that once boasted strength are now steadily weakening, and the relationship between Japanese companies and members of organizations is about to reach a major turning point.

First, let us look back at the period when Japanese companies shone brightest and demonstrated their strength. To be more specific, this period was from the period of high economic growth until the bubble economy began.

This was also a time when people who agreed with the strong management philosophy and values held by the CEO gathered at companies. As a defeated nation, most Japanese people at the time lacked hope or a sense of values about how things should be. In this environment, many people were attracted to founders who presented a vision of how a company should be, and to CEOs who had a strong desire to "revitalize Japan." They gathered at companies seeking to share the same values, and by sharing their philosophy and thoughts, employees came together to boost the company. Konosuke Matsushita's water philosophy is a very famous story.

In Japanese companies at that time, under the banner of the management's philosophy, work was divided into tasks, and each task was further broken down to produce the most efficient results, with each employee working hard to complete them. It was inevitable that a company like this would become strong. As a natural result, Japanese companies grew significantly. Employees were not only compensated for their labor with a salary, but also with pride and affection for the company they belonged to, and values they could empathize with. Belonging to a company was a personal identity, and this led to the creation of so-called "company men" who prioritized their company and work above all else. I don't think the term "company man" here has a negative meaning.

When discussing the relationship between organizations and individuals, there are two terms that are often used: "exchange relationship" and "integration relationship." The easiest to understand "exchange relationship" is when an individual provides labor and the company pays compensation in return. This is based on the premise that the company and the individual each consider their values to be different. However, in Japan during this period, it was a so-called "integration relationship" in which the values of the company and the individual were aligned in the same direction, so although compensation was paid appropriately, it was important that they shared the same values, and this was a time when both parties were happy.

As Japanese society became increasingly affluent and entered the bubble economy, individuals began to work with diverse values. "The president says this, but what I value is different," "I go to work to get a paycheck, and there's something else I really want to do," and so on. It was around this time that the lifetime employment system, in which people worked for the company they joined as a new graduate until retirement, began to crumble.

The "integrated relationship" that had existed until now between companies and individuals was no longer viable, and individuals began to form more "exchange relationships" in which they prioritized the benefits of belonging to a company, rather than belonging to a company out of affection for the company.

Then, as the bubble burst and many companies lost their strength, they were unable to make profits, and not only were annual base-ups impossible, but they even fell into base-downs. It also became impossible to manage employees' careers by promoting them according to their years of experience. Companies offered less compensation to their employees. As a result, more and more people started changing jobs to other companies in search of compensation that matched their ideals.
Meanwhile, companies began to introduce Western-style merit-based pay systems in order to cut labor costs. They tried to retain talented employees by paying them high salaries, and ruthlessly cut off employees who did not produce commensurate results.

However, the introduction of the performance-based system has further weakened Japanese companies because the performance-based system that was introduced was half-hearted.

In the meritocracy adopted by Japanese companies, for example, even if a young employee achieves great results, there are almost no examples of them going beyond the barrier of seniority to become an executive or receiving huge compensation. Even if they are successful, all they get is the top position among their peers. The "Japanese version of meritocracy" is, in other words, "same-term meritocracy," and it has destroyed the originally strong horizontal connections between peers.

Japan's hiring system is a rare "spring new graduate hiring system" even by global standards. Hiring only new graduates once a year has led to a strong awareness of "classmates." It's a bit of an old-fashioned expression, but it has created a unique sense of unity among classmates, "eating from the same pot." This unique Japanese hiring system has worked very well for Japanese companies so far. Classmates have a relationship of being good rivals and competing with each other, but they also encourage and comfort each other like friends. Within the company, they cooperate with each other in their work, but they also compete with the desire to achieve results without falling behind others. To put it in perspective, it is like the relationship between classmates centered around the protagonist of the highly rated TV drama "Naoki Hanzawa."

However, with the introduction of a merit-based system, competition among peers became more prominent and support for each other was almost nonexistent. As a result, the sense of unity among employees and the friendly rivalry within the company that is beneficial for work were lost.

The "integrated relationship" between companies and individuals that has been the source of strength for Japanese companies has collapsed, and employees are losing their sense of unity and their values are becoming fragmented. In this situation, what kind of relationship between companies and organizational members is appropriate for Japanese companies to regain their strength in the future? Now, a new organizational style that suits the Japanese corporate culture is required.

When companies try to do things rationally and efficiently, it has been common to have top-down orders in the past. However, this is premised on the fact that the company and individuals share the same values. In today's world, where this is no longer the case, I don't think a simple top-down approach can achieve the same high performance as in the past.

So what should we do? I believe that going forward, the key to the relationship between companies and their employees will be "how creative they can work and make people work."

First of all, companies need to accept the different values of each employee. Accepting diversity, including work styles, is the starting point.
And individuals need to be able to express more original ways of thinking. Even if you think you have an idea that is "your own," it is often the case that you are simply repeating something that someone else has done. When working on your job, you need to develop the ability to think and be creative in a way that is "different from others."
It will be difficult to develop your own unique way of thinking and creativity right from the start, so there are two steps to finding your own style.

First

1. (1) Work according to the company's instructions.

I call this "traditional orientation." "Traditional orientation" refers to the systematic way of working that emphasizes work efficiency that has been cultivated by many Japanese companies. And just when you think you have mastered this, at some point...

1. (2) Try taking a step in a direction other than that instructed by the company.

This is the stage where original thinking and creativity come into play. There are two ways to "take the first step."

One way to take that step is to be "original." The other is to be "co-creative (making friends)." "Original" is a career path that is often pursued by people who can do original things on their own. They can come up with ideas on their own, find sponsors who agree with them, and can do anything on their own, so they are well suited to starting a venture company.

The other "co-creation orientation (making friends)" is a career path that is suitable for people who go beyond the boundaries of departments and sections in a company's organizational chart, gather with like-minded people, and create "new things that can only be done by these friends." They share ideas, stimulate each other, and push forward to create new value.

In the coming age, companies should cherish and nurture people with this "co-creation orientation." They can be called "informal organizations" that do not fit into the official organizational chart. Until now, informal organizations have often been viewed as unproductive, such as groups that complain about the company at a bar, and companies have often taken a "bad faith" view of informal organizations and have not viewed their existence positively. However, in the future, some of these informal organizations will be the ones that liven up companies.

This is because, although "creative-oriented" people have plenty of ideas, they are people who can pave their own way, so in many cases they end up going independent at some point and not contributing to the company's profits. However, "co-creative-oriented" people in an organization can do interesting and new things because they have colleagues, so it is assumed that they will stay in the company for a certain period of time. It is rare for all colleagues to quit at the same time. I think that if the upper management of a company understands these people and gives them the time, budget, privileges, etc. to lead to good performance, it will lead to a breakthrough for the company. In that sense, companies that have excessive internal controls should be careful.

I have a feeling that organizations in which companies and organizational members support each other and are supported by each other, and that they can grow together, will become important in Japanese society in the future. I believe that one way for companies to survive in the coming era is for them to nurture with an open heart these "buds" of creative organizational members and informal organizations, without squashing them.

(Published in 2015)